Innovation in project-based firms: The context dependency of success factors

Innovation management literature typically concerns functionally organized firms. In this paper we investigate innovation management in a different type of firm, the project-based firm. Project-based firms, such as engineering and construction companies, consultancies and system integrators, are service firms that solely execute projects for clients. We focus on new service development projects in these firms. Based on an in-depth study of six projects in four different firms, we develop hypotheses on differences between success factors for development projects in project-based firms and in functionally organized firms. Some of the success factors for functionally organized firms, as described in the literature, appear to be more important in project-based firms, others seem redundant. Our findings suggest that the specific structure and capabilities of project-based firms provide an explanation for these differences.