The effect of organizational culture on the decision-making process of portfolio management.

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High-tech firms are expected to pursue innovations constantly to not fall behind. It is not easy to decide which specific innovation to pursue and how to create an optimal project portfolio. Lots of research has been done on the decision-making process of portfolio management and the influence of certain aspects. However, research on the effects of organizational culture on this decision-making process has been rarely done. Organizational culture has a great influence on many decision-making processes; hence, the expectation arises that the overall organizational culture will have an effect on the decision-making process of portfolio management. Therefore, the aim of this research was to improve the understanding of the decision-making process of high-tech businesses and the influence of organizational culture, in order to help managers create a successful innovation project portfolio. This explorative research was conducted through a multiple case study, in which employees from three different high-tech firms were interviewed. First, the organizational culture was investigated and assigned to one of the following cultures: a clan culture, an adhocracy culture, a market culture, and a hierarchy culture. Furthermore, the decision-making process regarding portfolio management was investigated. Organizations often use a combination of the following processes: evidence-based decision-making, power-based decision-making, and opinion-based decision-making. This research found that organizations often have one or two prevailing processes. The link between the four organizational cultures and the three decision-making processes resulted in multiple discovered relationships. This research found that organizations resembling an adhocracy and market culture, mostly apply an evidence-based decision-making process. Organizations resembling a clan culture, often make use of opinion-based decision-making next to evidence-based decision-making. Organizations resembling a hierarchy culture, apply a power-based decision-making process next to an evidence-based decision-making process. The findings of this research could be enhanced by more in-depth research within the cases, to create a more complete image of the organizational culture and the decision-making process.
Faculteit der Managementwetenschappen