Integration of Customer-Facing Actors in Project Marketing

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Tampere University Dissertations 727

727/2023MATIAS STÅHLE Integration of Customer-Facing Actors in Project Marketing

Integration of Customer-Facing Actors

in Project Marketing

MATIAS STÅHLE

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Tampere University Dissertations 727

MATIAS STÅHLE

Integration of Customer-Facing Actors in Project Marketing

ACADEMIC DISSERTATION To be presented, with the permission of the Faculty of Management and Business

of Tampere University,

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ACADEMIC DISSERTATION

Tampere University, Faculty of Management and Business Finland

Responsible supervisor and Custos

Professor Tuomas Ahola Tampere University Finland

Supervisor Professor Miia Martinsuo Tampere University Finland

Pre-examiners Associate Professor Per Svejvig

Aarhus University Denmark

Professor Mika Gabrielsson

University of Eastern Finland Finland

Opponent Associate Professor Kirsi Aaltonen University of Oulu Finland

The originality of this thesis has been checked using the Turnitin Originality Check service.

ISBN 978-952-03-2709-5 (print) ISBN 978-952-03-2710-1 (pdf) ISSN 2489-9860 (print) ISSN 2490-0028 (pdf)

http://urn.fi/URN:ISBN:978-952-03-2710-1

Carbon dioxide emissions from printing Tampere University dissertations have been compensated.

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“There is nothing like looking, if you want to find something. You certainly usually find something, if you look, but it is not always quite the something you were after.”

― J.R.R. Tolkien, The Hobbit

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PREFACE

I once told myself that after the master’s thesis, I will finally be done with studying, and I could move on to “working life”. Well, little I knew where I would find myself round five years later. I got the opportunity to conduct research after my graduation and after one year of thinking about it, I applied to pursuing a doctoral degree in 2018. When I received a positive funding decision at the end of the year 2018, my plan was determined for the upcoming years. Now that I reflect on it, I think it was one of the best decisions I have done in my life. My time at the university has not only taught me to conduct high quality research and teaching, but also shaped me as a person to look at the world from different angles. Years doing this weren’t always easy but luckily, I have had so many supportive people around me.

First of all, I would like to thank my supervisor Professor Tuomas Ahola. Our collaboration started already in 2016 and since then, you have encouraged me to grasp different opportunities in this career path. After completing the master’s thesis, I wasn’t sure at all, what to do next. You, however, believed in me to go with this opportunity and without you, this dissertation would never have seen a day light. I thank you for believing in me and my skills. I’m thankful for all the support you have given me as I know it is something that shouldn’t be taken for granted when it comes to supervising the doctoral journey. Especially, you have taught me to be proud of what one is doing and setting the bar in the correct height.

Next, I would like to thank my second supervisor Miia Martinsuo for the guidance throughout this process. Not only have you supported me in the form of co-authoring but really introduced this mystical research world to me. I will always remember my first conference trip to Boston in 2017 where you were the one who introduced me to all the fantastic international colleagues. The trip especially encouraged me later to pursue this career option at this stage of my life. I really appreciate the work you do for the doctoral researchers. You’re always available when help is needed either in writing, planning your career or otherwise in making decisions where to go next.

This dissertation wouldn’t have been finalised without excellent work done in the pre-examination process. I really would like to thank Associate Professor Per Svejvig from Aarhus University in Denmark and Professor Mika Gabrielsson from the

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University of Eastern Finland. The statements provided excellent guidance on finalising the dissertation and gave support in continuing the process to the defence phase. I am honoured to have Associate Professor Kirsi Aaltonen as my opponent.

Moreover, I would like to thank Professor Leena Aarikka-Stenroos for conducting the internal examination for my thesis. Those comments really helped to get the manuscript in the final form before the pre-examination. My deepest gratitude goes also to all the anonymous peer reviewers of the journal and conference articles, and editors and editorial boards of the journals that published my work.

This research wouldn’t have been possible without funding. I would like to thank Business Finland and Data to Wisdom (D2W) research project 2016-2019 where I started the data collection for this dissertation. Thank you, Nina, Pasi and Jyri for the great work we did back then and for the support in the beginning phase of my research journey. Thank you, Tampere University, for the doctoral school funding I received for conducting my research for 2019-2022.

Great research is not done alone in the “research cave” but in teams. Therefore, I want to thank my current and former colleagues in CROPS research team.

Beheshte, Lauri, Sebastian, Jere, Toni, Pooja, Eija, Markus, Prasanna, without you, this journey would have been extremely miserable. Thank you for all the discussions and support throughout the years and showing me, that it is indeed possible to finish this process. Also, I would like to thank all the other great colleagues that I have met in the university, Jussi V, Lauri, Valtteri, Sami, Maija, Anil, Jenni, Linnea, Jussi H, Aki, Mohammad, Sepehr, Teemu, Tuomas, Vesa, Santeri, Margarita, Kestutis, Milla, Natalia, Johanna. You have been making working in Hervanta so much more enjoyable.

I’m very grateful that I have so many friends who have shared the pain of this process and given me a break from the work. I know you have not always been very aware what I have been doing but for me, your presence has been valuable. It is impossible to mention everyone but especially with people in Tampere, Anni, Elina, Kristian, Pasi, and Miika, and in Turku, Sanni, Pekka, Sofi, Mikko, Saku, Markus, Ida, Vesa, Mirka, Juha and Tuula we have shared good laughs throughout the years.

James and Minna, thank you for staying in my life despite the occasional distance.

Edvina, thank you for being there in good and tough times.

Lastly, I wouldn’t be here without the beloved family members I have. Thank you, my parents Taina and Ralf, and Sirpa for always being there for me. Moreover, thank you, my sister Mia for showing little brother how to do this. My brother Otto, thank you for the support throughout these years and for many happy and hilarious moments. You’re always more than welcome to join the Velhokoulu journey

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whenever you like. Little brothers Alex and Marcus, I’m grateful we have shared so many years together. Susanna, I’m happy that you have joined this family and hopefully will stay for many years to come. Thank you all!

In Tampere on the 21st of November 2022 Matias Ståhle

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ABSTRACT

Many firms in today’s business-to-business (B2B) markets are answering their customers’ business problems by providing unique solutions that often combine tangible products and intangible services. The marketing and provision of solutions is, however, a challenging managerial process that relies on the expertise of both internal and external actors whose work needs to be integrated across the life cycles of the solutions.

A typical way of approaching solution provision is to organise the work as projects. One of the central questions discussed in contemporary project business research is what kinds of actors participate in the project delivery process. In this dissertation, the focus is on the internal (such as salespeople and project managers) and external (such as sales agents and consultants) actors who operate in the customer interface and are labelled customer-facing actors. The participation of customer-facing actors can be examined by using the organisational integration perspective, where the focus is on studying how different organisational departments of and across the organisation work together and how coordinated their activities are. From a marketing perspective, discussion about project marketing concentrates on systematic management of customer, supplier and other network relationships, and strategies for how customers could be targeted to eventually buy the solution.

Thus, this dissertation approaches solution provision from two perspectives: project marketing and organisational integration.

Although different actors’ participation and integration in project marketing have gained considerable scholarly attention, the integration of various actors has remained a difficult challenge to overcome. More empirical evidence is required regarding the participation of internal and external customer-facing actors and how their integration is managed at the individual and organisational levels during the project marketing process of solution providers. Thus, the goal of this dissertation is to provide new knowledge on the internal and external integration of these actors in project marketing.

This dissertation is a collection of four journal articles in addition to this introduction. In the articles, a qualitative research approach was followed, resulting in two single case studies, one conceptual study and one multiple case study. Case

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study papers utilised semi-structured interviews in the chosen firms as the primary data collection approach, whereas the conceptual study relied on a literature review.

The studies concentrated especially on systems delivery projects in waste management and security solutions businesses. In the conceptual study, the focus was on project-based firms in general.

The findings of the study highlight the variety of internal and external customer- facing actors and their participation in the project marketing process. Project marketing occurs throughout the project life cycle and between different projects, and the nature of actors’ participation evolves throughout exploration, construction and support-type tasks. External actors, such as agents, are central actors in discovering new opportunities in the market and supporting solution providers’

project marketing processes. Internally, the results underline salespeople’s roles in integration work; that integration is not only an individual-level phenomenon but needs to be managed at the functional and organisational levels as well. Externally, solution providers integrate with various agents to increase market coverage and collect information about potential new customers. To integrate with these actors, a portfolio approach is suggested to categorise and manage the agents.

This research contributes to the previous body of knowledge. First, for project marketing scholars, the studies conceptualise project marketing as an integrative and continuous process in which marketing responsibility can be shared between internal and external customer-facing actors. This can be achieved through various integration mechanisms that are dynamic and emphasise exploration, especially at the front end of projects. Second, integration in project marketing is a dynamic and multilevel phenomenon spanning individual, functional and organisational levels inside and outside the firm’s boundaries. Finally, integration and related practices are conditioned internally by institutional logic and externally by actors’ agencies. The results indicate that internally dynamic individual-level practices that balance the prevailing institutional logic of the organisation, and externally in the case of external agents, goal alignment and the reduction of information asymmetry between actors become important in integration management.

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TIIVISTELMÄ

Monet teollisilla markkinoilla toimivat yritykset tarjoavat asiakkailleen tuotteista ja palveluista koostuvia ainutkertaisia ratkaisuja. Ratkaisujen markkinointi ja toimittaminen on monesti haasteellista ja tukeutuu yrityksen sisäisten ja ulkoisten toimijoiden asiantuntemukseen ja työn integroitiin ratkaisuiden elinkaaren eri vaiheissa. Tyypillisesti ratkaisuiden toimitus järjestetään projekteina, joissa keskeiseksi kysymykseksi muodostuu, miten eri toimijat osallistuvat näihin projekteihin. Vaikka eri toimijoiden osallistumista on projektiliiketoiminnan tutkimuksessa laajasti tarkasteltu, näiden toimijoiden integraatio on kuitenkin edelleen merkittävä haaste monelle yritykselle.

Tässä väitöskirjassa keskitytään asiakasrajapinnassa toimiviin yrityksen sisäisiin (kuten myyjiin ja projektipäälliköihin) ja ulkoisiin (kuten myyntiagentit ja konsultit) toimijoihin eli niin sanottuihin asiakassuuntautuneisiin toimijoihin. Tutkimus tarkastelee näiden toimijoiden osallistumista, keskinäistä työtä ja integraation hallintaa projektimarkkinoinnin eri vaiheissa. Väitöskirja rakentuu neljästä tieteellisestä julkaisusta ja tästä kokoomaosasta. Julkaisut noudattelevat laadullisen tutkimuksen periaatteita ja koostuvat kahdesta yksittäistapaustutkimuksesta, yhdestä konseptuaalisesta tutkimuksesta ja yhdestä monitapaustutkimuksesta. Pääasiallisena aineistonkeruumenetelmänä toimivat haastattelut sekä aiemmin julkaistu tutkimustieto ja kirjallisuus. Tutkimukset kohdistuivat järjestelmä- toimitusprojekteihin jätteidenkäsittely- ja turvallisuuspalvelutoimialoilla sekä projektiyrityksiin yleisesti.

Väitöskirja edistää aiempaa tutkimusta käsitteellistämällä projektimarkkinoinnin integroivaksi ja jatkuvaksi prosessiksi, jossa markkinointivastuut voidaan jakaa eri sisäisten ja ulkoisten asiakassuuntautuneiden toimijoiden kesken.

Projektimarkkinointia nähtiin tapahtuvan projektien elinkaaren eri vaiheissa, joissa toimijoiden osallistuminen ja tehtävien luonne vaihtelivat tunnustelevan, rakentavan sekä tukevan tyyppisten roolien välillä. Sisäisesti tulokset korostavat myyjien roolia integraatiossa ja integraation hallintaa yksilö-, toiminto- ja organisaatiotasoilla.

Ulkoisesti ratkaisutoimittajat integroituvat erilaisten agenttien kanssa kasvattaakseen markkina-aluettaan ja kerätäkseen tietoa potentiaalisista uusista asiakkaista.

Integraatioon sekä agenttien luokitteluun ja hallintaan tämä väitöskirja esittää

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portfoliolähestymistapaa. Yhteenvetona integraatio projektimarkkinoinnissa voidaan nähdä monitasoisena ilmiönä, joka ulottuu yksilö-, toiminto- ja organisaatiotasojen sekä yrityksen rajojen yli. Integraation hallinta on ehdollista sisäisesti eri institutionaalisille logiikoille ja ulkoisesti toimijoiden agentuurille (agency).

Integraation hallinnassa projektimarkkinoinnissa tärkeiksi osatekijöiksi muodostuvat sisäisesti dynaamiset eri instituutiologiikoita tasapainottavat yksilötason käytänteet.

Ulkoisesti agenttien suhteen taas tavoitteiden yhdenmukaistaminen ja tiedonjako korostuvat.

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ORIGINAL PUBLICATIONS

Article I Ståhle, M., & Ahola, T. (2021). Balancing on a tightrope: Coping with concurrent institutional logics in project business. International Journal of Project Management, 40(1), 52–63.

Article II Ståhle, M., Ahola, T., & Martinsuo, M. (2019). Cross-functional integration for managing customer information flows in a project- based firm. International Journal of Project Management, 37(1),

145–160.

Article III Ahola, T., Ståhle, M., & Martinsuo, M. (2021). Agency relationships of project-based firms. International Journal of Project Management, 39(7), 713–725.

Article IV Ståhle, M., Ahola, T., & Martinsuo, M. (2022). Characterising agent involvement in industrial solution marketing. Journal of Business and Industrial Marketing [Manuscript submitted for publication].

AUTHOR’S CONTRIBUTION TO THE CO-AUTHORED PUBLICATIONS

Article I is based on the data I collected and analysed. The original idea was jointly developed and discussed with the co-author. I wrote the major parts of the first version of the paper and eventually presented it at the European Academy of Management (EURAM) conference in 2020. The final version of the paper was developed based on feedback received during the conference and the review process at the International Journal of Project Management. I wrote the major parts of the final paper, and the co-author helped with streamlining the literature and writing the data analysis and managerial implications for the final paper, in addition to modifying and commenting on individual sections. I had the main responsibility in modifying the

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For Article II, I collected and analysed the data, carried out a major part of the literature review and drafted the first version of the paper. The ideas and positioning of the paper were co-developed with the co-authors. I presented the first draft of the paper in 2017 at the Australian and New Zealand Academy of Management Conference (ANZAM) in Melbourne. When writing the final version of the paper, remarks from the conference and the review process at the International Journal of Project Management were jointly considered and discussed with the co-authors. Based on the comments received in the review process, I made most of the modifications to the final paper. Development ideas were jointly discussed with the co-authors and co-authors were especially helpful in streamlining the argumentation throughout the paper after my first revision work.

For the early draft of Article III, I was primarily responsible for developing the sections discussing agency theory, whereas my co-authors wrote most of the content discussing project business. The idea was developed further with the co-authors, and for the first draft of the paper, I was responsible for conducting the literature search and analysis, writing the first version of the theoretical background and creating the final results table together with the co-authors. Together with Tuomas Ahola, we presented this early version at the EURAM Conference 2018 in Reykjavik, Iceland.

After the conference, the paper was further developed based on the comments received during the conference. I played a very central role in compiling the final version of the table in the results and writing the data analysis part of the paper.

Comments based on the journal review process were actively discussed with the co- authors and I had the main responsibility in further analysis of the articles, filling the results table, modifying the data analysis and theoretical background (agency theory) sections and production of ideas (e.g., figures) for the final discussion section.

For Article IV, the original idea was based on the analysis of the data I collected during my dissertation process. In the first version of the article, I was responsible for analysing the data and producing the results section. I was not the corresponding author in this first version, which was jointly presented with my co-authors at the International Research Network on Organizing by Projects (IRNOP) conference in Boston in 2017. The paper idea was later developed further by the co-authors. It was agreed with my co-authors that I would take the leading role in developing the paper for the journal, as the paper needed more empirical evidence and thus formed one of the key papers of my final dissertation. At this point, an additional empirical case was added to the paper based on my data collection and analysis. In the current version of the paper, I have re-written major parts of the paper from start to finish and I act as the corresponding author. The first version, mostly written by the co-

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author, served as a basis for drafting the final version of the paper. Before submission, the final idea was actively discussed with the co-authors, and the paper was developed based on the comments and modification work done by the co- authors.

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1 INTRODUCTION

1.1 Background, research rationale and research gap

Firms operating in business-to-business (B2B) markets face increasing demand to provide unique solutions that meet the diverse expectations and needs of their customers (Brady et al., 2005; Ulaga & Loveland, 2014). Delivered solutions combine both tangible products and intangible services to solve unique customer problems (Davies, 2004; Tuli et al., 2007). For example, a firm may deliver a complete waste management process line with all physical components. In addition, the delivery also involves services such as installation, spare parts and maintenance plans for the lifecycle of the solution. Thus, the provisioning of solutions is often a more complex process than providing individual goods and services, as solutions are often co- created by internal and external actors of the firm (Helander & Möller, 2007; Terho et al., 2017; Tuli et al., 2007). This gives rise to the need for collaboration across multiple actors and the coordination of work tasks so that value can be delivered to customers and the goals of the firm can be successfully achieved.

Managing solution provision is not an easy task. Deliveries are often organised as projects (Artto et al., 2015; Hobday, 2000) that combine the expertise of various actors for a limited time. Typical characteristics of projects are that they have a life cycle consisting of separate phases and pre-set goals, and they are limited in time, budget and scope (Artto et al., 2011). Depending on the supplier, project deliveries can form a major part of the firm’s business activities; this part of the business can be referred to as the project business (Artto & Kujala, 2008).

Before a project exists, the fundamental issue faced by the solution provider is how to find a customer and eventually develop the project to be delivered to this customer. Here, the focus turns to the firm’s marketing and sales activities and, more specifically, to the firm’s project marketing process. Project marketing can be broadly understood as the ‘systematic management of customer, supplier and other network relationships related to the development and management of supplier’s business and is designed to achieve firm’s objectives’ (Tikkanen et al., 2007, p. 197). In other

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words, the key task of project marketing is to ensure that the firm has a continuous flow of projects that support the goals of the company (Artto & Kujala, 2008).

Research on project marketing and sales investigates how to approach customers and secure solution deliveries that meet customer requirements (Cova et al., 2002;

Skaates & Tikkanen, 2003).

To be successful in project marketing, firms are required to combine and leverage often scattered resources, both internal and external to the firm. These resources can be a combination of tangible (technology, materials, workers, etc.) and intangible (information, relationships, etc.) elements. This dissertation focuses, in particular, on actors that solution providers involve in their project marketing processes. These actors can be individuals or groups, such as organisations, that control resources and execute activities (Håkansson & Ford, 2002). More specifically, actors operating at the customer interface (i.e., between the solution provider and customer) have a crucial role in finding, targeting and persuading customers to buy solutions. In this dissertation, these actors are labelled customer-facing actors. In a project marketing context, they are, for example, internal salespeople, project managers, technology and service people and externally, different agents, consultants or other individuals or organisations that operate between solution providers and customers, especially at the front end of projects. To involve the work of heterogeneous actors with idiosyncratic roles, resources and responsibilities (Ahola et al., 2013; Cova et al., 2002; Crespin-Mazet et al., 2019) in project marketing, coordination of different project marketing activities across different actors becomes crucial.

It is often difficult to understand the relationship between actors, as project business is inherently discontinuous (Tikkanen et al., 2007). This means that there are so-called sleeping phases between the projects, where the same customer does not purchase additional solutions directly following the initial project delivery.

Moreover, networks of organisations involved in the delivery of projects tend to change across different projects (Skaates & Tikkanen, 2003; Stjerne et al., 2019), meaning that the group of actors internal and external to the firm might be completely different across various projects. At the same time, projects tend to be characterised by high task uncertainty (i.e. uncertain and complex customer needs, technological complexity is high), which requires effective ways of processing information across the project actors to reduce uncertainty (Turkulainen et al., 2013).

The problem that solution providers often face is how to efficiently combine and collaborate with internal and external actors so that project marketing activities can be effectively and efficiently performed.

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To address this problem in this dissertation, project marketing and participation across internal and external customer-facing actors are examined using an information processing view and organisational integration (Lawrence & Lorsch, 1967; Tushman & Nadler, 1978). Integration has been acknowledged as alleviating information sharing in organisations, and in a broad sense, integration concerns how different departments of the organisation work together and how coordinated their activities are in fulfilling the goals of the organisation (Barki & Pinsonneault, 2005;

Lawrence & Lorsch, 1967). Integration within a firm (internal integration) and between firms (external integration) has received broad scholarly attention in different contexts, including project business research (Eriksson & Pesämaa, 2013;

Huang & Newell, 2003; Momeni & Martinsuo, 2019a; Turkulainen et al., 2013). Still, integration remains a difficult challenge to overcome in many firms. If integration is poorly managed, it may lead to several problems, such as inadequate information sharing across functions of the firm (Cooper & Budd, 2007; Turkulainen et al., 2013), reduced project performance (Adler, 1995; Hirunyawipada et al., 2010), lost project opportunities in the marketing phase (Artto et al., 2015; Ryynänen et al., 2013) and increased costs of managing the coordination between different actors (Ford &

Randolph, 1992).

In the project marketing context, studying the front end of projects is important for creating new knowledge on how solutions are sold in practice, how different actors are integrated into the process and through what kind of activities value is created for customers. Internally, salespeople act as important boundary spanners between firms and their customers (Tikkanen et al., 2007; Wikström et al., 2010).

They are often responsible for finding new customers and project opportunities and conveying this information to other relevant people and functions within the firm.

Previous project marketing research has highlighted that project marketing can be seen as a team effort where the sales function needs to integrate internally with, for example, technology, project operations, financing and supply chain management functions (Artto & Kujala, 2008; Cova et al., 2002) in developing the offer to the customer. For securing new contracts, interpersonal relationships and personal contacts between individual salespeople and potential customers are often highlighted as important (Cova et al., 2019; Mainela & Ulkuniemi, 2013). Studying internal integration in project marketing and sales is relevant, as it is important to understand how salespeople collaborate across functional boundaries to offer valuable solutions to customers.

Previous project business research has, however, paid limited attention to studying internal actors’ participation and internal integration to project marketing.

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The contexts of the studies have often been in research and development (R&D) or construction projects and in the implementation phase of the project (Adler, 1995;

Hirunyawipada et al., 2010; Sicotte & Langley, 2000; Smits & Kok, 2012). In the context of system delivery projects, attention has been put on the project sales and services (Artto et al., 2015; Momeni and Martinsuo, 2019b) or sales and project operations functions (Turkulainen et al., 2013), but research on the actor level participation (e.g., regarding salespeople) and how it evolves throughout the project marketing process is more limited. Internal integration has been studied in a more general supply chain management-oriented research for example between manufacturing and sales and marketing (Malhotra & Sharma, 2002; O’Leary-Kelly &

Flores, 2002; Swink & Song, 2007), marketing and R&D (Griffin & Hauser, 1996;

Hausberg & Leeflang, 2019) and sales and marketing (Le Meunier-Fitzhugh &

Massey, 2019). Delivering solutions as projects is, however, different from manufacturing or product development contexts because the target of integration is different (Momeni, 2019; Turkulainen et al., 2013). More studies on how internal integration is managed in project marketing and what kind of practices are utilised at the individual and organisational levels are required.

Externally, many firms, including solution providers, use different sales intermediaries, such as agents, dealers and distributors, in their marketing efforts (Bergestuen et al., 2022; Momeni & Martinsuo, 2019a; Rapp, 2009). Previous project marketing research highlights that solution providers need to be positioned and connected to the local market environment and its various actors (such as suppliers, subcontractors, agents, politicians, logistic and maintenance partners) to successfully and repeatedly close project sales (Aarikka-Stenroos et al., 2018; Ahola et al., 2013;

Blomquist & Wilson, 2007; Cova et al., 1996; Crespin-Mazet et al., 2019; Görög, 2016; Tikkanen et al., 2007). However, previous discussions have focused predominantly on supplier or contractor integration, especially in the context of construction projects when project are in the implementation phase (Crespin-Mazet

& Ghauri, 2007; Hietajärvi et al., 2017; Xu et al., 2021). Less empirical work has been conducted in the context of complex solution deliveries (Ahola et al., 2017; Jaakkola

& Hakanen, 2013; Momeni & Martinsuo, 2019a) and more specifically, how different external customer-facing actors (such as agents or distributors) can be integrated to the project marketing process in the early phases. Project marketing often binds actors for a long time and requires deep expertise in the technical properties of the delivered solution, and quality of information, resources, goals and the degree of control between the actors are often uncertain (Cova et al., 2002; Lehtimäki et al., 2009; Müller & Turner, 2005). In this environment, previous studies have not

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properly addressed how to integrate with, for example, external sales agents that support the business of the solution provider on a commission basis across different project deliveries. This dissertation aims to fill this gap by increasing the understanding of how external actors can be utilized in project marketing and how to manage external integration of complex solution deliveries.

1.2 Research objectives and research questions

The goal of this dissertation is to provide a new understanding of internal and external actor participation and integration in project marketing. This dissertation aims to shed additional light on how customer-facing actors, both internal and external, can participate in the project marketing process in complex solution deliveries and how integration is managed in project marketing at the organisational and individual levels. There have been calls for more empirical studies focusing on the front end of projects (Cova et al., 2019; Jalkala et al., 2010; Momeni & Martinsuo, 2019a) and especially what kind of marketing and sales activities firms conduct before projects are implemented in different contexts. For practitioners, this study provides suggestions on how integration could be managed both internally and externally to enable more successful project marketing and sales in the future.

This dissertation builds on the viewpoints of the information processing view (Galbraith, 1973; Tushman & Nadler, 1978) and organisational integration (Barki &

Pinsonneault, 2005; Lawrence & Lorsch, 1967) discussions and combines them with discussions on project business and project marketing and sales (Artto & Kujala, 2008; Cova et al., 2002; Skaates & Tikkanen, 2003). Specific attention is paid to the practices of integrating customer-facing actors into the project marketing process of the solution providers. Customer-facing actors often have significant responsibility for finding opportunities in the market and constructing and closing the project deal with customers. The following research questions are posed:

1. How do different customer-facing actors participate in solution providers’

project marketing processes?

2. How do solution providers integrate with customer-facing actors in their project marketing processes?

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The empirical attention focuses on the front end of projects in B2B markets in medium-sized firms. Medium-sized firms were considered a suitable setting, as they often have distinct project marketing activities but, at the same time, a more limited resource base compared to bigger companies when approaching customers solely by their own salespeople. Hence, they rely on external actors for their project marketing efforts. Project marketing is broadly seen as spreading from the front end to the operations phases of the project life cycle and the phases between specific project deliveries. Different articles discuss the phenomenon in various phases of projects.

This dissertation takes the point of view of the solution provider, as the results contribute to the management of project marketing by the solution providers. To sum up, the key concepts this dissertation builds upon are presented below in Table 1.

Table 1. Key concepts of the dissertation and their definitions Key concept Definition

Project A unique entity formed of complex and interrelated activities, having a predefined goal that must be completed by a specific time, within budget, and according to specification (Artto et al., 2011, p. 17)

Project business The part of business that relates directly or indirectly to the projects, with the purpose of achieving the objectives of a firm or several firms (Artto & Wikström 2005, p. 351)

Project marketing Project marketing concerns marketing activities related to the projects a firm delivers to its customers. Marketing activities relate to systematic activities through which the company aims at optimal value creation for its customers, shareholders and other network partners in accordance with the set strategic and operational objectives. (Tikkanen et al., 2007)

Integration The process of achieving unity of effort among the various subsystems in the accomplishment of the organisation’s tasks. Integration is concerned with how harmoniously different subsystems work together and how coordinated their activities are in fulfilling the goals of the organisation. (Lawrence & Lorsch, 1967) Organizational

integration Integration that is concerned on the extent of how organisational units, departments or partners constitute a unified whole (Barki & Pinsonneault, 2005) Customer-facing actors Individuals or groups, such as organisations, that control resources and execute activities (Håkansson & Ford, 2002) and are operating at the customer interface.

1.3 Research process and structure of the dissertation

This research was completed partly within the research project From Data to Wisdom (D2W) (2018–2019) and partly within Tampere University’s doctoral school funding (2019–2022). The D2W project was funded by the National Technology

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companies and research institutions. The dissertation format is a compilation thesis, which contains four journal articles and this introduction. Three of the four articles are published in the International Journal of Project Management and one article has been submitted for review for potential publication in Journal of Business and Industrial Marketing. Each article contributes to the overall topic and research questions of the dissertation, and the original articles can be found as appendices in the printed version of the dissertation.

The preliminary idea for the dissertation was developed during the D2W research project. After the research project, the search for empirical evidence occurred during 2018–2020. Eventually, a case company was found to provide further insights for the research. During 2019–2020, an interview round was conducted at the company that sought development ideas for their project marketing process. The data (interviews) collected from this case company provided a foundation for Article I.

Article I discusses the internal marketing and sales practices of the focal firm.

Specifically, the article focuses on how to cope with concurrent sales of more standardised equipment and tailored projects. The preliminary article idea was presented in 2020 at the EURAM conference and eventually, the article was submitted and published in the International Journal of Project Management in 2021. This article contributes to research questions 1 and 2 by revealing how different salespeople participate in solution provision and how institutional logics condition the integration practices of the sales function at the individual and organisational levels.

Article II discusses cross-functional integration in a project-based firm (PBF).

This article focuses on how the PBF uses different cross-functional integration mechanisms when managing customer information flows before, during and after a project has been delivered. The first draft of the article was presented in 2017 at the Australian and New Zealand Academy of Management Conference (ANZAM) and the article was submitted and published in the International Journal of Project Management in 2019. Article II contributes to research questions 1 and 2 by revealing how internal actors (sales, project operations and services) participate in the project marketing process and how these internal actors are integrated into project marketing through the use of integration mechanisms.

Article III discusses different agency relationships in project-based firms. During the D2W research project, it was discovered that project-based firms may utilise different agents to complement their project marketing efforts. This finding inspired a research process that resulted in the publication of Article III. Based on the extensive literature review, these agent relationships were mapped across the project

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life cycle. The preliminary article idea was presented in 2018 at the EURAM conference and the article was submitted and published in the International Journal of Project Management in 2021. This article contributes to research questions 1 and 2 by revealing how a firm can manage complex agency relationships across the project life cycle phases and what kinds of contextual factors are related to the management of these relationships when integrating these actors into project marketing.

Finally, Article IV combines and compares the insights from the two case companies and focuses especially on agent involvement in marketing processes. The preliminary idea for this article arose during the D2W research project, and findings based on the single case were presented at the International Research Network on Organizing by Projects (IRNOP) conference in Boston, USA, in 2017. Later, in 2021, this paper was complemented with the findings from another case based on data collection between 2019–2020 to create further insights of the research topic than a single case could offer. Article IV was submitted to Journal of Business and Industrial Marketing in spring 2022. This article contributes to research questions 1 and 2 by revealing how a specific external resource, namely agents, can be involved in the project marketing process and how their involvement differs depending on the responsibilities these agents are given.

In Figure 1 below, the outline of the focus of the dissertation and position of the individual articles is presented. Articles I and II are specifically focusing on internal actor participation and integration whereas Articles III and IV are focused on the external actors.

Figure 1. Outline of the dissertation focus and position of the articles.

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This introductory chapter describes the motivation for the dissertation and presents the main research questions and objectives for this study. The structure of the introductory part of the dissertation is organised as follows. First, the theoretical background of the studied phenomenon, in terms of project business and project marketing and internal and external integration in project business, is discussed.

Second, the research methodology is presented, including the research strategy, context, methods and a detailed description of the data and its analysis. Third, a summary of the four articles and their main findings is presented in their individual subchapters. Finally, the discussion and conclusions sections contain the contributions of the whole dissertation in light of the previous literature. This chapter also contains the main theoretical and managerial contributions and discussion of the limitations, analysis of validity and reliability of the findings and avenues for future research.

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2 THEORETICAL BACKGROUND

2.1 Key concepts in project business and project marketing

2.1.1 Provision of solutions as projects

A growing number of firms have shifted their focus from delivering standardised and standalone goods and equipment to providing more comprehensive solutions to their customers (Brady et al., 2005). The goals of these solution deliveries are often related to finding new business for the company and creating and maintaining long- term customer relationships in the value creation process (Anderson et al., 2009;

Brady et al., 2005). For example, a firm may offer its customers different services, such as spare parts and maintenance, over the system life cycle and bundle the service offering with the ‘physical’ system delivery (Artto et al., 2015). In the literature, these solutions are commonly referred to as complex products and systems (CoPS) (Davies & Brady, 2000), customer solutions (Tuli et al., 2007), lifecycle solutions (Kujala et al., 2011) or integrated solutions (Davies, 2004). In this dissertation, the term solution is used and defined as a set of products or services that are customised and integrated to address a customer’s specific business needs.

Delivering solutions differs to a great extent from traditional goods-centric businesses. In solution businesses, the focus of the firm is oriented towards value co-creation with the customer, meaning that the solutions are often jointly developed with the customers to answer their specific needs and, eventually, to fulfil the business objectives of the delivering firm (Helander & Möller, 2007; Storbacka, 2011;

Tuli et al., 2007). To fulfil these needs, firms need to rely on the expertise of their different internal functions, such as sales, operations, finance and product development; therefore, solution provision is fundamentally a cross-functional and collaborative effort (Storbacka, 2011). Selling solutions is often a long process that requires a specific set of salesperson capabilities (e.g. gaining a deep understanding

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and learning about the customer business model, networking skills and continuous identification of new business opportunities along the solution life cycle) (Terho et al., 2017; Ulaga & Kohli, 2018). Solution deliveries involve many stakeholders outside firms’ boundaries, such as component suppliers, multiple actors in the customer’s organisation, authorities or logistics partners; this involvement increases the complexity of the solution deliveries (Gummesson & Mele, 2010; Jaakkola &

Hakanen, 2013).

One of the central questions in the research on solution provision is how to organise solution deliveries. A common alternative to delivering solutions is to organise these deliveries as projects (Artto & Kujala, 2008; Hobday, 2000).

Throughout the history of mankind, big construction activities, in particular, have been implemented through projects to develop societies. Nowadays, projects are also utilised in product development, strategic and change management, systems deliveries, research and event production. Projects can be seen from different points of view (e.g. more as a process or an organisation), but in this dissertation, a project is defined as ‘a unique entity formed of complex and interrelated activities, having a predefined goal that must be completed by a specific time, within budget, and according to specification’ (Artto et al., 2011, p. 17). In other words, projects pose a different managerial challenge compared with more repetitive processes and thus need to be studied concerning the dimensions of uniqueness (no similar project exists), temporality (limited time to complete the task, projects have a life cycle) and complexity (interrelation of activities, resources and network actors).

Project management research is a rather young research stream that has evolved during the past decades from consideration of planning, scheduling and governing a single project to managing a network of actors in a multi-project environment (Artto

& Kujala, 2008; Morris, 1994). When broadening the scope and putting this research stream into a framework, we may talk about project business, which is commonly defined according to Artto and Wikström (2005, p. 351) as ‘the part of business that relates directly or indirectly to the projects, with the purpose of achieving the objectives of a firm or several firms’. According to this view, a project business should be seen broadly outside of a single project to concern long-term perspectives on strategic issues at the organisational level. Also, the scope needs to be broadened to pre-and post-project phases, meaning that project business research is interested in what happens not only in the project implementation phase but also before the actual project exists (project front end phase) and after the project has been delivered (post-project phase). Figure 2 below presents a general project life cycle figure.

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Figure 2. Typical project life cycle phases (Artto et al., 2011)

From the point of view of this dissertation, the fundamental differences between project business and more repetitive business processes are related to the uniqueness (no similar project exists, end products are made according to customers’

requirements), the complexity (in terms of technology and actors participating in the project) and the temporal aspects (life cycle point of view, limited time frame) of the projects. In solution delivery projects, the focus is on how projects are developed and sold to customers in different life cycle phases and what kind of actors participate in the project inside and outside the firm. At the firm level, interest is on how different projects fulfil the business goals of the supplier firm, even though all the customers have unique needs and projects might last a very long time from the initial marketing activities to offering post-project support to customers.

2.1.2 Project marketing

One of a firm’s key processes is its marketing process. Generally, a firm’s marketing strategy can be defined, according to Tikkanen et al. (2007, p. 197), as ‘the systematic effort through which the company aims at optimal value creation for its customers, shareholders and other network partners in accordance with the set strategic and operational objectives’. Thus, the key concerns in marketing are related to how a firm creates, captures and delivers value to its customers and for itself (Anderson et al., 2009). Marketing is fundamentally a contextual discipline and it has evolved over the years to concern issues such as value co-creation and service-dominant logic, relationship marketing, customer behaviour and market orientation of the firm in the search for an integrative theory of marketing (Parvatiyar et al., 2021). A firm’s marketing strategy is constantly evolving due to the changes in the environment in which it operates, and a firm’s marketing function continuously anticipates market

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needs and adapts its marketing activities to respond to the changes (Parvatiyar et al., 2021).

In this dissertation, the focus is on B2B marketing in one specific form: project marketing. Project marketing concerns marketing activities related to the projects a firm delivers to its customers (Tikkanen et al., 2007). A core task of project marketing is to ensure that a firm delivering projects has a constant flow of projects that support the goals of the company (Hadjikhani, 1996). Furthermore, in project marketing research, every project is considered unique and can be seen as its own market, in which case the execution of traditional market research, the identification of possibilities and the anticipation of customers’ needs are often challenging (Cova &

Hoskins, 1997). Connected to the project business in general, delivered projects are often complex in nature, they involve numerous stakeholders, transactions are large, and there is often discontinuity in the customer relationship between different projects, as the same customer is not always ordering a new project soon after the previous delivery (Artto & Kujala, 2008; Aspara et al., 2013; Cova et al., 2002; Skaates

& Tikkanen, 2003). In addition, successful project deliveries require collaboration between the parties in the project network, but managing these direct and indirect stakeholder relationships often becomes challenging (Aaltonen & Kujala, 2016;

Bourne & Walker, 2005; Brady et al., 2005; Windahl & Lakemond, 2006).

To better understand project marketing and what project marketers do, a project marketing process has been presented in previous research. Oftentimes, project marketing is seen as a process consisting of phases, from screening the market for potential project opportunities to closing sales and eventually implementing the project (Cova et al., 2002; Crespin-Mazet et al., 2019; Tikkanen et al., 2007). Project marketing is thus conceptualised in this dissertation from the lifecycle point of view, which considers project marketing spreading throughout the project life cycle. Figure 3 details the project marketing process.

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Traditionally, the project marketing process focuses phases on searching, preparing, bidding, negotiating, implementing and transitioning a project (Jalkala et al., 2010;

Turner et al., 2019). Salespeople search for customers through cold calls, visits, sending marketing materials, contacting buyers through web-based tools or social media at seminars and exhibitions or through resellers or other sales partners (Anderson et al., 2009; Cova et al., 2002). Important steps in the process include screening the market for potential customers, preparing and making a bid and finally negotiating the deal, which might take several months to several years (Kujala et al., 2007; Ryynänen et al., 2013; Wikström et al., 2010). This process necessitates not just active participation from salespeople but also strongly relies on other firm functions (e.g. management, technology, logistics and project management) (Artto & Kujala, 2008; Turkulainen et al., 2013).

In addition, following the logic of Cova et al. (2002), project marketing strategy concerns phases preceding any particular project opportunity (labelled ‘independent of any project’ in Figure 3) and can be seen as an ongoing effort spreading across a specific project life cycle. This project marketing strategy is connected to the overall strategy of the firm and deals with questions such as: what is the core offering of the firm, what kind of solutions are offered (so-called functional development), who are the key customers and suppliers and what is the firm’s position in the larger marketing environment/network in which the firm is operating (so-called relational development) (Cova & Hoskins, 1997; Crespin-Mazet & Ghauri, 2007). A project marketer can employ different project marketing logic based on these decisions. A firm may assume deterministic logic, in which the marketplace is actively followed and future project opportunities, which are typically openly announced public tenders, are targeted (Cova and Hoskins, 1997; Görög, 2016). When an attractive project opportunity is found, the firm utilises its resources and expertise to provide a solution that fulfils the requirements of the potential customer. On the other hand, constructivistic logic can be employed. In this case, project opportunities are actively created. The firm proposes solutions to potential customers, brings together diverse network actors (such as financiers or contractors) and provides calculations of how the proposed solutions could contribute to the customers’ business processes and profitability. A firm may also combine these two types of logic to grasp all the opportunities in the market, depending on the customer and business environment (Cova & Hoskins, 1997).

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2.1.3 Internal and external actors in project marketing

The landscape of project marketing extends beyond individual projects to concern the whole business strategy of the solution provider. Project marketing is not only a transaction between a firm’s salespeople and its customers but concerns a wide array of the firm’s actors, both internal and external (Cova et al., 2002; Tikkanen et al., 2007). The value of project marketing activities often manifests in the relationships that a firm has developed in its business environment and how well it manages to maintain these relationships across discontinuous phases between different projects (Cova & Salle, 2000).

In the project marketing process, different actors become important for realising the solution provider’s marketing strategy. Actors are individuals or groups, such as organisations, that control resources and execute activities (Håkansson & Ford, 2002) and the relationships between different actors are crucial before, during and after the project deliveries (Hadjikhani, 1996). Developing complex solutions requires the integration of multiple actors so that the resources they possess become valuable (Davies, 2004; Jaakkola & Hakanen, 2013; Windahl & Lakemond, 2006).

Thus, a fundamental part of solutions business is not only a given set of resource elements but also ongoing interactions among the actors involved (Cantù et al., 2012;

Windahl & Lakemond, 2006).

An important unit of analysis in project marketing is the milieu. Based on Cova et al. (1996), milieu refers to a group of business and non-business actors operating in a specific geographic territory who are connected via interpersonal and inter- organisational relational ties. These actors share a common understanding of the milieu and its rules and norms. In other words, a milieu is a network composed of various actors, including both organisational and individual actors as well as business and non-business actors. These actors can vary depending on the context and industry, but in Table 2, key internal and external actors who often participate in a supplier’s project marketing process are introduced. Common customer-facing actors are highlighted in the table.

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Table 2. Key actors in project marketing Key actors participating in

project marketing Typical tasks in project marketing Example author(s) Internal actors

Salespeople • Oftentimes the main person responsible for managing project marketing and sales process

• Collaboration across actors during the process

• Communication with customers

• Commonly a customer-facing actor

Cova et al., 2002;

Ryynänen et al., 2013

Project managers • Resource planning for the upcoming project

• Increases the credibility of the suppliers’ project management capabilities

Savolainen &

Ahonen, 2015;

Turkulainen et al., 2013

Service people • Provision of after-sales services

• Manages service work

Artto et al., 2015;

Momeni &

Martinsuo, 2019b Technology and R&D • Sales support regarding technological details Möller & Rajala,

1999; Tikkanen et al., 2007; Turner et al., 2019

Top management • Ensures that the project is aligned with the

supplier’s strategy Lecoeuvre-

Soudain et al., 2009; Ryynänen et al., 2013 Lawyers • Verification of bid and contract clauses Artto et al., 2011;

Kujala et al., 2015 Accounting/Controllers • Details regarding pricing

• Managing bids for subcontractors

Artto et al., 2011 External actors

Customers • Communicating the need and request for a bid

• Co-development of the solution

• Acting as a reference for future project deliveries

Crespin-Mazet et al., 2019; Crespin- Mazet & Ghauri, 2007; Jalkala &

Salminen, 2009 Suppliers/subcontractors • Provision of details related to the work provided

(e.g. price, schedule, scope, etc.) Aagaard et al., 2015; Ahola et al., 2008; Errasti et al., 2007

Financiers/banks • Provision of financing for the supplier or

customer during the project Skaates &

Tikkanen, 2003;

Smyth & Edkins, 2007

Consultants or designers • Communication of technological or other details that might affect the project

• Represents customers in negotiations

• Special design work, if needed

• Commonly a customer-facing actor

Lehtimäki et al., 2009; Sariola &

Martinsuo, 2016

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Key actors participating in

project marketing Typical tasks in project marketing Example author(s) Agents/sales

representatives/distributors • Represents the solution provider in the local market

• Sales work

• Builds and maintains customer relationships

• Commonly a customer-facing actor

Aarikka-Stenroos et al., 2018;

Blomquist &

Wilson, 2007;

Momeni &

Martinsuo, 2019a Other non-business actors

(e.g. universities, governments, unions, activists, pressure groups)

• Might influence the outcome of the project (e.g.

environmental regulations; local laws and regulations) especially in public projects

Ahola et al., 2013;

Cova & Salle, 2005

Internal to the firm, project marketing connects various actors and functions together to solve customers’ unique problems. Project marketing is a team effort, as not a single actor or function can solve all of the details by themselves. Oftentimes, sales is a central customer-facing unit that manages the project marketing process by communicating the customer needs to other relevant actors of the firm (such as technology or project management) to develop a solution (Artto et al., 2015;

Ryynänen et al., 2013). For example, salespeople often need support from the technology function regarding technological details or from the project management function regarding what can be reasonably delivered based on the customer’s requirements. Depending on the phase of the project marketing life cycle, additional details are often needed as the process progresses regarding, for example, price estimates and scheduling and, finally, contract clauses to close the final deal.

Throughout the process, many actors participate in supporting sales, such as a project manager, service people, the technology function, product management or upper management (Artto et al., 2015; Möller & Rajala, 1999; Ryynänen et al., 2013;

Tikkanen et al., 2007).

As the focal solution provider is frequently not capable of doing everything by themselves, they need to rely on external expertise (Salonen & Jaakkola, 2015). For example, some parts of the final solution delivery can be purchased elsewhere (e.g.

technology or part of the work), meaning that the firm needs to form strong relationships with their suppliers and subcontractors who are already in the project marketing phase. In addition, firms are sometimes unable to screen the market effectively, but they rely on the help of sales agents or representatives who know the market well (Aarikka-Stenroos et al., 2018; Blomquist & Wilson, 2007). These smaller actors (individuals or organisations employing a small number of people) may find new opportunities from the market they represent, can assist in meeting

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the actual decision makers and may help in the negotiations, and thus, assist in cross- cultural communication (Cova et al., 2002; Jobber & Lancaster, 2009).

Furthermore, customers are not necessarily experts in their field regarding a specific project or do not always know all of their actual needs, which means that customers also need to rely on external experts to secure a profitable deal. For example, customers may need to involve specific consultants in the project negotiations, or later, they may need to search for potential financiers, especially in the case of large projects. Finally, project marketers may need to consider local authorities or activist groups when targeting a specific market area (Ahola et al., 2013).

In summary, the project marketing environment consists of many different actors that can be connected to a specific project in many ways. For the solution provider, this creates challenges for managing this network of actors, especially regarding how all of them can be involved in the process effectively in practice. To address this problem, answers are sought from the integration discussion, which concerns the coordination of various actors in and between organisations, in the following chapters.

2.2 Integration of actors in project business

2.2.1 Organisations as information processing systems and integration Integration in general is a complex concept that has been defined in various ways in previous research depending on the discipline (Barki & Pinsonneault, 2005; Pellathy et al., 2019). Based on the seminal work by Lawrence and Lorsch (1967), integration can be defined as ‘the process of achieving unity of effort among the various subsystems in the accomplishment of the organisation’s tasks’ (p. 4). In other words, organisations can be seen as a system of interrelated behaviours of people who are performing tasks that have been differentiated into several subsystems. Each of these subsystems performs a portion of the tasks to achieve effective performance of the system (Lawrence & Lorsch, 1967). Thus, integration is concerned with how harmoniously different departments of the organisation work together and how coordinated their activities are in fulfilling the goals of the organisation (Barki &

Pinsonneault, 2005). In this dissertation, the focus is specifically on organisational integration (Barki & Pinsonneault, 2005), where the concentration is on studying the

Integration of Customer-Facing Actors in Project Marketing

Integration of Customer-Facing Actors

in Project Marketing

MATIAS STÅHLE

MATIAS STÅHLE

Integration of Customer-Facing Actors in Project Marketing

PREFACE

ABSTRACT

TIIVISTELMÄ

CONTENTS

ORIGINAL PUBLICATIONS

1 INTRODUCTION

1.1 Background, research rationale and research gap

1.2 Research objectives and research questions

1.3 Research process and structure of the dissertation

2 THEORETICAL BACKGROUND

2.1 Key concepts in project business and project marketing

2.2 Integration of actors in project business