A Case Analysis of the Commercial Vehicle Industry
Table of Contents
Chapter I — Problem Statement & Significance
The Evolution of the Problem
Problem Statement & Significance
Chapter II — Literature Review
Background of Leadership & Project Management
Assumption of Collaboration
Collaborative Leadership & AV Project Management
Chapter III — Theory
Chapter IV — Recommendations
Daimler is one of the largest automobile manufacturers in the world and is currently spending billions on R&D to develop autonomous vehicles (AV). The race to this technology is spurred by the tremendous benefits that it may provide companies in terms of competitive advantage through disruptive technology (Frost & Sullivan, 2018). However, the development and deployment of this technology are vast and costly. Several companies, such as Apple, have already dropped out of the race due to the tremendous cost. Many of the remaining competitors have formed partnerships in order to absorb the cost and manage the risk of AV development (Frost & Sullivan, 2018). The forming of these partnerships has led to the need for collaborative leadership both at the corporate and development levels in order to facilitate knowledge acquisition, sharing, and value development (Midler, Maniak, & Campigneulles, 2019). This need for collaborative leadership presents an opportunity to study the impact of collaborative leadership on project management.
The following prospectus for research intends to perform a case study of Daimler and its newly formed partnership with BMW. In July of 2019, these companies formed a partnership for the express purpose of developing and testing AV technology (Daimler, 2019). This partnership is ongoing and intended to reduce cost and manage risk while expediting the development and deployment of AV. Other companies that are already involved in this partnership, such as Microsoft, will strengthen the development phase AV (Corwin & Pankratz, 2017).
The nature of these partnerships forces collaborative efforts, and success in similar projects reflects the value in collaborative leadership efforts (Tillement, Garcias, Minguet, & Duboc, 2019). However, the nature of vanguard projects steeped in unknowns. Project managers challenged to produce results when no clear critical path is understood and where goals are often general or created as the project unfolds.
Chapter I — Problem Statement & Significance
Beginning in the 1990s with the advent of the internet, a new era of disruptive technology accelerated due to consumer demand for information and digital services. Within a decade, companies were made keenly aware of the dangers of not adapting to the new digital disruptive technology as many large companies and even industries failed. Simultaneously, companies that took advantage of these technologies gained a competitive advantage. However, the race to adopt new technologies complicated by other factors such as the need to redesign companies and create new collaborative leadership systems within project management. Based on literature studying different models of leadership, many companies assume collaborative leadership models are necessary, but this is an unstudied factor. As such, the gap in the literature exists as to the impacts of collaborative leadership on project management.
The Evolution of the Problem
As a reaction to the impact of internet technologies, many firms race to adopt technologies early as well as adapting their organizations to fit these technologies. In many instances, this action or overreaction to the risk of technology was committed without regard for project management, assuming collaborative leadership was essential. In one case, a Chinese multinational firm underwent an entire organization redesign in anticipation of the need to change manufacturing and development technologies (Luo, Van de Ven, & Jing, 2018). In 2014, the CEO decided to redesign the company “to meet the demands of new digitally-driven markets” (Luo, Van de Ven, & Jing, 2018). While this firm performed well and increased profit and output, other companies undergoing similar changes did not fare so well.
JC Penny, an early adopter of internet eCommerce systems, has steadily declined in market share since the early 90s (Aisner, 2013). Efforts to alter the course of JC Penny have failed. Several problems cited for redesign failure include brand misidentification, miscommunication, and change mismanagement (Olenski, 2012). However, one dimension of this failure that is not studied was the leadership impact on the change management project for JC Penny. Unlike the Chinese firm, JC Penny maintained its traditional top-down approach to leadership rather than implementing a collaborative leadership model (Aisner, 2013). Examples in similar case studies of firms show a clear need for the study of the impact of collaborative systems on project management when implementing new disruptive technologies. The success of firms successfully utilizing collaborative leadership models to achieve success in disruptive markets as well as fuzzy front-end projects is limited in research due to the difficulty of studying these projects empirically. As such, there is a limited known criterion for collaborative leadership except observed instances of collaboration as related to value learning and building as present in the Daimler case.
Problem Statement & Significance
It is not known and to what extent that collaborative leadership influences project management of disruptive technology implementation.
Successful implantation of disruptive technology is an area of enormous concern for companies. Successful implementation can drive competitive advantage as well as increase areas of efficiency, profit, productivity, etc. Leadership practices understood as important factors impacting project management as “effective leadership continues to be a long-standing problem which is evidenced by both project cost and time overruns as well as an abundance of incomplete projects” (Martin & Kisa, 2016). The importance of this study is evident when the risks of substantial failure loss of competitive advantage considered.
Chapter II — Literature Review
Background of Leadership & Project Management
The impact of leadership was recognized in 1939 when Lewin et al. (1939) described three forms of leadership that impacted decision making: autocratic, democratic, and laissez-faire. These early forms of leadership style were associated with project management in terms of how authority handled, such as the authoritarian making decisions independently of teams (Lewin, Lippitt, & White, 1939). This style continues today and is known as a top-down style of leadership (Noe, Hollenbeck, Gerhart, & Wright, 2018). This leadership style provided the advantage of quick decision making when necessary and provided increased productivity in task-oriented projects (Noe, Hollenbeck, Gerhart, & Wright, 2018).
Democratic leadership defined in terms of the leader seeking consultation from team members for consideration while making the ultimate final decision (Lewin, Lippitt, & White, 1939). While the benefits of this leadership style produced increased quality, it also decreased the quantity of work due to the more time consumed in decision making (Noe, Hollenbeck, Gerhart, & Wright, 2018). The laissez-faire leadership style favored sharing authority and allowing team members to perform autonomously, which increased the completion of projects (Noe, Hollenbeck, Gerhart, & Wright, 2018).
Bass (1985) Bass further highlighted the connection between leadership style and teams by showing the need to adjust leadership styles to the environment or circumstance. This adjusting of leadership styles would lead to differentiation of styles based on organizational design, focus, forms tasks, and need for high levels of communication (Noe, Hollenbeck, Gerhart, & Wright, 2018).
Within each of these styles of management, subdivisions would evolve, such as transformational and inspirational leadership styles that fell beneath the democratic style (Odumeru & Ifeanyi, 2013). Each of these forms of leadership would be defined in terms of their impact on teams and project management. Transactional leadership styles were noted as impactful in a task or labor driving environments, whereas transformational leadership styles were cited as having more impact in creative, focused environments (Odumeru & Ifeanyi, 2013).
While the impact of leadership has been widely studied in terms of teams, it has not been studied widely in terms of project management (Turner & Muller, 2005). One important study in this area was performed by Martin and Kisa (2016), who found a significant relationship between leadership style and efficiency (Martin & Kisa, 2016).
Assumption of Collaboration
Within the literature, there is an assumption of collaboration being the most effective style of leadership for project management. Typically, studies are industry or profession focused such as a study of the effects of project management leadership in construction which showed,
“On average, each leadership style efficiency was calculated by the amount of project completed using a particular style. While democratic was the most dominant, concerning the efficiency greater than 75%, there was a tie between the democratic and transformational leadership styles” (Martin & Kisa, 2016, p. 32).
Some of the few broad studies of leadership styles impacting project success, results showed,
Although leadership or manager is rarely included in the project success factors, it influences the performance of the project through various patterns, like the collaboration of teamwork, management of source, communication with both followers and clients (Jiang, 2014).
These results are not universal as other studies of project management have contradicted the assumption that collaborative leadership plays a significant role in project success.
…projects rarely depend on only one or the other form of leadership; most of the time a mix of vertical [leader chooses team leaders] and shared leadership [team leaders are chosen by team] is used (see Figure 1) (Pretorius, Steyn, & Bond-Barnard, 2017).
There appears to be little consensus in the literature if project management is significantly impacted by leadership styles as voiced by Agarwal et al., (2017) where researchers found that leadership style may be erroneously targeted by researchers and firm leadership instead of other factors such as management skills (Agarwal, et al., 2017). Some of these skills included listening and open discussions of methodology for project completion (Agarwal, et al., 2017).
The confusion between project management skill and leadership is further identified in terms of inconsistency between managers and leaders. According to McCartney and Campbel (2006), there is no consistent combination of management and leadership skills that are indicative of success. If leadership skills and styles cannot be quantified, then success in project management is likely driven by other forces working in combination with skills (Noe, Hollenbeck, Gerhart, & Wright, 2018).
A wealth of research is committed in this area with some of the earliest researchers attempting to quantify and differentiate leadership and management skills to predicate project and organizational
“…being adaptable to situations, ambitious, cooperative, assertive, decisive, dependable, energetic, self-confident, tolerant of stress, and willing to assume responsibilities. Skills include being clever or intelligence, conceptually skilled, creative, diplomatic, effective communicators, organized, persuasive and socially skilled” (Stodgill & Coons, 1957).
While these traits seem reasonable, they are also broad in meaning and applicable to both managers and leaders. One of the primary issues with identifying specific traits in leadership is the fact that there has never been identified any specific pattern for leadership (Eaglys & Johannesen-Schmidt, 2003). Eaglys and Johanneses-Schmidt (2003), point out that while Hitler was charismatic and persuasive, he was also disorganized and lacked diplomacy.
The problem of quantifying and identifying traits of managers and leaders adds to the complication of qualifying and distinguishing effective and ineffective leaders and managers (Eaglys & Johannesen-Schmidt, 2003). Because leader and manager traits cannot be quantified, a fine line separates qualified effective managers and qualified effective leaders. According to Eaglys and Johanneses-Schmidt (2003), an effective leader does not necessarily make an effective manager or vice versa. While the terms are often used interchangeably with managers viewed as leaders there is a distinct difference in roles despite the fact that sometimes and individual will serve in both roles (Eaglys & Johannesen-Schmidt, 2003). Leaders inspire, create and motivate change through their actions and policymaking (Eaglys & Johannesen-Schmidt, 2003). Managers are tasked with carrying out the inspirations of the leadership in a practical task-oriented environment (Noe, Hollenbeck, Gerhart, & Wright, 2018). For example, managers are often tasked with maintaining the operations of the organization which is not a function of creativity or policymaking. When viewed in this light, managers can be seen more as directors or coaches of the organization.
There are also many managers who are not leaders. These managers are often found in large retail chains (Noe, Hollenbeck, Gerhart, & Wright, 2018). For example, a fast food managers operate with set systems and rules that may dictate numbers of workers they are allowed to work as well as schedules for day to day operations that are routinized (Noe, Hollenbeck, Gerhart, & Wright, 2018). These managers have little creative input since it is not their responsibility to be creative. There is little creativity in this situation and change is not the responsibility of the manager.
From these studies, no definitive line can be drawn with regard to the impact of leadership style on project management except when considered in the lens of a specific industry. For example, construction and manufacturing appear to benefit from collaborative leadership styles (Martin & Kisa, 2016) (Luo, Van de Ven, & Jing, 2018). In contrast, nursing project management cases were not impacted by leadership style but rather by the competency of the project leader as denoted by Alloubani and Almatari (2014), who showed that project leaders in nursing often had varying degrees of authoritative or collaborative styles but this showed no significant impact on success of projects. Their results discussed the possibility that some fields such as nursing may benefit from technical leadership rather than from the style of leaders themselves (Alloubani & Almatari, 2014). However, contradictory findings were found in a study of management and leadership skills in which no significant correlation could be found between manager and leader skills but instead leadership and management styles were more important to individual success. (McCartney & Campbell, 2006).
Collaborative Leadership & AV Project Management
Due to the newness of AV technology, the literature is sparse in terms of its correlation with project management and leadership study. However, an essential aspect of AV technology is that it utilizes collaborative leadership (at least within the R&D stage.) This fact is easily discerned from the number of companies that are in partnership to develop and deploy AV technology (Frost & Sullivan, 2018). Currently, Daimler leads the way with its partnership with BMW (Daimler, 2019).
Partnerships, even with competitors, is necessary with the development of AV technology due to cost. The tremendous cost of AV technology requires the collaboration of large auto manufacturers working in conjunction with software firms such as Microsoft for the purpose of R&D (Frost & Sullivan, 2018). Other contracted companies are needed in areas of development for aspects of AV development, including mechanical as well as lifestyle elements (Corwin & Pankratz, 2017).
Another aspect forcing the collaborative efforts of companies such as Daimler is financial risk management. Developing this technology efficiently and reasonably requires a shared risk approach with multiple companies sharing the cost (Frost & Sullivan, 2018). Daimler partnered with GM, Toyota, Microsoft as well as many smaller vendors who provide funding for research with the expectation of leveraging the findings (Frost & Sullivan, 2018). Directly speaking, the job is too large for any one company to handle reasonably and cost-effectively.
While sharing cost-based risk is part of the Daimler risk management approach, the company must also utilize several project management specific approaches due to the fuzzy nature of the AV development. Perhaps the most important of these approaches is the use of a scenario-based strategy for managing possible risks (Frost & Sullivan, 2018). In the scenario based strategy approach the team uses creative brainstorming to develop ideas and assess positive and negative aspects of the concepts within the scope of the project (PMBOK, 2017). Risks are weighted along different areas of the critical path (PMBOK, 2017). This method of risk management is used in a variety of fuzzy projects due to the many unknown factors in new technology development (Artto, Kujala, Dietrich, & Martinsuo, 2008). These methods require collaborative leadership in order to work effectively between cross-company teams such as Microsoft and GM developing braking systems (Daimler, 2019) (Frost & Sullivan, 2018).
Daimler also uses a relative experiences strategy which is intended to identify risks by relating past projects and experiences and tweaking them to fit the scope of the current project (PMBOK, 2017). For example, past project problems can be compared with the new project in estimating and delay issues (PMBOK, 2017). Such comparisons might include budget problems, team member issues, distribution of resources, etc. (PMBOK, 2017). Daimler uses this method as an ongoing strategy comparing developmental phases of AV technology (Frost & Sullivan, 2018).
Another strategy for risk management employed by Daimler is the objective based scenario. This strategy is used to determine risks in the project by following the same ideas as the scenario strategy and the relating past experiences strategy (PMBOK, 2017). Rather than creating scenarios or using past experiences, risks are determined using the goals and desired outcomes for the project (PMBOK, 2017). This type of strategy works best with finding the positive risks in a project versus the negative risks (PMBOK, 2017). This method was used in the development of safety systems such as vehicle braking to find the possible risks such as collisions resulting from AI failures (Daimler, 2019).
Another method of risk management involves qualitative analysis. This method of risk management ranks risks in a hierarchy of importance (PMBOK, 2017). The two components of this risk strategy include; one the measure of the likelihood of the risk occurring, and two, the measure of impact of the risk if it occurred (PMBOK, 2017). One can rate these variables quantitatively by ranking them on a scale of importance such as 1 to 10 (PMBOK, 2017). The formula requires that the first variable be added to the second variable and then divided by the total number of possible points on the scale and risks are ranked by answers from highest to lowest number (PMBOK, 2004). This method is utilized in developing less crucial systems such as lifestyle advancements (Daimler, 2019).
Each of these methods of risk management require collaborative leadership due to the need to share information but also for the ability to freely give feedback within the project (Daimler, 2019) (Noe, Hollenbeck, Gerhart, & Wright, 2018). The need to share information and to criticize ideas lends itself to the collaborative leadership approaches especially in terms of fuzzy projects with few clear goals to guide them (Tillement, Garcias, Minguet, & Duboc, 2019).
Chapter III — Theory
Since the 1990s, the rapid pace of technological innovation has challenged project management in many ways. However, a key consideration was how to manage projects that have no clear end or timeline. This type of study was originally understood to be a fuzzy front-end study rather than a project study (Artto, Kujala, Dietrich, & Martinsuo, 2008; Lenfle, 2016). Further complicating this matter is the studying of the impact of phenomena such as leadership styles on these unclear projects. Despite this unclear research, the phenomena of leadership style can be descriptively observed in the case study format utilizing a case study approach based on specific aspects of a model of “project-based learning that emphasizes an exploration/exploitation learning cycle through projects” (Brady & Davies, 2004).
The Cycle of Learning
The cycle of learning is a key theoretical component for fuzzy projects because it provides a base for the measure in the absence of complete and clear goals. The cycle of learning theoretical framework emphasizes the role of “vanguard projects” in which cyclical learning and value creation are observed in order to show project success in an ever-evolving and recursive manner. This theoretical framework for management was proposed by Midler (2013) and Maniak and Midler (2014) in what they referred to as “lineage management as a multi-project management approach that emphasizes the successive project learning and value creation processes from an initial breakthrough project.”
The cycle of learning theory finds root in other projects which describe this process as an exploration-exploitation cycle (Tillement, Garcias, Minguet, & Duboc, 2019). In this study of sodium-cooled nuclear reactor development, researchers distinguished between deliberate (defined goals) and emerging goals (new due to emerging innovation) and measured the causes and consequences of this exploration and its applicability to continued exploration, i.e., it was discovered that sodium-cooled reactors required less time to build and this knowledge is applied to ongoing development to created more refined emerging goals (Tillement, Garcias, Minguet, & Duboc, 2019).
The cycle of learning also finds a foundation in what researchers in autonomous mobility refer to as ambidextrous program management (Midler, Maniak, & Campigneulles, 2019). Traditional R&D management identifies project milestones and goals, aiming at resources for their completion. In contrast to the standard project management, ambidextrous management identifies key stages of project development and monitors their completion and impact on dependent segments (Midler, Maniak, & Campigneulles, 2019). For example, autonomous vehicles are not possible without artificial intelligence deep learning, and within the scope of ambidextrous management, deep learning is segmented into stages of completion, with each completion providing observable value for future stages of project completion (Cooper, Edgett, & Kleinschmidt, 1999).
While ambidextrous management provides a means of studying ongoing projects, this management process has large limitations as it requires close observation, and its application is long term in nature (Lenfle, Midler, & ̈llgren, 2019). In an example of ambidextrous management, a three-year study of global car manufacturers was used to develop a theoretic framework that measured the management of major disruptions in R&D (Lenfle, Midler, & ̈llgren, 2019). Similar to the researchers studying nuclear reactor development, these researchers defined disruptions in terms of exploration and exploitation (Lenfle, Midler, & ̈llgren, 2019).
The cycle of learning also finds foundation in the research of Brady and Davies (2004: p. 78), which “proposed a model of project-based learning that emphasizes an exploration/exploitation learning cycle through projects.” This cycle is specifically meant for what researchers referred to as “first-of-a-kind projects, exploring new technology, uses, business models, or strategic opportunities” (Brady & Davies, 2004, p. 79). Brady and Davies create a model of management based on value learning, which works by measuring project-to-project knowledge acquisition and the increased capabilities when applied to the organization (Brady & Davies, 2004, p. 79). For example, autonomous vehicle development has already led to significant developments of deep learning artificial intelligence, which is not limited to autonomous vehicle functions.
Collaborative Leadership & LearningThe nature of autonomous vehicle R&D is collaborative due to the tremendous cost of development and need to create learning value. Value learning as defined by Tillement, Garcias, Minguet, and Duboc, (2019: p. 539) is “that learning which provides ongoing improvements to the project.” This definition combined with the model of management based on value learning: measuring project-to-project knowledge acquisition and the increased capabilities when applied to the organization emphasizes the need for collaborative leadership (Brady & Davies, 2004, p. 79).
Chapter IV — Recommendations
The fuzzy nature of Daimler’s AV project lends itself to collaborative leadership styles. This need for collaborative leadership provides the essential autonomy needed for information sharing and for developing in-project goals. The collaborative leadership approach also provides and effective means for building learning value that can benefit the organization in the long term as well as the project period. In order to facilitate and enhance this relationship between collaborative leadership and learning the Daimler project should emphasize the project as a learning project taking cue from learning organizations. Learning organizations are defined as:
Learning organizations are those with the ability to learn how to change and improve themselves constantly. Distinct from individual learning, this intervention helps organizations move beyond solving existing problems to gain the capability to improve constantly. It results in the development of a learning organization where empowered members take responsibility for changing the organization and learning how to do this better and better (Cummings & Worley, 2015).
Readily, the learning organization presents the need for collaborative leadership. This need is further enhanced by the learning organizations methodology which is based on constant improvement (Cummings & Worley, 2015). As denoted by (Kotter: p. 945 Cummings and Worley: p73) learning organizations need collaborative leadership in order to effectively grow and change. As such a set of recommendations for Daimler can be devised for long term research and development in AV technologies.
The following recommendations are based on Kotters Change Management model and findings from the literature that define the need for collaborative leadership as well as in keeping with project management principles (Kotter, 2012, p. 83) (Meredith & Mantel, 2009, p. 61).
· Set the goal whether fuzzy or not as well as the need for achieving this goal (Kotter, 2012). The need for goals in clear whether fuzzy or not because it provides value for team members (Odumeru & Ifeanyi, 2013).
· Create partnerships within the team structure using members from multiple backgrounds and from multiple companies involved in the Daimler (Kotter, 2012).
· The project should have a vision and values that while not clear should define a plan (Odumeru & Ifeanyi, 2013). This recommendation is meant to provide focus to the project as a whole and align team direction with regard to the mission of developing AV (Meredith & Mantel, 2009) (Kotter, 2012).
· Communicate the new vision of the project and its value to the organization(s) involved and communicate this vision regularly (Kotter, 2012). how diversity fits into the organization (Kotter, 2012).
· Remove the obstacles to the change process (Kotter, 2012). Use feedback from team members to identify obstacles and then deal with these obstacles quickly (Meredith & Mantel, 2009).
· Set milestones even in fuzzy conditions in order to provide objectives that can be obtained (Kotter, 2012). These milestones can change as the project evolves.
· Build on change and learning (Kotter, 2012). At each accomplishment in the process, evaluations should be done to see what can be improved and what when well (Meredith & Mantel, 2009).
· Create a culture of change and learning (Kotter, 2012). Leaders emphasize feedback and autonomy of teams in order to facilitate creative problem solving (Kotter, 2012)
As the landscape of modern business continues to evolve towards more complex technologically driven systems, the need for collaboration continues to grow. The Daimler autonomous vehicle project is the first in what will likely become the modern standard for research and development utilizing project management driven under collaborative leadership models. The need for collaboration in leadership will likely become a long-term fixture even beyond the R&D project due to the immense scale of change that AV technology presents. Looking into the long-term, Daimler may very well represent the new standard in multinational corporations as the need for collaborating with government entities as well as companies will be the only cost effective means for risk reduction and development.
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