Portfolio Management Capability Research Articles

Correction to: Making Sense of Projects—Developing Project Portfolio Management Capabilities

Correction to: Making Sense of Projects—Developing Project Portfolio Management Capabilities

Deep learning applications in investment portfolio management: a systematic literature review

PurposeMachine learning (ML), and deep learning in particular, is gaining traction across a myriad of real-life applications. Portfolio management is no exception. This paper provides a systematic literature review of deep learning applications for portfolio management. The findings are likely to be valuable for industry practitioners and researchers alike, experimenting with novel portfolio management approaches and furthering investment management practice.Design/methodology/approachThis review follows the guidance and methodology of Linnenluecke et al. (2020), Massaro et al. (2016) and Fisch and Block (2018) to first identify relevant literature based on an appropriately developed search phrase, filter the resultant set of publications and present descriptive and analytical findings of the research itself and its metadata.FindingsThe authors find a strong dominance of reinforcement learning algorithms applied to the field, given their through-time portfolio management capabilities. Other well-known deep learning models, such as convolutional neural network (CNN) and recurrent neural network (RNN) and its derivatives, have shown to be well-suited for time-series forecasting. Most recently, the number of papers published in the field has been increasing, potentially driven by computational advances, hardware accessibility and data availability. The review shows several promising applications and identifies future research opportunities, including better balance on the risk-reward spectrum, novel ways to reduce data dimensionality and pre-process the inputs, stronger focus on direct weights generation, novel deep learning architectures and consistent data choices.Originality/valueSeveral systematic reviews have been conducted with a broader focus of ML applications in finance. However, to the best of the authors’ knowledge, this is the first review to focus on deep learning architectures and their applications in the investment portfolio management problem. The review also presents a novel universal taxonomy of models used.

The Role of Project Management Office in Managing Project Portfolio Managem ent: A D escriptive S tudy i n Indonesian B anks

Purpose: This paper presents a preliminary study of the complete research to explore how strategic initiatives are implemented in Indonesian banks. It has the aim to descriptively compare the Project Portfolio Management (PPM) Capabilities and bank performance between banks that are applying Project Management Office (PMO) practices and not.
 Design/methodology/approach: Empirical research has been performed through a survey using questionnaires to define the contribution of formal project management office practices in managing strategic initiatives in Indonesian banks. The data from 82 banks from a total of 115 banks in Indonesia based on the list of Indonesian Financial Authority were collected and analyzed using descriptive analysis with help of statistical tools SPSS 22.
 Findings: As a preliminary stage, this paper found that banks with formal project management office practices tend to be more effective in managing their strategic initiatives.
 Research limitations/implications: However, further analysis still needs to be performed to explore how project PPM capabilities and PMO practices influence the bank's performance positively.
 Originality/value: This study introduces how the project management office and project portfolio management practices in Indonesian Banks at glance and how its comparison those with and without project management practices.

APPROACH SELECTION METHOD FOR PROJECT PORTFOLIO MANAGEMENT AND ITS APPLICATION

Project portfolio management has evolved in recent decades from an empirical field to a field with advanced management technologies, including the active use of information technology. A number of standards and guidelines for project portfolio management have been created. Many dozens of specialized software tools have been developed. The effectiveness of an organization's project portfolio management significantly depends on the chosen management approach, as well as the level of use of project portfolio management capabilities. The level of utilization of project portfolio management capabilities is the level of maturity of an organization in this area. The aim of the article is to apply the method of project portfolio management approach selection. The article proposes to carry out the selection of a project portfolio management approach by solving a two-criteria problem. The first criterion is the risks inherent in this approach in the management of the organization's project portfolio under specific conditions. The less these risks, the more qualitative approach is applied. The second criterion - the costs of applying the evaluated approach. The application of the proposed method to improve project portfolio management in one of the technical universities in Ukraine was considered. Risks from non-performance or imperfect performance of portfolio management processes at the university were assessed. We also assessed the existing costs of managing the portfolio of projects. To improve the quality of management at the university, it is advisable to improve the execution of portfolio management processes and implement those processes that are not yet performed. This can be done by implementing a computerized portfolio and project management system for the university. Jira Portfolio Commercial can be used as such a system. With the use of computerization, new processes for project portfolio management will appear. For a number of existing processes in the organization, employee payroll costs will be reduced. For many processes, risks from non-performance or imperfect execution will be reduced. Computerization of project portfolio management will enable to reduce management costs by 1.8% and risks by 49.4%, i.e. almost by half.

Research on the Origin and Composition of Alliance Portfolio Management Ability

With the increase in innovation risk and the acceleration of technological iterations, a single bilateral alliance cannot meet the needs of corporate innovation activities. More and more companies have established multiple alliance relationships with cross-regional and cross-industry external organizations at the same time. However, most companies are still unable to systematically manage alliance portfolios from a holistic perspective, and usually only focus on conflicts and competitive behaviors between alliances. If an enterprise wants to build a high-performance alliance portfolio, it must have the ability to develop and manage several external alliance relationships, that is, the ability to manage alliance portfolios. Based on the combing and analysis of related research results, the origin and connotation of alliance portfolio management capabilities are systematically analyzed, providing a new perspective for innovation management research in alliance portfolios.

How Do Alliance Portfolio Factors Affect a Precision Medicine Firm’s Innovation Performance?

Precision medicine is an approach to disease treatment and prevention that seeks to maximize effectiveness by taking into account individual variability in genes, environment, and lifestyle. The medical paradigm has been changed with the emergence of precision medicine and many companies with business related to precision medicine should cooperate with other companies. The purpose of this study is to analyze the alliance portfolio factors that affect firms’ innovation performance. This study examined whether the diversity factors of the alliance portfolio and alliance management capability influenced its innovation performance. Additionally, we investigated the moderate effects of participation of research organizations in the alliance portfolio. As a result, there was an inverted U-shaped relationship between the industry diversity of the portfolio and innovation performance; therefore, the participation of research organizations in the alliance portfolio showed a positive effect. Additionally, the value governance diversity changed to have a positive effect by interacting with research organizations. This study provides information on the alliance portfolio factors that affect the innovation performance of precision medicine companies.

Alliance portfolio management capabilities, corporate entrepreneurship, and relative firm performance in SMEs

ABSTRACT This article shows how small- and medium-sized enterprises (SMEs) can enhance the level of corporate entrepreneurship through alliance management capabilities. The findings from a sample of 272 suppliers to the mining industry demonstrate that the constituting dimensions of alliance portfolio management capability (that is, partnering proactiveness, relational governance, and portfolio coordination) positively affect corporate entrepreneurship. Moreover, corporate entrepreneurship mediates the effects of these dimensions on firm performance. These findings improve our understanding of how organizational capabilities enable SMEs to mitigate their lack-of-resources problem while engaging in interfirm relationships to better utilize corporate entrepreneurship for increasing firm performance.

Alliance Portfolio Management and Sustainability of Entrepreneurial Firms

The aim of the present work is to testify whether the alliance portfolio management capability has an impact on entrepreneurial firms’ sustainability. A moderating mediation model has been applied to a sample consisting of 101 entrepreneurial firms listed in New OTC Market (Over the Counter Market) in China. Based on the research design, second-hand data and first-hand data were used. The findings reveal that the two dimensions of the alliance portfolio management capability, i.e., partnering proactiveness and relational governance, can trigger a higher value of the alliance portfolio and result in the sustainable growth of entrepreneurial firms. What is more, when the board of directors has centralized power, the alliance portfolio management capability will increase the value of the alliance portfolio and improve the sustainability of entrepreneurial firms. Unlike the previous literature, this study discovers the internal mechanism between the alliance portfolio management capability and firms’ sustainability in the context of entrepreneurship. The theoretical condition of this relationship is provided from the perspective of the board of directors.

Understanding the Effect of Network Management Capability on Innovation: A Multi-path Model

Past research revealed that inter-organizational networks play an essential role for innovation. In particular, network management capabilities have been found to essentially contribute to the innovation success of corporate actors. However, the concrete causal mechanisms that transmit the effect of network management capabilities to innovation performance are still under-explored. To address this gap, we develop a theoretical mediation model by integrating the dynamic capabilities view, network resource theory and perspectives of network agency. We first argue that network attributes allow firms to access knowledge resource benefits and thus contribute to innovation performance. Second, we hypothesize that firms are able to overcome constraints associated with the development of specific network attributes by the deployment of two different types of organizational routines – those that focus on discrete relationships and those that address firms’ overall network portfolio. The model was tested on data from the largest network of German municipal energy providers comprising 84 member firms. The results largely support our hypotheses in indicating that portfolio management capability’s influence on innovation is mediated by knowledge reach and richness in the network, relationship management capability’s effect by knowledge richness, while knowledge receptivity has no significant effect on product innovation performance.

Social capital, portfolio management capability and exploratory innovation: evidence from China

PurposeSocial capital is critical for firms to conduct business activities; however, whether it is always beneficial for exploratory innovation and the specific and contingent effects of each dimension remain unknown. This paper aims to examine the role of three dimensions of social capital in determining exploratory innovation and investigate how firms’ portfolio management capabilities shape these links.Design/methodology/approachSurvey data from 276 firms in high-tech industries in China are used to test the hypotheses.FindingsThe authors find that cognitive social capital negatively affects exploratory innovation, whereas relational and structural social capital both demonstrate inverted U-shaped relationships with exploratory innovation. In addition, portfolio management capability positively moderates the relationships between the three dimensions of social capital and exploratory innovation.Practical implicationsGiven the advantages and disadvantages, managers should be prudent in the establishment of social capital; moreover, firms should develop and improve their portfolio management capabilities to effectively manage their relationships in the pursuit of exploratory innovation.Originality/valueThis research contributes to the social capital theory and innovation literature in two ways. First, it provides a multi-dimensional examination of the effects of social capital on exploratory innovation and the empirical evidence of the negative side of social capital. Second, it extends the extant literature by introducing a more holistic perspective and proposing that portfolio management capability helps firms to overcome the negative effects and strengthen the positive effects of social capital on exploratory innovation.

MANAGEMENT OF ALLIANCE PORTFOLIOS AND THE ROLE OF THE BOARD OF DIRECTORS

The objective of the present work consists in testing whether the strategic involvement of boards of directors has a positive influence on the development of alliance portfolio management capability and on the value that the alliance portfolio generates. A variance-based structural equation modelling (Partial Least Squares) has been applied to a sample constituted by 139 top Spanish companies. Our analysis shows that the strategic involvement of the board of directors has a positive and influence on the management of alliance portfolios, thereby influencing the value of that portfolio in an indirect way. Unlike previous literature, this study links the functions of the board of directors to organizational capabilities, connecting the literature on corporate governance and on management of alliance portfolios.

Changes in Public Sector Management: Establishment of Project Management Offices – A Comparative Case Study of Lithuania and Denmark

This paper analyses an attempt to initiate an organizational-administrative reform on the basis of experimental (pilot) project initiated by the Ministry of Economy in Lithuania which established a specialized unit – Project Management Office (PMO) – responsible for portfolio1 of programs and projects’ coordination at ministerial level. The paper shortly describes types of reforms and how they can be implemented, as well as the notion of portfolio, program and project management and organizational capability to manage them, as one of the attributes of organizational maturity in project management is an existence of PMO. This article focuses on the main features of PMO and describes two qualitative case studies. Lithuanian and Danish cases are provided and differences of PMOs are analysed. The cases provide insights that the transition to portfolio, program and project management might last for decades. Although the reform did not gain the acceleration in Lithuania, the trend toward project management embedment in the public sector in Europe is evidenced and more cases of the establishment of PMO are observed.

Alliance Portfolio Management: Dimensions and Performance

Our paper contributes to the understanding of the alliance portfolio management capability by examining the relationships among their different dimensions and their impact on the alliance portfolio performance. The current study proposes and tests a multiple mediating model and tests the mediation. A variance‐based structural equation modelling (partial least squares) has been applied to a sample made up of 144 top Spanish companies. Our analysis on the one hand fosters the importance of the partnering proactiveness and their influences on the alliance portfolio performance, and, on the other, formulates mediation hypotheses, which posit how the relational governance and portfolio coordination dimensions play a critical mediating role in the partnering proactiveness – the alliance portfolio performance link. Results from the data analysis show that the dimensions of alliance portfolio management capability are related in such a way that the relational governance and the portfolio coordination: (1) partially mediate the effect of partnering proactiveness on the alliance portfolio value; and (2) exert significant influences on the alliance portfolio performance.

Global food safety product management: a holistic, integrated, strategic approach (proposed)

The safety of millions of the world’s population is at significant risk. Unsafe food products and foodborne diseases cause the preventable deaths of over two million people annually globally. This situation represents a global sense of urgency in which nations and food product safety-oriented organizations seek to develop and implement actionable strategies to address unsafe food products and foodborne diseases. Food product safety management is critical to enabling safe food products throughout the food product lifecycle. The food product lifecycle represents the activities involved with food products from origin to consumption and/or ultimate disposition. Effective management of food product lifecycle activities is critical to enable safe food product consumption globally. However, virtually every nation, from the least to the most advanced, and every food product safety-oriented organization, lacks a holistic, integrated, strategic approach to enable effective food product safety management. The authors propose that nations and food product safety-oriented organizations adopt the Food Product Safety Management Integrated Framework (Proposed). This proposed framework prescribes a holistic, integrated, strategic approach to enabling global food product safety management that includes effective food product safety management governance, a food product safety management strategy, a food product safety management enterprise architecture, a food product safety management portfolio management capability, and a food product safety management capital planning and investment management capability. Adopting the proposed framework would enable nations to achieve effective food product safety management by leveraging a holistic, integrated, and strategic approach.

Contemporary project portfolio management: Reflections on the development of an Australian Competency Standard for Project Portfolio Management

Project portfolio management is an emerging aspect of business management that focuses on how projects are selected, prioritised, integrated, managed and controlled in the multi-project context that exists in modern organisations. Competency standards have been developed by professional bodies for project managers. However, to date there has been no attempt to develop a competency standard at the portfolio management level. This paper examines the process for development of the first performance-based competency standard for project portfolio management and identifies how this contributes to the body of knowledge in both project portfolio management and project management more broadly. The intent is to use the Standard to improve project portfolio management capability and practice in organisations, which in turn promotes efficient resource use and more profitable project outcomes. Specific issues regarding Australian practice are described, along with implications for how this may impact Australian practice in the future.

Robust project portfolio management: capability evolution and maturity

PurposeThe purpose of this paper is to increase understanding of project portfolio management (PPM) capability evolution, in order to guide the implementation and ongoing development of robust capabilities.Design/methodology/approachThis research adopts a dynamic capabilities perspective and draws on organizational learning theory to investigate the path‐dependent nature of PPM implementation and development. It employs a multiple‐case study of six organizations.FindingsEach of the case organizations reported a high level of evolution and change within their PPM capabilities, both purposeful and unintended. Potential “fragilities” are identified, such as the emergence of a “success trap” that inhibits explorative innovation and difficulties in stopping poor projects to reallocate resources. Based on findings from the literature and the multiple‐case study, a capability maturity model is proposed to assist in the development of robust PPM capabilities that will continue to evolve and stay relevant in dynamic environments.Research limitations/implicationsThe research is based on six organizations and may not be representative of all environments. The proposed maturity model has only been used in initial trials to evaluate capability maturity, and its use in guiding capability development has not been studied. Further research is required to test and evolve the maturity model.Practical implicationsThe maturity model will be of interest to managers as a tool to analyze PPM maturity and identify areas for further development or to guide new PPM implementations.Originality/valueThe proposed maturity model extends existing maturity models by incorporating organizational learning capabilities, by recognizing antecedents for maturity stages that build upon other capabilities, and by including steps to recognize and avoid potential “fragilities” and to ensure robust PPM performance over time.

Alliance Portfolio Management Capability and Portfolio Performance

Firms in dynamic industries such as biotechnology, computers and telecommunications are increasingly engaged in a dense network of strategic alliances and inter-firm relationships. Consequently, th...

Q&A with Anon Sirisaengtaksin, President and Chief Executive Officer, PTTEP

Q&A What is the current energy balance in Thailand for crude oil and for gas? What is the projected future energy balance? Thailand is an energy importer. We can produce about 44% of our total consumption of crude oil and natural gas. Most of our crude oil imports come from the Middle East. Only 120,000 b/d of crude oil was produced indigenously. We also exported 210,000 b/d of refined products because of a surplus in refining capacity. Natural gas was mostly used for electricity generation. About 79% of natural gas was produced domestically while the rest was imported from Myanmar. Energy demand will continue to grow to support our economic growth. In 2011, crude oil and natural gas demand is expected to increase by 3% and 10%, respectively. To meet the increasing energy demand, we are extensively exploring and developing more energy resources, both domestically and internationally. Moreover, Thailand will start importing LNG beginning this year. Renewable energy will also play a more important role to serve our national policy of energy diversification. What is PTTEP’s core exploration and production strategy? PTTEP’s long-term vision is to become a leading Asian exploration and production company with an aspiration to reach production output of 900,000 BOED by 2020. PTTEP will focus on: Sustainable growth through growing aggressively in focused countries, developing floating LNG production, and strategic mergers and acquisitions Asset value maximization by prolonging our production plateau and instituting portfolio management and funding Organization capability enablers with a focus on streamlining business processes, optimizing resource allocations, developing staff’s overall capabilities, and preparing management and key staff for the company’s business expansion What is PTTEP’s crude oil and gas production break-down in Thailand and outside of Thailand? PTTEP has invested in 44 E&P projects in 13 countries, with 19 projects being domestic and 25 projects being overseas. Most of our current production projects are located in Thailand; therefore, in 2010, our petroleum production averaged 300,000 BOED, with a ratio of 80% domestic and 20% international.

Country and firm level factors in international retail expansion

PurposeThe purpose of this study is to investigate firm‐ and country‐level drivers of retail performance.Design/methodology/approachA database of the top 200 global retailers was primarily constructed from the 2005 Global Powers of Retailing data. Regression was used to test the hypotheses.FindingsThe predictors are able to explain firm level variations in sales growth, but not ROI. While retailers' sales growth is positively related to expansion speed, it is negatively related to number of retail formats and number of countries of operation. Moreover, retailers who choose to expand into a host country that is less developed, with relatively high disposable income, tend to be more successful than others.Research limitations/implicationsThis study is focused on the foreign expansion process and characteristics of the top performing retailers and their first foreign expansion destination.Practical implicationsFindings reflect differences in internationalization strategies of top retailers. Findings also provide guidance for companies who already have foreign subsidiaries, and for those who are interested in opening new markets.Originality/valueThis paper examines the impact of the economic characteristics of the first host country entered and firm level resources and capabilities on two measures of firm performance. Empirical tests of the impact of retail portfolio management capabilities and international market portfolio management capabilities on retail sales growth are offered.

Process Capabilities and Value Generation in Alliance Portfolios

This paper develops a multidimensional, process-based conceptualization of alliance portfolio management capability. Arguing that such a capability consists of organizational processes to proactively pursue alliance formation opportunities, engage in relational governance, and coordinate knowledge and strategies across the portfolio, we examine the impact of such a capability on organizational outcomes in the context of formal structure (alliance function) and strategy (portfolio diversity). Using data from 235 firms, we find that these three processes have a positive effect on a firm's alliance portfolio capital, and some of these effects are conditioned by a formal alliance function and diversity of the portfolio. Whereas the ability of proactive formation and relational governance processes to create value is further strengthened in the presence of an alliance function, that of the coordination dimension is weakened. Furthermore, the benefits of relational governance are strengthened for firms with diverse portfolios, whereas the benefits of coordination processes are weakened. We discuss implications of these findings for the alliance and network literature, and in general, for firm heterogeneity. In summary, we find evidence that variance in process-based capabilities to manage alliance portfolios can explain performance heterogeneity among firms.