Learning investments and organizational capabilities

Abstract

Purpose The purpose of this paper is to improve understanding and provide guidance for investments in organizational learning mechanisms for the establishment and evolution of organizational capabilities such as project portfolio management (PPM) and project management capabilities. Design/methodology/approach A multiple‐case study research project investigates the development of PPM capabilities in six successful organizations across diverse industries. Findings The research indicates that PPM and organizational learning are dynamic capabilities that enhance an organization's ability to achieve and maintain competitive advantage in dynamic environments. PPM capabilities are shown to co‐evolve through a combination of tacit experience accumulation, explicit knowledge articulation and explicit knowledge codification learning mechanisms. Although all three learning mechanisms are important throughout the establishment and evolution of PPM capability development, the research indicates that the development of an effective PPM capability will require particularly strong investments in enhancing tacit experience accumulation mechanisms and explicit knowledge codification mechanisms during the initial establishment or during periods of radical change to the PPM process. Research limitations/implications The research includes a sample of six case studies and the results may not be generalisable. In addition, the research was conducted over a short period of time whereas a longitudinal study would be required to gain more detailed information about the development of capabilities over time. Practical implications The findings suggest that managers can enhance and sustain competitive advantage by investing in tacit experience accumulation as well as explicit knowledge articulation and codification learning mechanisms to develop their PPM capability. Strengthened investment in experience accumulation and knowledge codification learning mechanisms is recommended during establishment of the PPM capability. Originality/value This paper contributes to the understanding of the links between organizational learning and the development of dynamic capabilities. Original hypotheses are proposed and some initial support for these hypotheses is provided through multiple‐case study research.