Designing Meta-Organisations: An Empirical Study of Boundary Setting in Large Infrastructure Projects

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Abstract

This study examines the organisational architecture of megaproject meta-organisations; that is project-based organisations formed to deliver one-off, capital-intensive systems. It investigates how the organisation that promotes the megaproject â€Â“ the buyer organisation - divides and allocates the scope of the development work during the delivery phase across multiple suppliers. In so doing, the buyer organisation sets organisational boundaries around its own work and that of each project supplier: effectively creating the megaproject meta- organisation architecture. We use organisation design literature as the main cognitive lens to understand the architecture of megaproject organisations. This literature posits that organisational boundaries can be understood by examining the interplay of four logics: i) Transaction Cost Economics (TCE), ii) capabilities, iii) power and iv) organisational identity. The impact of these four logics on organisational boundaries has been theorised extensively in the context of the enduring firm. Here, we seek to extend our knowledge of boundaries in megaproject organisations. Unlike the enduring firm, megaproject organisations do not operate in efficient markets, are set up to have a finite-lifespan and are highly interdependent with their environment. Megaproject organisations are also a critical form of organising addressing one of the grand challenges of our time: the provision of basic infrastructure. Yet, little is known about the architecture of megaproject organisations. To address this theoretical and empirical gap, we undertook a multiple case research. We conducted an in-depth analysis of the procurement choices for four large infrastructure assets: the London Olympics 2012, Crossrail, Thames Tideway Tunnel and Heathrowâ€Â™s Terminal 2. The research results in the development of an original conceptual framework that illuminates how the four complementary logics are brought to bear in the organisational design choices that determine megaproject architectures. The study contends that the organisational boundaries, which demarcate the work of each supplier, are the outcome of a reconciliation of efficiency concerns and considerations about the capabilities available in-house and in the supplier market. Importantly, this reconciliation is context-sensitive. Hence, the solution space for potential organisational architectures is constrained by considerations related to power and organisational identity. Power constraints are rooted in the interdependency of the buyer with its environment, including regulatory-political and ownership relations, as well as its bargaining position vis a vis suppliers. Organisational identity constraints relate to the buyer organisationâ€Â™s identity, which is both pre- given and developed through self-selection over time.

Keyword(s)

capabilities; identity; infrastructure; megaproject; organisation design; organisational boundaries; power; transaction cost economics

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