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1. Introduction
Project management is no longer considered as an approach to the planning and follow-up of a project, but rather as a tool to achieving the 
company strategic goals in a new business environment. 
This includes the application of modern PM disciplines 
that focus primarily on the strategic aspect of project 
management. The company in which project management 
has a strategic importance is project-oriented. Such 
a company demands organizational changes and the 
implementation of a Project management office (PMO), 
as well as adaptation of the classical managerial processes 
to a project-oriented company.
According to Loo (1996), project management 
represents a new management approach because the 
projects are:
■ Results oriented;
■ In demand for effective leadership;
■ Meeting-point of various stakeholders in a company;
■ Synergy factor which unites multidisciplinary teams 
towards a defined goal, with specific time and resource 
limits;
■ Basis for individual development inside a team;
■ Incentive factor for team-belonging.
On the other hand, in their extensive research directed 
towards PM processes, technologies and skills, which 
covered over 3500 articles, magazines and other research 
works, Kloppenborg and Opfer (2002) established the 
following trends relevant for the evolution of project 
management:
■ Standardization of processes and tools;
■ Wider use of Web based technologies for corporate 
communication and cooperation;
■ Use of widely accepted PM practices and 
methodologies;
■ Expressed “outsourcing” in the realization of some of 
the largest companies’ projects;
■ Increased contribution of nonprofit sector projects;
■ Evolution of the project manager’s role in leadership;
■ Adaptation of project endeavors to business demands 
and measurable benefits;
■ Increased importance of project selection and 
prioritization;
■ Focus on formal PM trainings and accreditations;
■ Increased attention towards risk management, 
communication management and stakeholder 
management, especially in the planning phase.
Webster (1999) claims that today’s organizations, under 
the conditions of provisional organizational structures and 
chronic lack of resources, recognize project management 
as a means of achieving adequate system flexibility and 
desired business results. Hebert (2002), contributing to 
this line of thought, sees project management as a flexible, 
effective and strategic management system through the 
aid of which planned results in traditional management 
structures are obtained. Also, he claims that the role of 
project management today is primarily strategic (50 %), 
followed by managerial (40 %), and finally, least of all, 
technical (10%). Cicmil (1997) shares similar thinking and 
points to the idea that project managers should reposition 
the role of project management from the discipline of 
middle and operational management into a business 
philosophy which should support a company’s strategic 
and organizational changes.
Strategic Project Management – Tool for Reaching Business Excellence
Marko Mihić, Dejan Petrović, Vladimir Obradović
University of Belgrade, Faculty of organizational sciences, 154 Jove Ilica St., Belgrade
Serbia
e-mail: mihicm@fon.bg.ac.yu
Abstract
Strategic project management represents cross-cutting approach which is defined on a basis to reach business excellence 
in complex multi-project environment. This paper considers strategic project management as a tool for reaching business 
excellence. It is necessary to define a management system that will unite the expressed needs for change, both in the form 
of different project number and size, and in the form of programs being executed and a strategy inclusive of those needs. By 
applying this approach, supported by adequate organization, policy, leadership, resources and processes, the improvement of 
business results is greatly enabled, especially if the PM tools and techniques are applied, together with IT solutions for project 
collaboration. Thus, the balanced scorecard method should be considered as a starting point for strategy implementation and 
progress evaluation through projects.
Key words: project, strategy, project-oriented company, balanced scorecard
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2. Model of a Project-oriented 
Company
The management of projects and programs in a project-
oriented company is located within the so-called temporary 
organization covering both individuals and teams engaged 
in company projects. The temporary organization implies 
flexibility directed towards a continuous adaptability to the 
number and size of projects and programs, and openness 
through intensive interaction with the environment. The 
temporary organization is, in terms of the number of 
people involved and the number of complex business deals 
conducted under her supervision, dominant in relation 
to the remainder of companies composed of functional 
units and support services. The degree of hierarchy within 
the service for project support is dependant on the size 
of provisional organization – the larger the provisional 
organization, the more important the hierarchy and the 
strategic management of the service for project support.
The model of a project-oriented company, as an open 
and flexible system, is based on combined organizational 
structure and continuous organizational changes, 
corporate project guidance, strategic management, 
project leadership and team-work. The basic elements of 
the model (Fig. 1) are (Ives, 2005):
■ Company demands,
■ Business environment and company capabilities,
■ Leadership and funding for project management,
■ Project domain and success criterion,
■ Project authority,
■ Financing and resources.
The company demands cover internal requests for changes 
in terms of the strategic project direction, program and 
financial benefit assessment of planned undertakings, 
as well as external requests relating to the project users’ 
satisfaction, key suppliers and changes in legal records 
and other legal rules and regulations.
The model elements, covering the company demands 
and abilities, and business environment can be treated as 
the organizational basis for the establishment of project 
management (enterprise project management) within a 
company. 
The company response to changes, which the 
establishment of a project-oriented company carries, has 
four dimensions (Ives, 2005):
■ Leadership and funding for project management,
■ Project domain and success criterion,
■ Project authority,
■ Financing and resources.
Figure 1: Model of a project-oriented company (Ives, 2005)
3. Strategic Basis of Project-oriented 
Company
3.1 Project Vision
One of the departure points in strategic management is 
the definition of the company vision. The vision implies 
orientation and understanding of a company’s future 
position, prospects and field of activity, and is closely 
related to the macroeconomic forecasts and changes 
expected in long-term intervals. The central aspect here 
is the relatively stable and overall attitude towards the 
company future. The project vision is important for the 
definition of the company mission, goals and strategies 
resulting from them.
In a project-oriented company the project vision 
represents the project success factor, and its definition 
is found within the influence of the leader, which can 
result from the field of higher management, but also from 
the provisional organization, if it represents a person of 
authority. It is important that the leader clearly articulates 
the vision and directs efforts towards its realization. The 
project vision and the company vision have many common 
characteristics, but the project vision is more complex as 
it refers to a number of different projects at the same time, 
which, each for itself, represent a mini system with its very 
own organization, culture and value system. The project 
vision has the following characteristics (Christenson et al. 
(2004):
■ It must be clear (should cover the overall goal, desired 
future condition and the essence of project goals),
■ Must motivate stakeholders and propagate a specific 
system of values,
■ Must be credible and adjusted to the stakeholders’ 
culture and sub-culture,
■ Must be demanding and challenging (should be 
proactive and direct teams towards efficient work).
The development of the project vision represents a 
complex process covering multiple phases depending 
on the approach. If transformational leadership is taken 
as the basis for the development of a vision of a project-
oriented company, a model can be defined whose 
schematic depiction is shown in Figure 2. For the project 
vision to be understandable to all interested parties, its 
development should include representative groups of 
project stakeholders, whose mission is to bring closer the 
importance and influence of the vision to the employees.
Figure 2: Development process of a project vision 
(Christenson et al. (2004)
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As can be concluded from the above provided model, 
the project stakeholders have an important role in the 
development and implementation of the vision and in 
the modeling of strategic scope of project management 
within a company. This is why it is necessary to conduct 
an adequate analysis of all relevant stakeholders already 
in the planning phase of business undertakings, which 
also relates to the planning of project portfolio and the 
planning of individual projects. Therefore, the degree 
of project vision quality depends on the interaction 
of relevant stakeholders and the project management 
team. Their common work secures the realization of 
basic requests of good project vision: clarity, motivation, 
credibility and challenge.
3.2 Mission and Strategy
There are points of view according to which the mission 
is part of strategy, whereas other actors, who are in 
multitude, make a clear distinction between mission 
and action which should enable the strategy realization. 
According to them, the mission results from the company 
vision and represents the basis for the definition of the 
strategic goals and strategies corresponding to them. 
Therefore, with the aid of goals and realized strategies the 
company mission is realized. 
For the mission to be in the function of strategic 
action of a project-oriented company it is necessary to 
conduct the so called statement of mission, which covers 
the following components:
■ Most significant projects and programs,
■ Major buyers and suppliers,
■ Targeted markets,
■ Basic economic goals,
■ Project culture,
■ Basic company and project management competence,
■ Common values.
Making the mission concrete is realized though the 
formulation of strategic goals. These further enable a 
detailed elaboration of elements given in a statement 
or mission and secure the basis for the strategy 
implementation. Formulated goals are the criterion for the 
rationality of selected planning decisions and alternative 
action plans (Đuričin, Janošević, 2005).
If considering the strategy of a project-oriented 
company, one must take into consideration the research 
by Hamel and Prahalad (1989), which questions the 
conventional approach to the adaptation of company 
abilities with requests of the surroundings. According 
to this research, less successful businesses try and realize 
their strategic goals through available resources. Within 
them dominates the approach that strategic balance and 
maintenance of competitive advantage is achieved through 
the use of some of the already available generic strategies. 
The result of such an approach is repetition and imitation. 
On the other hand, most successful companies are 
directed towards the use of key competencies in a new and 
innovative way, so that, at first instance, the hard attainable 
goals, would be realized. Resources are used creatively, 
different requests in accordance to the environment are 
established, and the company continuously improves key 
competencies and undertakes organizational changes. It 
is exactly these qualities that represent a strategic basis for 
a project-oriented company. Its key project management 
competencies are in the function of establishing strategic 
goals. 
One of the most important elements for the strategy of 
a project-oriented company is the formation of a project 
portfolio, which represents the first step towards action 
initiation. The goal of connecting strategies to a project 
portfolio is the adjustment of projects and priorities with 
a defined strategy and strategic priorities. This primarily 
corresponds to the adaptability of the portfolio size to 
the company capacities and project representation in 
the portfolio as key events in the process of reaching the 
desired future condition. 
An adequate application of the principle of strategic 
management in the project-oriented company includes 
three phases in the increase of competencies and 
achievement of the so-called project management 
excellence. These are the strategic analysis, the strategic 
choice and the application of strategy. The strategic 
analysis covers the analysis of the goal of conducting 
business, general environment (political, economic, 
socio-cultural and technological factors), the concrete 
environment (entry barriers, intensity of competition, 
negotiation strengths of the suppliers or buyers and the 
ability of substitution of products and services), resources, 
competencies and overall company abilities. The strategic 
choice is composed of the creation of possible strategic 
options, their judgment and choice, so that an adequate 
strategy could be applied. The repertoire of strategic options 
is various and covers different directions: closeness with 
the buyers, product leadership, diversification, change of 
work structure, operational excellence, etc.
To bring a company into a desired strategic position it 
is not enough to have a well formulated strategy, but also 
to secure the corresponding conditions for her conduct. 
In that sense, three factor groups of strategic success 
and excellence accomplishments in project management 
vary – Table 1. Those are qualitative, organizational and 
quantitative factors, and they can be observed from a 
short-term and a long-term perspective.
3.3 Balanced Scorecard (BSC) and 
Project Management
Under the conditions of the present-day business, the 
performance measurement of a company represents one of 
the most important tasks of process planning and overall 
general management. Within the traditional approach to 
management, the performance measurement represents 
a combination of accounting measurements (e.g. Return 
on investment – ROI), marketing measurements (e.g. 
Consumer satisfaction index) and quality measurements 
(e.g. Rate of rejects). A basic setback of these methods 
is their static character that limits the possibility of the 
management of the process of value creation through the 
means of strategy (Đuričin, Janošević, 2005).
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Table 1: Factors of strategic success in a project-oriented 
company (Kerzner, 2001)
In order to obtain a system of performance measurement 
which will respond to the present-day business conditions 
it is necessary to focus on planning and strategy instead 
of control and budget. In relation to this, the research 
conducted by Norrie and Walker (2004) adds a fourth 
element to the traditional project management model 
– strategy (Figure 3). Forming a model with four project 
limits, of which three are already well known within 
the literature – time, budget and quality, they position 
strategy as a key factor to project success. While in 
traditional project management the responsibility for 
planning, follow-up and time management, budget and 
project quality lies within the team members and project 
managers, the responsibility in this elaborated model is 
shared among the project sponsors and project managers. 
Figure 3:  PM model with four constraints 
(Norrie and Walker, 2004)
Due to the flexibility of the management system of a 
project-oriented company, the employees must, by 
themselves, find the best means for the realization of 
planned activities towards the achievement of a project 
vision. The strategy realization becomes as important 
as a good vision. The problems in the application of a 
well formulated strategy appear because the strategy, as 
the unique means of value creation changes constantly, 
does not count for the tools with which the effects of a 
strategy are measured. These problems especially become 
evident in the present-day business because, in view of the 
potentials for the creation of values, there were important 
shifts from material resources towards knowledge 
and information. The strategy based knowledge and 
information is useful for intangible resources such as 
consumer relations, information systems, information 
base, motivation, competence of the employees, common 
values, etc. (Đuričin, Janošević, 2005).
The basic conditions that brought about the creation 
of a new approach to the measurement of company 
performance – list of adapted goals is:
■ Management with the aid of decentralized business 
units,
■ Team work,
■ Knowledge as competition advantage,
■ Employee involvement in continuous process of 
formulation and strategy implementation.
The Balanced Scorecard – BSC - came about at the 
beginning of the ‘90s of the last century as a tool for 
companies’ performance measurement. The popularity 
of the method was influenced by the fact that it was 
implemented by the leading consultancy firms that 
introduced ERP software for business management (SAP, 
BAAN, ORACLE, and NAVISION). Unlike the traditional 
methods for performance measurement which rely on past 
performance indicators, the balanced scorecard is still used 
together with the future performance indicators, which 
are extracted from the strategy. In this way, the balanced 
scorecard becomes a tool for strategy management. Basic 
elements of this method are (Kaplan, Norton, 1996):
■ Consumer perspective,
■ Internal perspective,
■ Development and training perspective,
■ Financial perspective.
Figure 4: BSC`s four perspectives (Kaplan, Norton, 1996)
Thanks to the integration of financial performance 
measurements with marketing, internal and development 
measurements, loopholes within process planning are 
eliminated in traditional management, together with 
the reliance on exclusively historical data, the crude base 
of projected results, and likewise (Đuričin, Janošević, 
2005). The concrete development of goals, performance 
measurements, missions and initiatives for the application 
of consumer perspective in the model of the balanced 
scorecard is provided in Figure 5.
3.3.1 Implementation of the Balanced Scorecard
The implementation of the balanced scorecard in a 
project-oriented company secures a better understanding 
of the project vision and strategy on behalf of the project 
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managers and team members perspective, an adequate 
performance measurement, or rather project results, an 
improvement in the efficiency of the project team as far 
as traditional project limitations are concerned – time, 
budget and quality, and a better communication between 
internal and external project stakeholders. Also, the 
project balanced scorecard (Project’s BSC) decreases the 
gap between the project vision and the concrete action 
taken in order to realize the strategy. This is achieved by 
emphasizing the practical aspects of the adopted strategy 
and minimization of theoretical stance.
Figure 5: Example of consumer perspective in Balanced 
scorecard (Kaplan, Norton, 1992)
Unless the members of the team tie their activities and 
decisions for an adopted project strategy (corporate 
strategy) a double effect is achieved (Norrie et al., 2004).
■ Team members assist the realization and control of 
project strategy,
■ Presence of virtual leadership in all critical decision-
making and events is important for the project.
Thus, implementation of the balanced scorecard is 
supported by all nine elements of the Business excellence 
model which is, with certain adjustments, also apply as 
“IMPA project excellence award model”. The Model is an 
over-arching, non-prescriptive framework based on nine 
criteria. Five of these are “Enablers” and four are “Results”. 
The “Enabler” criteria cover what an organization does. 
The “Results” criteria cover what an organization achieves. 
“Results” are caused by “Enablers”. Excellent results with 
respect to Performance, Customers, People and Society 
are achieved through Leadership driving Policy and 
Strategy that is delivered through People Partnerships 
and Resources, and Processes.
The application of balanced scorecard methodology 
in a project-oriented company requires the following 
changes and adaptations (Norrie et al., 2004):
■ The role of the balanced scorecard changes from the 
tools for the measurement of achieved strategic goals to 
the tools for the measurement of project performance 
and their comparison to planned influence of the 
projects on executable business strategies;
■ Instead of focusing on business strategy, the focus 
is placed on the borderline of project and business 
strategy, their integrated application and use of project 
BSC as a leadership tool;
■ Changes of traditional approach in the measurement 
of project goals and exits, and establishment of project-
oriented measurements related to strategy.
4. Conclusion
The concept of project-oriented company comprises 
contemporary PM concepts (project portfolio 
management, program management, multi-project 
management, virtual project management, etc) and 
enables the integration of strategy, project portfolio and 
operational project management. The project-oriented 
company represents, on one hand, a system framework 
for PM methodology application, which ensures the 
strategic management by projects, and on the other hand, 
a promoter of concrete actions in order to achieve a 
competitive advantage in a multi-project environment.
Strategic project management provides an integrative 
management approach, based on the application of the 
theory and practice of project management, strategic 
management, PMO concept, change management and 
leadership. Such a system enables the increase of executed 
projects and programs effectiveness, which results in 
increasing the effectiveness of the whole company. Also, 
the balanced scorecard should be implemented in order to 
secure success of broad range of activities from launching 
strategy to measuring performance of related project. It 
is an important issue because the company’s competitive 
advantage might be under threat by the following factors: 
globalization, new markets, the application of new 
organizational forms and the development of information 
and communication technologies.
5. References
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“Understanding the Role of Vision in Project Success”, 
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Cicmil, S. (1997): “Critical factors of effective project 
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Đuričin, D., Janošević, S. (2005): “Menadžment i 
strategija”, Ekonomski fakultet, Beograd.
Hamel, G., Prahalad, C. K. (1989): “Strategic Intent”, 
Harvard Business Review, 67, No. 3.
Hebert, B. (2002): “Tracking Progress”, CMA 
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Ives, M. (2005): “Identifying the Contextual Elements 
of Project Management within Organizations and their 
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Kaplan, R. S., Norton, D. P. (1996): “The Balanced 
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