The degree of formalisation concerns ‘the extent to which an organisation uses rules and procedures to prescribe behavior’ (Fredrickson, 1986, p. 283). In this respect, the organisation has a relatively high level of formalisation in the maintenance of an organisation-wide ‘Global Standards Manual’ (GSM) which consists of the common standards and core principles used to conduct the business, irrespective of location or nature. The Standards are mandatory and overlay all the policies throughout the organisation and this is a fundamental component of the organisation’s risk management structure. All executives need to attest they have read and understand its content, and are operating in accordance with its standards and principles on an annual basis. Any dispensation from the GSM requires approval from the Chairman or Chief Executive.
Organisational rules have been viewed as stable instruments promoting rationality and predictability (Weber, 1978) or as being dynamic, i.e. creating rules to retain value, modifying rules that encounter issues and eliminating rules that become obsolete (March et al., 2000). Rules consist of explicit or implicit norms, including the regulations and depict the behavioural expectations which guide an individual’s behaviour and interaction (Desai, 2010; Mintzberg, 1979). These behavioural expectations may relate to ‘social norms, tacit understanding, standard practice, and rules of thumb’ (Olin & Wickenberg, 2001).
The organisation’s policies set out the rules to protect against risk and facilitate the achievement of business objectives. Further to the organisational policies there are also country-specific policies and business procedure manuals. In order to indicate the magnitude of formalisation, there are over several thousand policy, procedures and
guidance notes with regards to regulatory compliance, financial crime compliance and reputational risk alone. An illustration of the case study organisational policy and procedural hierarchy is shown below.
Figure 5.2: Policy and procedure hierarchy
Source: Adapted from material provided by the organisation
The organisation which served as our case study also provides a formalised channel, known as whistle-blowing (Financial Conduct Authority, 2015), by which any deviation of the rules may be reported to senior management. This arrangement is said to promote positive change within the organisation and improve society at large since it concerns ‘the disclosure by organization members (former or current) of illegal, immoral, or illegitimate practices under the control of their employers, to persons or organizations that may be able to effect action’ (Near & Miceli, 1985, p. 4).
From a research perspective we consider the formalisation of PM with respect to the associated policies, procedures, systems and tools being available and utilised (Project Management Institute, 2013a). There is ongoing debate as to whether adherence to
project standards does lead to better project performance (Joslin & Müller, 2015), where Thomas and Mullaly (2007) posit that many of the PM maturity models lack attention to the intangible and innovative capabilities necessary to manage projects in high uncertainty, high ambiguity knowledge-based environments.
The observation from respondent #2 supports Papke-Shields et al. (2010) whose research identified that despite PM frameworks being used in practice they are being applied inconsistently:
‘even though the bank has tried to put in a lot of standardised tools, for project management…It depends really on where you are working…some departments I know follow it very clearly. Follow it step by step…but some don’t…it depends on what kind of project. What I see is, in most of the time IT projects follow quite strict into using all these RBPM templates. But to be honest, even though I attended some of these RBPM classes, I still don’t really have a clue how these RBPM documents would be able to help me run my project better…I don’t really see how good it is, or how it can really help me run my projects!’
Respondent #8 also highlighted an issue with regards to the mandated PM tool:
‘Clarity, it can be very powerful, but the overhead involved in the maintenance of it, it’s also quite huge…Clarity is really boring, so I kind of ask people and attend some webinars, it’s also got a lot of things there. I don’t need to know all of them, so it’s like, I need to know how to do this, so I go out and find out how to do this.’
Reviewing seventy PM tools with over 750 project practitioners, Besner and Hobbs (2006) determined that tools associated with organisational learning presented the highest potential for improving project performance. The relevancy of tools and techniques as emphasised in the PM standards has, however, been questioned by Thomas and Mengel (2008) as they posit that behavioural and personal competences are more relevant for organisational performance. The contribution of PM tools is context specific and a project manager’s practical application to execute processes and practices is seen as a valuable tacit knowledge asset (Besner & Hobbs, 2006).
‘To be very frank, I was surprised when I joined this project. We hardly have any tools, industry tools. When, because when you come from consulting, they live on the latest, most advanced tools, but here it was quite surprising that they didn’t have any.’
Despite being disappointed with the lack of PM tools, this did not discourage the respondent. Together with the team they took a process improvement perspective and developed templates which provided a learning opportunity and the possibility to extend these templates to other projects:
‘It was little surprising, but in a short time we adjusted. And maybe in the new Malaysian project we’ll apply those tools. So that is a good learning for us, yeah.’
The lack of tools was not regarded as a deterrent or a major cause for frustration. Another respondent (#10) gave an example where:
‘What I realise at the bank, is that sometimes usage of tools is limited, due to legal or compliance bindings. In terms of project management, I have used MS Project, but mostly I found where we had a very scaleable self-structured methodologies, I’ve managed to create my own project management tools, using Excel.’
Respondent #10 also describes how:
‘We have created our own Wiki, we have converted all our Word documents into Wikis…We’ve created this concept of no more Word, no more Excel. The reason being, Word documents when you start emailing around, it gets mixed up, it gets lost. It’s very hard to maintain the version control…so the tools are in place in terms of knowledge retention, and I think we are getting there in terms of using it correctly.’
The above example from respondent #10 illustrates that despite being provided with access to the organisation’s PM tools and methodologies, it was felt that, based on the respondent’s knowledge of the bank and past experience, further improvement could be made using existing resources such as Microsoft Office and SharePoint. He said:
‘I felt that it’s better to have a hybrid model that suits the organisation, or department. So I helped tailor it based on my experience.’
The tools developed by the respondent, included templates, mentoring processes and online Wikis which promoted communications, learning and standardisation across projects.
Having consistent work practices in project environments is inhibited by the transition of team members on and off the team. Although such consistency has been said to be able to compensate for factors which may be detrimental to team performance, Chudoba et al. (2005) emphasise that excessive standardisation could obstruct creativity, innovation and agility which are essential factors for organisational competitiveness.