Dealing with legitimacy: A key challenge for Project Portfolio Management decision makers

Previous research has considered combining different decision-making approaches to be critical to achieve flexibility in Project Portfolio Management (PPM). Lacking flexibility, i.e., making decisions only by rational and formal approaches, might lead to a deficient balance between different types of ideas and projects, and this may lead to innovation opportunities being missed. However, the challenges that decision makers might face in achieving that flexibility have not been investigated thoroughly. In an interview study of three industrial companies, we explored how different decision-making approaches are combined in PPM. We found that rational and formal decision-making processes are experienced as more legitimate than informal and non-rational ones. Decision makers deal with legitimacy by certain mechanisms that allow them to bypass high accepted approaches and legitimizing decisions made by low accepted ones. We discuss how these mechanisms, while contributing to achieving flexibility, might also cause a bias in decisions and destabilization in resource allocation.

► How Project Portfolio Management decision makers face different decision situations. ► Explorative study with qualitative interviews in three industrial companies. ► Some decision-making approaches are experienced as more legitimate than others. ► Decision makers must deal with legitimacy for approaching decisions appropriately. ► Flexibility in decision making might cause bias and destabilize resource allocation.