Formalization of Project Portfolio Management: The Moderating Role of Portfolio Complexity
Juliane Teller / Barbara N. Unger / Alexander Kock / Hans Georg Gemuenden
Companies frequently opt to implement formalization in order to improve success. Earlier research found supporting evidence for performance enhancing effects of formalization in project management, as well as in portfolio management. However, so far there is no research on how formalization on the project level interacts with formalization on the portfolio level and how this may impact portfolio success. This study investigates the interaction of formalization on both levels and investigates how formalization impacts the quality of the project portfolio process. Additionally, we examine the moderating effect of portfolio complexity on formalization. Using a sample of 134 firms this study shows that single project management formalization and likewise portfolio management formalization directly contribute to portfolio success. Simultaneous formalization on these two levels delivers a complementary effect resulting in increased effectiveness. A contingency perspective reveals that for more complex portfolios formalization is even more important.