Dynamic capability through project portfolio management in service and manufacturing industries

Purpose – The purpose of this paper is to summarise a recent doctoral thesis on the relationship between project portfolio management (PPM) and competitive advantage in service and manufacturing organisations. Design/methodology/approach – This two‐phase mixed method study comprises a quantitative questionnaire‐based survey and a qualitative multiple‐case study to address the “what” and the “how” of the research questions. Findings – This paper adopts a “dynamic capabilities” perspective, drawing on organisational learning theory to explain the path‐dependent nature of PPM capability development and how PPM capabilities work with the resource base to enhance competitive advantage. Findings support prior PPM studies and suggest a positive relationship between structured PPM capabilities and improved outcomes. The research compares service and manufacturing environments; future challenges are likely to result from the increasing blurring of the boundaries between service and manufacturing industries. Practical implications – The research has four main practical outcomes: development of a model representing the overall PPM capability; a benchmark for and guidance on specific PPM processes and methods; guidance on the types of organisational learning investments that enhance the establishment and evolution of PPM capabilities; and the initial development of an outcomes and learning‐based maturity model for PPM capabilities. Originality/value – This paper produces the first benchmark of innovation PPM capabilities in Australia, and is the first to include service product‐focused portfolios. It is the first study that identifies PPM capabilities as dynamic capability, allowing existing research to be viewed through the dynamic capability lens and, more importantly, providing a theoretical underpinning that may influence future research and practice.