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International Journal of Project Management 32 (2014) 732 – 746
www.elsevier.com/locate/ijproman

Identifying, framing and managing uncertainties in

project portfolios
Miia Martinsuo ⁎, Tuomas Korhonen, Teemu Laine
Tampere University of Technology, Department of Industrial Management, P.O. Box 541, FI-33101 Tampere, Finland

Received 22 September 2013; received in revised form 25 January 2014; accepted 28 January 2014
Available online 16 February 2014

Abstract

Uncertainties in the organization, external environment and from single projects may hamper project portfolio performance unless managed
properly. This paper introduces a framework on uncertainties and their management in project portfolios and pursues increased understanding on
how managers can take uncertainty into account better. We explore uncertainties, how managers frame them as opportunities or threats, and the
actual practice of managing them across ten R&D project portfolios. The framework on project portfolio uncertainties and their management is
further refined based on the empirical results. As key contributions, we show evidence on the balanced existence of three types of uncertainties, the
threat bias in their framing, and the dominance of rational, opportunity driven mechanisms of control in uncertainty management. We discuss the
context-dependent practice of project portfolio management and the need to complement rational mechanisms with structural and cultural, for
project portfolio management to become a dynamic capability.
© 2014 Elsevier Ltd. APM and IPMA. All rights reserved.

Keywords: Project portfolio management; Uncertainty management; Uncertainty

1. Introduction management frameworks that link projects better with strategy

Companies engage in research and development (R&D) as an
investment to their future product and service offering.
Investments in R&D are risky and uncertain by nature: the
evolution of markets and technologies cannot be foreseen, due to
the variety of influencing factors. Yet, companies make efforts to
optimize their R&D project portfolios with future business in
mind. Project portfolios are being aligned with strategies and
balanced in terms of risk particularly during project portfolio
selection to positively affect future profits. The selected project
portfolios evolve over time due to a number of external and
internal reasons, which means that uncertainty exists and has an
impact also during project portfolio deployment.
Uncertainty in R&D project portfolios is becoming an
increasing concern for managers. Despite holistic project portfolio
⁎ Corresponding author. Tel.: + 358 40 849 0895.
E-mail address: miia.martinsuo@tut.fi (M. Martinsuo).
0263-7863/$36.00 © 2014 Elsevier Ltd. APM and IPMA. All rights reserved.
http://dx.doi.org/10.1016/j.ijproman.2014.01.014
(Archer and Ghasemzadeh, 1999a; Benko and McFarlan, 2003;
Cooper et al., 2001; Dye and Pennypacker, 1999; PMI, 2008),
companies face a variety of changes and unforeseen events, both
within the firm, its projects and in its external relations (e.g. Dvir
and Lechler, 2004; Steffens et al., 2007). For example, markets and
customers may change, organizations may be restructured, and
project budgets may change in an unplanned manner (e.g. Petit and
Hobbs, 2010), which all may be reflected on project portfolio
results. Internally, companies still continue to carry out “pet
projects” and “under the table projects”, i.e., projects outside of the
strategic portfolio regime (Blichfeldt and Eskerod, 2008; Loch,
2000) and they often suffer from sub-optimization at the single
project level, causing resource conflicts and competition at the
project portfolio level (e.g. Engwall and Jerbrant, 2003). Managers
need to pay attention to uncertainties, in order to keep the R&D
project portfolios on track towards the expected business profits.
Project portfolio uncertainties have been covered in previous
research in three main areas. First, many studies have revealed
that organizational context, particularly its complexity and project
 M. Martinsuo et al. / International Journal of Project Management 32 (2014) 732–746
interdependencies cause uncertainties and require different
management practices, in order to make the portfolio successful
(e.g. Blichfeldt and Eskerod, 2008; Engwall and Jerbrant, 2003;
Petit and Hobbs, 2010). Second, a few studies have directed
attention to the environmental uncertainties such as market and
technology turbulence or customer requirements that should be
taken into account in project portfolio management (e.g. Olsson,
2008; Petit, 2012; Voss and Kock, 2013). Third, also changes at
the single project level have been considered as relevant in
generating uncertainty at the portfolio level (Nobeoka and
Cusumano, 1995, 1997; Petit and Hobbs, 2010). Based on these
and other recent research, it is quite apparent that uncertainty has
implications on project portfolio management and the effects of
uncertainty may be outside managers' sphere of influence.
The starting point for this study is the understanding that
external uncertainties, intra-organizational complexities and
micro-level changes at the project level all have their potential
influence on project portfolios and portfolio management. This
is in line with the seminal work by Galbraith (1973), who
argued that the greater the uncertainty, the greater amount of
information must be processed among the decision-makers.
Research and everyday practice in multi-project organizations
show that various kinds of changes and uncertainties do take
place and they will have an impact, thereby resulting in a wide
range of information needs for the managers. The uncertainties
are an increasing concern for portfolio managers, but they as
well as their consequences are poorly understood.
Although some studies already indicate that the rationally
oriented project portfolio systems may need to be complemented
with political and structural solutions to account for the
information needs of managers under uncertain and complex
situations (Geraldi, 2008; Kester et al., 2009, 2011; Martinsuo,
2013), few empirical studies have considered uncertainties,
related information processing requirements, and how different
portfolio management frameworks are used in uncertainty
management (Gutierrez and Magnusson, 2014; Petit, 2012; Petit
and Hobbs, 2010). In this paper, we explore the managers'
experiences of different types of uncertainties in project
portfolios, how they interpret and, thereby, process the informa-
tion regarding uncertainties and eventually seek to make
decisions in order to control those uncertainties. In particular,
we are interested in how managers frame the uncertainties as
opportunities vs. threats (see e.g. Dutton and Jackson, 1987) and
whether such labeling is reflected in consequent actions.
The objective in this paper is to increase understanding on
uncertainties and their consequences during project portfolio
deployment and thereby to suggest ways in which uncertainty
can be taken into account better in project portfolio
management. Particularly, we seek the alternative interpretive
and control strategies that managers use, when facing
different types of uncertainties. We focus on three main
questions:
Research question 1: What kinds of external, organizational
and project-based uncertainties do man-
agers perceive as part of project portfo-
lio management?
733
Research question 2: How do managers frame the uncertainties
(i.e. perceive them as opportunity vs.
threat)?
Research question 3: How, through what kinds of strategies,
do managers respond to the uncer-
tainties, when managing their implica-
tions to project portfolio performance?
We respond to the call for more detailed examinations of
managing changes and uncertainties at the level of the project
portfolio (e.g. Martinsuo, 2013; Petit and Hobbs, 2010). The
paper's unique contribution lies in unveiling the whole chain
from the sources of portfolio uncertainty to the managerial
framing of those uncertainties and to the consequences and
taken control actions because of them. As a result, we will
suggest practical ways to respond to the dynamic aspects of
project portfolio management.
2. Literature review
2.1. Different sources of portfolio uncertainties
Strategic project management requires sensitivity to the
context in which projects are being managed. At the level of
single projects, it is increasingly clear that projects are tied to
their context and history and that project managers must take
this context into account in their managerial work (Artto et al.,
2008; Engwall, 2003). The same kind of contextual awareness
is required of strategic project portfolio management (e.g.
Benko and McFarlan, 2003; Brown and Eisenhardt, 1998),
although empirical research has only recently started to pay
attention to portfolio uncertainties (Petit and Hobbs, 2010).
Project and portfolio managers experience uncertainty stem-
ming from various sources in the context of the portfolio, and
such sources have been mapped in different ways in previous
research. For this study, we categorized the sources of uncertainty
into three dimensions:
• Uncertainty from the environment due to factors external to
the company that affect the portfolio.
• Uncertainty from organizational complexity due to the
parent organization's systems, structures and activities that
affect the portfolio and include portfolio-level issues and
inter-project dependencies.
• Uncertainty from single projects due to changes, deviations
and unexpected events that may take place within the
portfolio at the single-project level and may have an effect at
the portfolio level.
Table 1 summarizes examples of empirical research findings
on how the various sources of uncertainties have appeared and
affected project portfolio management. Although the different
sources of uncertainties that have an influence of the project
portfolio have been identified since late 1990s, only Petit and
Hobbs (2010) have provided examples on each three sources of
uncertainties. In all, no comprehensive presentation of the
734 M. Martinsuo et al. / International Journal of Project Management 32 (2014) 732–746

Table 1
Sources of uncertainties and their effects in previous empirical studies.
Christiansen and Varnes (2008), Politics and negotiation affect project
Blichfeldt and Eskerod (2008), portfolio decision making
Loch (2000)
Engwall and Jerbrant (2003)
Müller et al. (2008)
Nobeoka and Cusumano
(1995, 1997)
Olsson (2008)
Perks (2007)
Petit (2012)
Petit and Hobbs (2010)
Teller et al. (2012)
Voss and Kock (2013)
Zika-Viktorsson et al. (2006)
Uncertainty from organizational complexity
Resourcing between projects
(over-commitment and scheduling
deficiencies)
Governance type moderates some
relationships between portfolio control
and success
Projects may share similar risks
Inter-functional integration has an impact
on project portfolio management through
project control and evaluation criteria
Financial and resource uncertainties
are unforeseen and affect the projects'
ability to deliver results
Changes in processes, structures,
budgets and strategy influence
the portfolio
Project portfolio complexity strengthens
the relationship between project portfolio
management formalization and PPM quality
Portfolio complexity strengthens the
relationship between relationship
value for customer and portfolio success
Project personnel perceive project overload,
due to lack of opportunities for recuperation,
inadequate routines, scarce time resources
and a large number of simultaneous projects
Uncertainty from environment Uncertainty from single projects
External dynamics moderate some
relationships between portfolio
control and success
Design and technology transfer
from ongoing projects may speed
up development in
parallel and forthcoming projects
Uncertainties in project environments Single project-level risks may
may be relevant for the entire portfolio accumulate at the portfolio level
Technical and market uncertainties, norms
and regulations are foreseen uncertainties
that have an impact on project portfolio
scope and structure
New customers and markets, and changes Uncertainty in project scope,
in supplier/third-party contracts influence problems with project performance,
the portfolio and needs for customization have
effects on other projects
Technology turbulence strengthens
the relationship between relationship
value for customer and portfolio success

different sources of portfolio uncertainties and their conse-
quences exist based on the empirical research.
2.2. Organizational complexity as a source of uncertainty
Particularly uncertainties stemming from the parent organi-
zation have already been mapped in various studies. Uncer-
tainty regarding organizational complexity may stem from the
system being used to manage the portfolio, the projects'
relationships with the parent organization, interdependencies
between projects, and other managerial features specific to
the organization in question. For example Loch (2000) and
Blichfeldt and Eskerod (2008) have paid attention to the fact
that portfolio management is often limited to some types of
projects only, whereas other projects follow other types of
rules, and this diversity in itself is a source of complexity
and uncertainty. Engwall and Jerbrant (2003), in turn, reported
deficiencies in multi-project scheduling as well as over-
commitment of resources as typical features of multi-project
organizations. Teller et al. (2012) studied portfolio manage-
ment formalization, complexity and success in a broad
cross-industry sample survey and discovered that project
portfolio management formalization was more strongly associated
with project portfolio management quality when project portfolio
complexity increased.
Projects may face uncertainties in their organizational context
depending on the degree to which they experience and gain
autonomy from the parent organization (Martinsuo and Lehtonen,
2009) or are interdependent. Autonomy or lack thereof relates to
the projects' historical dependencies, possibilities to diffuse their
results within the parent organization, and portfolio control
through the parent organization's portfolio management routines.
For example Engwall and Jerbrant (2003) suggested that some
resource allocation problems in multi-project organizations may
be attributed to dysfunctional management accounting systems
that do not really serve the needs of the project portfolio. Perks
(2007) studied inter-functional integration in the parent organi-
zation and how it was considered in resource allocation choices
and, thus, portfolio management. Furthermore, Voss and Kock
(2013) surveyed the ways in which customer relationship value
explained portfolio success and noticed that the complexity of the
portfolio moderated this relationship; more specifically, interde-
pendencies and portfolio size strengthened the positive relation-
ship between value for customers and portfolio success.
 M. Martinsuo et al. / International Journal of Project Management 32 (2014) 732–746
Managers' traits, preferences and abilities as well as the
possible political and power settings concerning managers'
cooperation may also generate organizational uncertainties for
the portfolio. For example, the study by Christiansen and Varnes
(2008) showed that the decision makers' behavior in and around
portfolio decision making meetings is susceptible to various
influences, due to individuals' preferences, observing others'
behavior, and learning. Portfolio and multi-project managers
have been noticed to have different dispositional traits and
competencies that are reflected in their different managerial
practices (McNally et al., 2009; Patanakul and Milosevic, 2006,
2008).
2.3. External uncertainties
Increasingly, attention is moving from the limited parent
organizational context towards more complex business contexts
(see Artto et al., 2008). If broader project and business networks
have an effect on single projects and their management, they will
eventually impact project portfolios, too. Frameworks of project
portfolio management include risks (i.e. known uncertainties
with known probabilities and impacts) as a factor to be taken into
account in project selection and resource allocation (Archer and
Ghasemzadeh, 1999b; Hall and Nauda, 1990), risk-return ratio as
a should-meet criterion when selecting projects (Cooper et al.,
2002) and volatility as a factor to be accounted for in decision
making (e.g. Luehrman, 1998). Olsson (2008) finds that projects
actually share risks, but the risks are not necessarily accounted for
at the portfolio level and may continue in consequent projects.
Compared to the repeated attention to organizational complex-
ities and their related uncertainties, fewer studies have examined
external and single project-related uncertainties besides including
known risks into portfolio decision making.
Such issues as contextual dynamics (Müller et al., 2008),
business or geographic context of the companies (e.g. Müller et
al., 2008), technical and market uncertainties, norms and
regulations (Petit, 2012), cooperation and contracts with suppliers
and third parties (Petit and Hobbs, 2010) and market and
technology turbulence (Voss and Kock, 2013) are examples of
uncertainty sources stemming from the broader business and
societal environment in which the organization operates. Some
conceptual studies suggest that interactions with customers in
product development portfolios and the need to take customers'
wishes into account will have an effect on project portfolios
(Voss, 2012). Recent quantitative studies on project portfolio
management and its success acknowledge technological and
market uncertainties as potential contingency factors, affecting
how managerial activities are associated with portfolio manage-
ment success. For example, market and technology turbulence
(Voss and Kock, 2013), and external dynamics (Müller et al.,
2008) have been discovered as relevant in mediating or
moderating the relationship between certain project portfolio
management dimensions and project portfolio success. Recent
research also shows that portfolio managers' risk management
routines influence project portfolio success (Teller and Kock,
2013).
735
2.4. Uncertainties from single projects
Project level influences such as changes in resource use or
scope have broader implications, too, due to the interdepen-
dencies between projects. Although deviations and changes at the
single-project level are increasingly studied and considered
highly relevant to project success (Dvir and Lechler, 2004;
Hällgren and Söderholm, 2010), so far few studies link such
changes to the project portfolio level (Olsson, 2008; Petit and
Hobbs, 2010). For example, the case study of Petit and Hobbs
(2010) showed that various changes dealing with the project
scope, customer requirements and target customers had implica-
tions on the portfolio because of the high degree of interdepen-
dency between the projects; i.e. changes in single projects were
reflected on changes in other projects and the portfolio as a
whole. Olsson's (2008) action research study in a transport
solution firm revealed that companies are not necessarily aware
of how risks at single project level accumulate at the portfolio
level and that companies do not necessarily have mechanisms
available to collect and interpret portfolio-related risk data.
Earlier research also indicates that positive uncertainties such
as synergies and learning are not always exploited in project
portfolios even if they may generate significant opportunities.
According to Nobeoka and Cusumano (1995, 1997), companies
use various strategies in their technology and design transfer from
certain projects to others. Their broad, hypothetic-deductive
studies in the automobile manufacturing industry revealed that
rapid design transfer strategies between projects performed
significantly better in lead times, engineering hours (Nobeoka
and Cusumano, 1995) and sales (Nobeoka and Cusumano, 1997)
than other technology transfer strategies. They revealed various
difficulties among the different design transfer strategies that may
endanger multi-project performance, ranging from single project
issues to the parent organization and competition. Their studies
highlight that it is not only learning between projects as such, but
also its speed that is relevant to multi-project success.
2.5. Framing of uncertainty
In uncertain contexts, the managers' information processing
needs are highlighted (Galbraith, 1973). As there are no objective
measures of the scope and content of the uncertainties, it is the
managers (either jointly or individually) who need to interpret
what the relevant uncertainties are and how they should be
treated. Therefore, managers frame the uncertainties based on the
information that they have available and choose their actions
respectively. Uncertainties stemming from organizational, envi-
ronmental or project-based sources may be framed differently,
based on the background and dispositions of individuals. Our
starting point in this study is Dutton and Jackson's (1987) idea of
how decision makers categorize strategic issues (in our study
uncertainties) into opportunities and threats and that such
categorization consequently affects information processing as
well as managers' actions on the issues. Their review study
proposes that labeling an issue as opportunity implies a positive
situation in which gain is likely and over which the individual has
a fair amount of control, whereas framing an issue as threat
736 M. Martinsuo et al. / International Journal of Project Management 32 (2014) 732–746
implies a negative situation in which loss is likely and over which
the person has relatively little control.
Empirical studies of framing have followed particularly in
the domains of strategic management and entrepreneurship.
Jackson and Dutton's (1988) study in particular lent support for
their proposed threat and opportunity features, by arguing that
the difference between the issues labeled as opportunities and
threats will result in differences in the processes taken to
resolve those issues. In general, opportunities are associated
with a higher number of alternative solutions, restricted only
to a more limited extent by other issues, and the managers
are more willing to take part in identifying responses to
opportunities. With the help of their experiment, Jackson and
Dutton (1988) suggested that there is a bias towards threats in
strategic issues. In other words, if there is lack of information
about an issue, or if the information is ambiguous in nature, the
managers more easily label it as a threat. Moreover, the
dichotomy of threats and opportunities was suggested to be
perhaps too straightforward, and there may be a need for
additional concepts for comprehending the view on the
strategic issues. In this paper, we acknowledge that not all
issues can be clearly categorized as either opportunity or threat
but they may be ambiguous or neutral.
Some studies on framing the strategic issues as threats and
opportunities deal with the product development context
specifically. Du Preez and Pistorius (1999) provide a framework
for assessing technological threats and opportunities to anticipate
the future of the technologies in order to systematically develop
product strategies. As highlighted by du Preez and Pistorius
(1999), not only should the technological aspects, but also the
markets (and in this paper also a number of internal aspects)
should be taken into account when framing the technological
threats and opportunities. Recently, Plambeck (2012) conducted
a survey study with 84 car component supplier firms in their
R&D. He followed Dutton and Jackson's (1987) approach to
framing issues as threats and suggested that the managerial
cognition, the individual perception of a manager significantly
affects the label of a given (strategic) issue. As a result, he
discovered that managers' negative evaluations of the issues
driving product innovation lead to less innovative new products.
In light of the previous findings and suggestions on strategic
issues as threats and opportunities, our interest is in better
understanding whether managers' framing of project portfolio
related uncertainties as relevant strategic issues is somehow
related to their propensity to act on the uncertainties. By
analyzing the labels given to the specific uncertainties by the
managers, we may find out, whether the labeling seems to
be based on managerial cognition (Plambeck, 2012), whether
the threat bias seems to exist in the project portfolio context
(Jackson and Dutton, 1988), and whether the means to manage
the uncertainties are indeed more easily connected to opportunities
(Jackson and Dutton, 1988).
2.6. Managing project portfolio uncertainties
As understanding of the contextuality of single projects has
increased (e.g., Artto et al., 2008; Engwall, 2003), so has
understanding of the context dependence of project portfolio
management (Martinsuo, 2013). Petit and Hobbs (2010), for
instance, have called for more knowledge on how the dynamics in
project portfolio environments should be considered when
managing the portfolio. Different risks, changes, deviations and
unexpected events create unavoidable uncertainty that will
demand responses from managers, not yet sufficiently defined in
project portfolio management standards (Petit and Hobbs, 2010).
It is not only single-project level uncertainties and risks that
must be managed, but also the risks shared by multiple projects.
Recent research has begun to show evidence on how known
uncertainties (i.e. risks) are managed at the project portfolio
level (e.g. Olsson, 2008). Teller and Kock (2013) have studied
risk management as part of project portfolio management using
a questionnaire with 176 companies. They show that risk
transparency and risk coping capacity are positively associated
with project portfolio success. In particular they emphasize the
importance of risk identification and supportive culture to risk
transparency, and importance of proactive risk prevention to
risk coping capacity. In turn, risk monitoring has a negative
effect on risk coping, thereby indicating that control may have a
detrimental effect on learning ability and communication.
Teller and Kock particularly call attention to flexibility in risk
responses, as a potential further research avenue.
Some conceptual, normative and qualitative studies empha-
size that managers select (or need to select) practices for
managing project portfolios in such a manner that will fit with
the degree of contextual uncertainty. For instance, Loch (2000),
Blichfeldt and Eskerod (2008) and Christiansen and Varnes
(2008) report differentiated managerial behaviors depending on
managers' knowledge of their environment (or lack of
knowledge, i.e., uncertainty). Project portfolios have increasing
chances of success if they have sufficient access to information
from single projects (e.g. Martinsuo and Lehtonen, 2007). The
study by Petit and Hobbs (2010) shows that uncertainty and
changes have a significant role in project portfolio manage-
ment, and managers must sense and seize uncertainty-related
information and consequently do transformative actions in the
project portfolio. Although knowledge transfer and learning
from and between projects is repeatedly encouraged in project
portfolios (e.g. Nobeoka and Cusumano, 1995, 1997), in
practice the systems, tools and processes developed for project
portfolio management do not usually cover sharing knowledge
about contextual and project-based uncertainties. There is
increasing evidence that portfolio managers are not necessarily
well informed of all relevant issues (e.g. Blichfeldt and
Eskerod, 2008).
Besides information access, portfolio managers need to
develop ways to either decrease the risks associated with
uncertainties, learn to cope with them, or even create ways to
benefit from them. Uncertain business context actually requires
that technocratic, evidence-based portfolio decision making
processes would be complemented with or even replaced by
other alternatives: namely structural, power-based and opinion-
based decision making processes (Allaire and Firsirotu, 1989;
Kester et al., 2011; Martinsuo, 2001). Martinsuo (2001, also
2013), Geraldi (2008) and Kester et al. (2009, 2011) suggest that
 M. Martinsuo et al. / International Journal of Project Management 32 (2014) 732–746
rational, normative portfolio management frameworks should be
complemented by negotiative and political systems and structural
solutions, to enable a more proactive orientation toward the
uncertain context. Jerbrant and Gustavsson (2013) reported some
qualitative evidence on the improvisational nature of managers'
actions as well as new structural solutions, to cope with portfolio
uncertainties.
In some studies, project portfolio management itself has been
portrayed as a dynamic capability (Killen and Hunt, 2010; Killen
et al., 2008, 2012), i.e., as a set of people, structures and processes
that are used to meet the requirements of the dynamic
environment. Project portfolio management, therefore, can be
considered a compilation of mechanisms developed to sense,
seize, transform and reconfigure external information, to enhance
the competitiveness of the portfolio in dynamic environments
(Petit and Hobbs, 2010, based on Teece 2009). Such qualitative
and conceptual studies point out the importance of understanding
uncertainty and the information needed for managing uncertainty.
How external information is gathered, interpreted and used to
mold managerial decisions and actions is the primary concern for
managing project portfolios (Biedenbach and Müller, 2012).
In all, project portfolio management has frequently been
treated as a rational system of decision making where uncertainty
causes unwanted exceptions and problems. Recent conceptual
and empirical studies suggest that alternative models are needed,
to account for the dynamics and politics in project portfolio
management. More empirical research is needed to reveal
managers' experiences and responses to uncertainties, and
whether and how the political and structural portfolio solutions
may complement the rational systems in different uncertainty
conditions. We explore the use of three uncertainty management
categories of rational, structural and political–cultural controls
based on previous research (based on Allaire and Firsirotu, 1989;
Geraldi, 2008; Martinsuo, 2001, 2013) to offer evidence on
managerial responses in uncertain portfolio contexts.
3. Research methodology
3.1. Research design
We employed a qualitative study, using data from ten
industrial firms to explore managers' perceptions of portfolio-
related uncertainties and their management. Uncertain events
and related portfolio-level practices were registered across ten
R&D project portfolios based on thematic interviews. The
companies included in the study are examples of R&D
intensive companies in Finland and within their industries.
Seven of the studied portfolios are from machinery manufactur-
ing industry, and three are in other industries (ICT, information
systems and consumer products). The companies are large and
they have product development portfolios very typical to their
industries. Thereby, the chosen companies are excellent
examples of industrial product development portfolios. Some
background information on the companies is shown in Table 2.
In order to maintain confidentiality with the companies, we will
use numerical codes (Company 1–10) to differentiate the
companies from one another.
737
3.2. Data collection and analysis
The authors conducted and analyzed 22 in-depth interviews
with 28 persons in the companies, the lengths of the interviews
averaging 114 min. The interviewees are from different positions
in project portfolio management: R&D managers, project
managers, marketing and product managers and business
controllers. The interviewees represent a variety of different
managerial levels, e.g., the business controllers range from a Chief
Financial Officer at the corporate level to local cost controller. The
experience of the interviewees in R&D and in the firms under
examination ranges from 1–2 years to more than 30 years of
experience. With these job profiles, we sought first-hand
knowledge about dealing with the project portfolio, its manage-
ment and uncertainties. By choosing multiple informants with
different job profiles in the same companies we aimed for a
comprehensive view to the portfolio at hand in the companies.
As part of a broader set of questions on R&D management
and control, we asked about the uncertainties of the portfolio
stemming from the business environment and from single
projects, as well as the consequences and actions they have
evoked. The interviews were typically conducted at the
interviewees' job location, in a meeting room, by one or two
interviewers. The interviews were recorded, and the data were
analyzed based on transcriptions and cross-tabulations of
uncertainty-related excerpts from the data.
For the data analysis, we utilized three analysis dimensions
based on the literature review and explored 1) the sources of
uncertainty (organizational, environmental and project-based),
2) the managers' framing of the uncertainty (opportunity or threat;
or eventually ambiguous/neutral as it was needed during the
data analysis) and 3) means to manage the uncertainties (rational,
structural, and power-based/cultural). A somewhat more elaborate
coding scheme was developed for the sources of uncertainties and
means to manage them, through issues emerging in the data.
The coding was made with the help of Atlas.ti software to
systematically categorize, cross-tabulate and scrutinize the find-
ings. The data analysis took place in the following phases: i) the
identification and categorization of the sources of uncertainties in
the project portfolios under examination, ii) coding the framing
of the uncertainties as opportunities, threats or ambiguous/neutral;
iii) coding the consequences of the uncertainties and the actions
taken by the interviewed managers. Based on these analyses,
iv) the results were cross-tabulated and visualized, to reveal the
linkages from issues and framing to consequent actions, and an
extended framework for identifying and categorizing the uncer-
tainties is proposed. Finally, v) contributions and managerial
implications were outlined based on the analysis.
4. Results
4.1. Identifying and framing the uncertainties
In order to complement the previous understanding on
portfolio-related uncertainties that have focused on organization-
al complexities, we tracked environment-based and project-based
uncertainties across the ten investigated companies through
738 M. Martinsuo et al. / International Journal of Project Management 32 (2014) 732–746

Table 2
Background information on the studied organizations and the number of interviews.
Company Industry Nr of employees Turnover Nr of interviews/interviewees Duration
1 Machinery and service provider N10 000 N 3 billion euros 3/5 208 min
2 Manufacturing systems and service provider b500 b 100 million euros 3/3 338 min
3 Machinery and service provider N500 N 100 million euros 1/3 104 min
4 Manufacturing machinery and service provider ca. 30 000 N 5 billion euros 1/1 172 min
5 Manufacturing machinery provider N5000 N 1 billion euros 4/5 253 min
6 Manufacturing machinery provider N5000 N 1 billion euros 2/3 195 min
7 Machinery and service provider N1000 N 300 million euros 3/3 567 min
8 ICT product and service provider N10 000 N 1 billion euros 1/1 76 min
9 Consumer product manufacturer N2000 N 300 million euros 3/3 502 min
10 Information systems and services provider N15 000 N 1 billion euros 1 113 min
Total 22/28 2529 min (42 h 9 min)

interviews. Even if the interview outline did not include
organizational complexities separately, interviewees did discuss
them frequently and, therefore, all three classes of uncertainties
are included in the analysis. The companies operate in highly
competed industries with demanding clientele, and we expected
that it would offer a fertile ground for identifying uncertainties
towards the product development portfolios.
The interviewees indeed characterized a rich field of
uncertainty and an organizational context where the extant
project portfolio management methodologies do not fully
enable accounting for such uncertainty. Table 3 summarizes
the different sources of uncertainties identified in the interview
data, their frequencies, and how managers framed the uncertainties
in light of their own experience and knowledge. The coding
of the data included some cases where a specific uncertainty
issue was given two different labels; the uncertainty was, for
example, framed by the interviewee both as an opportunity and
as being ambiguous.
The three types of uncertainties were almost equally actively
discussed in the interviews. Managers framed the uncertainties
in all categories more often as threats than opportunities. The
examination of the framing of the uncertainties shows how
uncertainty information is processed as part of managers'
personal and social sensemaking during project portfolio
management.
Environmental uncertainties were identified as dominantly
dealing with markets and the society. Examples of environ-
mental uncertainties labeled as threats were the global economy
decline in 2008–2009, strengthened competitors, lower cus-
tomer demand than expected, tightening emission regulations,
and reduced funding for technology development in joint
collaborations. For example, in some interviews the ongoing
changes in legislation were seen as threats, thereby influencing
the manager's possibilities to affect and control the situation.
As one manager characterized: “If we do not change the
specification, we will not manufacture [the product that does
not fit the standard] anymore”.
In many interviews, societal issues were experienced quite
neutrally, not producing any surprises or even opportunities,
when the manager is aware of the evolution early enough.
Environmental uncertainties that were considered as neutral or
ambiguous were, for instance, customer demand, developing
markets, competitors introducing new products, and environ-
mental values, such as emission and product safety regulations.
Regarding the customer demand, some interviewees saw the
fast-moving customers as a threat for a (too) static product

Table 3
Summary of uncertainties and their framing identified in the data (n = 28 interviewees).
Uncertainty category Examples n Threat Neutral/ambiguous Opportunity
Environment 75 27 31 17
Society Legal developments, regulations, safety, global economy downturn 32 12 16 4
Markets Customers, market development, price erosion, difficulties to 30 11 11 8
estimate project business impact
Industry Competitors, technological development 13 4 4 5

Organizational complexity 76 32 23 21
People Organizational politics, competences 18 11 5 2
Company Organizational structure, technology push, function interaction, strategy 18 5 6 7
Inter-project relations Resource allocation, project scheduling, project priorities 40 16 12 12

Single projects 63 31 7 25
Evaluation The business impact of one project, failure, learning from single projects, 13 3 1 9
goal complexity
Project characteristics Special and large customer supply projects, product development site 3 2 – 1
relocation decision
Scope Product features, component features, platform-development 22 11 3 8
Cost Project budget, product cost 11 5 2 4
Schedule Project duration 14 10 1 3
 M. Martinsuo et al. / International Journal of Project Management 32 (2014) 732–746
offering. Also more long-term market trends were identified.
One interviewee considered the emerging Chinese markets as a
neutral fact affecting the company's business. Identifying new
potential customers with varying needs was seen as an
opportunity for developing the project portfolio by one
interviewee. Uncertainties stemming from within the industry
were seen as threats almost as frequently as they were
considered as neutral or opportunities. Environmental uncer-
tainties labeled as opportunities included environmental values,
technology maturation, customer demands, and opportunities to
become part of some joint development projects. Interviewees
experienced technological development as a rather slowly
affecting issue in the development of the project portfolio.
Organizational complexity as uncertainty was experienced
the most frequently dealing with inter-project relations, e.g.
resource allocation, timing and project prioritization. Organi-
zational uncertainties labeled as threats included the continually
changing organizational structures, difficulties to prioritize
projects, development resource layoffs, and single projects
taking more time than expected. One interviewee perceived the
complex company structure as a challenge for product
development projects in general: “It has been challenging
that you have to be able to match [the outcome of development
projects] to very different product areas. Then of course the
resourcing stuff [is a challenge] as well. That is just because of
the organizational structure of the company.” One interviewee
commented on employees' incapability to make tough deci-
sions to follow the new strategy of the business unit: “We have
some small update projects with some important resources that
would be needed in something strategically more important.…
These are tough decisions. You might forget the strategic point
there.” Of course, if the limited resources were re-allocated due
to the new project priorities, it may cause delays and be harmful
for some projects. “The group [of product developers] is so
small. If something starts to take more time then we might have
to override something [else]. Like ‘okay, let's put [a new
product] into hold mode for two weeks in order to accomplish
this other one’”.
Project prioritization and scheduling were discussed quite
neutrally among the interviewees. One interviewee pointed out
that the projects are always interrelated. Also, crossing the
borders of organizational units was considered as a natural
characteristic of the project portfolio management. “It must be
across product lines how we deal with the portfolio, because
we have common resources after all. You have got to manage
the portfolio as one.” This interviewee's comment highlighted
the interplay of projects in resource management as an ordinary
feature of project portfolio management.
Also some opportunities were seen stemming from organi-
zational complexity. One interviewee identified the need for
connecting the changes in the offering plan to the changes in
the portfolio, thereby enabling the better management of the
plans for project execution: “In an ideal case, we should have
an offering plan according to which you [go ahead]. You have
your ongoing projects, which you accomplish in the set
schedule. And a new project would be based on the offering
plan, which would of course change according to changes in
739
the strategy.” Also alternative scenarios of portfolios were
discussed in some organizations as uncertainties that need to be
investigated, to enable decisions regarding the strategic
direction.
Single project uncertainties appeared the most often dealing
with the project scope and its changes, and schedules. The
project scope, for instance, posed both threats and opportunities
towards the project portfolio. Single-project-related uncer-
tainties labeled as threats were, for instance, changes in project
scope during project execution, and waiting for an output from
another project before the next project can be initiated. One
interviewee found it hard that the projects were managed in
such a way that changes in the scope were allowed: “It is damn
hard for us that our projects change so much. And that way
even project outcomes change [as] the project scope changes.”
Another interviewee pointed out that technical problems in
product features may escalate into a larger issue, affecting the
project portfolio: “If for some reason the product design has to
be changed or product performance is not what we imagine it
should be, it can jeopardize the whole product offering or parts
of it. These are risks really difficult to manage.” Also, some
uncertainties were discussed related to project budgets and
timings. The threats at the end of the project were brought up
by one interviewee: “Now, we are facing problems at the end
of the project, in the phase of the field tests… these problems
lengthen the previous project [and thus postpone a new one].”
In all, interviewees discussed multiple uncertainties related to
the management of current interdependences between the
projects within a portfolio.
Regarding single project uncertainties, interviews addressed
quite neutrally the uncertainties with project success and
contribution to firm-level performance, and project duration
when a project needs to be finished, before the next one
can start. Opportunities were, in turn, identified in various
situations where new solutions could be used in different
new product development projects. Sometimes, however, the
isolation of the solutions to a single project was seen as a
threat, because then possible mistakes could not be seen that
rapidly.
There are, quite naturally, overlaps in the results regarding
the different sources of uncertainty. Some uncertainties can be
interpreted to stem from multiple sources. A fact that customers
are important may turn into a threatening uncertainty from the
project portfolio management perspective when the urgency of
serving customers is combined with organizational difficulties
to prioritize projects. Customer delivery projects rule over
technology projects when engineer-to-order, customization and
new product development resources are shared. In the data
analysis, joint occurrences of multiple uncertainties were coded
respectively as multiple sources of uncertainty. In the example
above, the depicted uncertainty was interpreted to belong to
two categories, environment (customer) and organizational
complexity (project prioritization).
In all, the results show that uncertainties were more often
labeled as threats than opportunities. On one hand, labeling
uncertainties more as threats may be due to the threat bias
(Jackson and Dutton, 1988), and on the other hand due to the
740 M. Martinsuo et al. / International Journal of Project Management 32 (2014) 732–746

Table 4
Summary of interviewees' identified means to manage the uncertainties (n = 28 interviewees).
Control type Examples Frequency
Rational 28
Strategic management Familiarizing oneself with competition, portfolio management tools, learning from 25
past projects for future planning, building a roadmap for the future, estimate future
business opportunities, fixing plans but leaving buffers for change, taking decisions
to higher managerial levels, arranging portfolio meetings, reacting
Cost and financial management Gathering project budget statistics for future planning purposes, increasing project 3
cost control, looking at firm-level figures rather than project-level figures

Structural 8
Organizational structure, operational Product development located within one unit, product development process model
and administrative management used, development ideas need to serve more than one customer, strict prioritization,
product release policy

Cultural and political 8

Competence, social influence, value-based Prioritizing safety/customer issues, embracing failure, embracing perseverance,
management and leadership improve project management skills, go with intuition
Total 44

predominantly negative connotation of uncertainty as a
strategic issue, thus easily associated with negative outcomes
and lack of control. Uncertainties were also found to be labeled
as neutral and ambiguous. These labels may partly stem from
the manager's aim to provide a comprehensive view on the
uncertainties from multiple viewpoints during a personal
interview.
As a central result, the data show that environmental sources
of uncertainty were framed as threats and neutral or ambiguous
relatively similarly, whereas they were less actively labeled
as opportunities. Furthermore, the interviewees perceived
organizational-complexity-based sources of uncertainty mainly
as threats, and less as opportunities, except inter-project relations
which was considered as a source of opportunities. Single-
project-based uncertainties were the most easily categorized
either as a threat or as an opportunity.
4.2. Responses to the uncertainties
The means to respond to the sources of uncertainty in project
portfolio management were much less identified or discussed in
the interview data. To understand which response is linked to
each source of uncertainty, we paid attention only to such
uncertainty response strategies that were directly linked to a
source of uncertainty in the interviewees' talk. These results are
presented in Table 4. In all, the low degree of expressed control
in managing uncertainties was somewhat surprising and will
deserve further attention. This general observation echoes the
idea of the threat bias (Jackson and Dutton, 1988), conveying
the idea that the uncertainties are negatively associated, with
only limited possibilities of control related to them.
As shown in Table 4, regarding the different mechanisms for
controlling the uncertainties, various rational methods were the
controls most often mentioned. These rational controls included
planning such as strategic planning and portfolio management
tools, methods for resource planning and project controlling,
and budgeting and measuring at the levels of the portfolios and
single projects.
Rational decision making often dealt with the factual evidence
available for justifying some decisions. An interviewee referred to
business case calculations as basis for decision making in strategic
management: “It is hard [to calculate benefit/cost-ratio], but let's
say, if you do not do it at all then that is even harder.” Another
interviewee brought up strategic management characterized by
the ratio of risks, benefits and investments: “One year ago we had
this [project] that included an impressive investment… totally into
this new thing, clearly [with] lot of risks involved. I asked the
project responsible that ‘could we not go forward with little less
money?’ He then proved me that a [smaller investment] does not
bring significant savings.”
Strategic management can also work as a shield against
uncertainties stemming from the customers, as one interviewee
pointed out: “I'd personally like to see that we have two years
forward more or less known what we're going to do. Some
small window or buffer we can accept from the buyer.”
Another interviewee expressed that it is important to stay aware
of what happens in the near environment and react to those
changes in the strategic management of product development:
“Technologically this industry is developing quite slowly. If
[new] things turn up, they come from the competitor… These
regulatory issues, requirements or standards are a different
story, but also in this case the one-year horizon is kind of short.
[…] Then we just prioritize the most important ones of those
coercive things… They [however] have a huge effect on our
product development roadmap.”
Also the accuracy and statistical utilization of project data, in
financial management, were discussed as rational ways to deal
with uncertainties. One interviewee was craving for more past
project data to base future planning on: “If we just could
estimate and do resourcing more accurately… then portfolio
building would be more efficient, and project execution as well.
Even without statistical data, we have some hunch which is
quite realistic, but that hunch is still more vague than if we had
a couple of [past] projects as a basis to see that it always take
this much time.” Another interviewee pointed out a develop-
ment in gathering project data for financial management, and
 M. Martinsuo et al. / International Journal of Project Management 32 (2014) 732–746
thereby getting a good overall picture of what is happening in
the project portfolio: “Surprises occur all the while because we
haven't properly controlled project costs, for instance. It has
been the exercise of the past year to properly look at them
[project costs], and also ask those project managers about
what they're planning there.” Altogether, the interviewees
painted a picture of rational controls dominated by strategic
management, when uncertainties are controlled. Cost and
financial management played a minor role in responding to
uncertainties.
The interviewees seemed to acknowledge the need for and
importance of other than rational controls, but to a lower
degree. Only a few uncertainties were clearly connected to the
possibility to manage them with structural controls. The
structural controls primarily dealt with the administration of
the companies, for instance, the overall project model,
processes and policies, and sometimes also to the centralized
product development organization. Organizational structure as
a means of control for uncertainties was expressed only as a
single data point. Some interviewees mentioned policies that
gave clear guidelines for portfolio management, which could
be interpreted as structural control. One interviewee gave an
example of such policy: “It [a development idea] has to have
clear signs of being something that is wanted by also others
than only that one client”. According to such a policy, the
project portfolio could consist of only such projects that serve
more than one customer. If the portfolio included a project that
would serve only one customer, and particularly if that project
was large in scope, development resources could be used
inefficiently.
Another interviewee highlighted the policy of strict project
prioritization: “I think the best way to manage uncertainty is
probably to have a long enough roadmap visible in the future.
[…] It is clearly linked to having clear priorities… When things
are in an order of importance, then it is quite easy to look at
execution.” In all, the interviewees gave an impression of using
policies as structural controls that enabled, prioritized and
structured the decision making.
The political and cultural controls expressed by the
interviewees, included the values for prioritizing safety and
the customer viewpoints, orientation for developing skills of a
team, and respecting one's intuition. Some aspects of business
were considered values that guide decision making when there
is uncertainty. For instance, in one interviewee's talk, safety or
customer issues could bring up a need to respond instantly,
which would affect the project portfolio because of resourcing:
“Safety issues… you do not even have to think for a second if
they occur. But these small, often customer-specific things…,
they are also something that you have to do instantly… actually
they surpass everything else.” The intrinsic value of safety and
customers, in this interviewee's talk, would automatize
decisions, and therefore possibly surpass something else that
could well be rationally justified. Another example of values
used in controlling uncertainty was another interviewee's
comment on the belief in perseverance, in product develop-
ment: “It [the demand] changes along the global economy, and
I understand this well, and I am one of those making these
741
decisions when it is tight… of cutting near-future investments.
But I wish, speaking of product development, that we would not
operate only on the business cycle of a public company, but…
[we] would think of things further ahead in the future… I wish
and believe that we have the perseverance and sense.” In this
interviewee's talk, the project portfolio can be affected by a
value of perseverance in a situation of demand uncertainty.
Resonating with the previous interviewee's comment and the
possibility of a failure occurring, another interviewee highlight-
ed the fact that as product development efforts do not always
succeed, you can also learn from failure. However, this
interviewee mentioned that the organization does not necessar-
ily understand the value of failure, harvested in organizational
learning: “You should understand that if you are not taking
risks, and really fail, then you do not achieve anything. There is
no such ideal world, in which you would always magnificently
succeed everywhere, and do the right choice. This is such a
complex world that you cannot do that. You have to fail in
order to learn. And with the measurement of today, there is
really no measure for what is the value of a failure. That is kind
of interesting.” Positive reinforcement in the form of reward
and recognition were not discussed in our data, although it
could well be considered a possible mechanism for controlling
for uncertainties. In all, the results show that using safety and
customer issues in justifying decisions and learning from
failure dominate the use of political and cultural controls for
uncertainty.
To summarize the results on the responses to uncertainty,
there is a wide range of different possible means to manage the
project portfolio uncertainties. The range of the means can,
however, address only a limited set of the total uncertainty
identified. The choice is somehow guided by managers' access
to relevant information, through labeling each uncertainty as an
opportunity or a threat, and the identification of a suitable
control mechanism within the firm's system of management
controls.
4.3. Cross-tabulation of sources and means to manage
uncertainties
Outlining the association between the different sources of
uncertainties, their framing as opportunities and threats, and the
means to manage the uncertainties requires a cross-tabulation
accordingly. In Table 5, the sources of uncertainty are linked
with the consequent actions named by the interviewees, bearing
in mind the framing of those uncertainties. The means to
manage the uncertainties were primarily connected to ‘oppor-
tunities’ and ‘neutral’ uncertainties, and a little less to ‘threats’.
This seems to be the case more or less equally among the
different sources of uncertainties.
Despite the dominance of threats in the identified uncer-
tainties, a majority of the rational controls were associated with
the opportunities and neutral uncertainties. In all, the managers
interpreted that the use of a set of planning tools was actually
able to open possibilities in terms of managing uncertainties.
The different sources of uncertainty were equally discussed by
the interviewees and they all seem to vary by perception in a
742 M. Martinsuo et al. / International Journal of Project Management 32 (2014) 732–746
Table 5
Sources of uncertainty and their links with consequent actions (n = 28 interviewees).
Rational
(28)
Environment Opportunity (2)
(15 controls identified to 75 uncertainties) Neutral (6)
Varying by perception (8):
Short term planning (2)
Long-range planning (6)
Organizational-complexity Threat (2)
(13 controls identified to 76 uncertainties) Neutral (5)
Opportunity (4)
Varying by perception (11):
Short term planning (3)
Long range planning (7)
Financial management (1)
Single-project-based Threat (1)
(16 controls identified to 63 uncertainties) Neutral (2)
Opportunity (6)
Varying by perception (9):
Short-term planning (3)
Long-range planning (4)
Financial management (2)
similar manner. In fact, the opportunities were dominantly
associated with strategic management possibilities across the
three uncertainty categories, whereas the threats seemed to
require more short term action planning to remain under
control.
Regarding the structural controls, most of the means were
again associated with the opportunities. In this category, no
clear indications of varying means according to the framing of
the uncertainties were found. Cultural controls were associated
slightly more often with threats than opportunities, and they
were identified in connection with environment-related and
project-related uncertainties; not organizational complexity. As
conveyed by the interviewees, there are certain uncertainties,
such as safety issues and customer requirements that can-
not be easily captured by the rational controls but require
shared values and other social mechanisms to be sufficiently
addressed.
As can be concluded based on the empirical results, there is
a large number of uncertainties identified by the managers,
framed by the managers particularly as threats or neutrally, and
not controlled by any mechanism among the rational, structural
and political–cultural alternatives. Even if the threats may have
an effect on the portfolio, they are not fully addressed in
managerial practice. The opportunities are dealt with by the
managers by many different means, with emphasis on rational
controls.
5. Discussion
The paper intended to increase understanding on uncer-
tainties and their consequences during project portfolio
deployment and thereby to suggest ways in which uncertainty
can be taken into account better in project portfolio manage-
ment. Particularly, we sought the alternative strategies that
Structural Political and cultural
(8) (8)
Threat (1) Threat (3)
Neutral (2)
Opportunity (1) Dominant (3):
Dominant (4): Values
Policies and procedures
Neutral (1)
Opportunity (1)
Dominant (2): n/a
Policies and procedures No identified cultural controls
Opportunity (2) Threat (2)
Opportunity (3)
Varying (2): Varying by perception (5):
Organizational structures (1)
Policies and procedures (1) Social and self-controls (2) if
threat, values (3 if opportunity)
managers use, when facing different types of uncertainties and
framing them as opportunities or threats. The paper reported
interview results on the different perceived sources of
uncertainties (external, organizational and project-based uncer-
tainties), the framing of those uncertainties as opportunities,
neutral aspects and threats, and the response to the uncertainties
accordingly through the employment of rational, structural and
cultural/power-based means.
5.1. Uncertainties and their management in project portfolios
The interviews of managers in the ten different companies
revealed a rich set of different sources of uncertainties, thereby
portraying the managerial relevance of managing portfolio
uncertainties. The findings contribute by showing qualitative
evidence of various ways in which the project portfolio is
connected not only with the complexities of the parent
organization, but also with the broader business environment
and single projects. As recent research is increasingly concerned
with how portfolios are connected to their uncertain contexts (e.g.
Engwall and Jerbrant, 2003; Martinsuo and Lehtonen, 2009;
Petit, 2012; Petit and Hobbs, 2010; Voss, 2012; Voss and Kock,
2013), our results build a conceptual framework and structure for
charting that contextuality in a simple and logical manner.
Concerning the first research question, the interviews offered
clear evidence of the existence of three different sources of
uncertainties and resulted in their more elaborate structuring.
Where previous empirical research has emphasized organization-
al complexities as the primary focus of uncertainty, our findings
highlight that managers of R&D portfolios follow and identify
external uncertainties from the broader business environment
equally well and consider them as relevant to portfolio
management. Besides industry and market related issues, societal
and legal matters were of concern to managers, which thereby
 M. Martinsuo et al. / International Journal of Project Management 32 (2014) 732–746
lends support to the findings of Petit and Hobbs (2010, also Petit,
2012). Regarding organizational complexities, our study revealed
an emphasis on inter-project relations as a primary source of
uncertainty (others dealing with structure and competence). This
is in line with the resource-related dilemmas identified earlier
(e.g. Engwall and Jerbrant, 2003), deviates slightly from the
structure and system-centered previous research (e.g. Loch, 2000;
Perks, 2007) and lends support to using interdependency as a
central measure of portfolio complexity (Teller et al., 2012; Voss
and Kock, 2012).
Previous research has covered single-project based uncer-
tainties at the project portfolio level primarily through scope
and performance (Petit and Hobbs, 2010), risks (Olsson, 2008)
and technology transfer issues (Nobeoka and Cusumano, 1995,
1997). Although single project changes have been considered
as relevant to project success (Dvir and Lechler, 2004; Hällgren
and Söderholm, 2010), their implications at the portfolio level
have been poorly understood so far. Our findings have revealed
the important role that single project changes play at the
portfolio level, through their strategic and business goals,
positioning in the offering, feature linkages, and cost and time
dependencies. The findings thereby lend support to the earlier
identified importance of single-project issues at the portfolio
level (Martinsuo and Lehtonen, 2007) and draw attention to
identifying and understanding micro-level uncertainties from
the portfolio perspective.
In the second research question our interest was to understand
how managers frame or label the uncertainties, in their use of
uncertainty-related information. Due to the increased information
processing requirements in uncertain contexts (Galbraith, 1973),
we assumed that managers' interpretive processes in terms of
labeling might have an impact on how they respond to
uncertainties. Uncertainty holds presumably a negative connota-
tion among the managers (e.g. Lechler et al., 2012) and it is not a
surprise that the uncertainties were labeled more often as threats
than neutrally or as opportunities (see labeling in Dutton and
Jackson, 1987). This finding offers new insight into the
management of project portfolios regarding the need to
complement the use of information on known risks by using
uncertainty information on opportunities and threats to enhance
the business possibilities from R&D (see e.g. Lechler et al.,
2012). Also, the results offer empirical evidence from project
portfolio management context to extend the overall idea of
Jackson and Dutton (1988) concerning the threat bias regarding
the strategic issues managers face. We propose that uncertainties
in project portfolios can be considered as strategic issues whose
framing is an important step in managers' sensemaking and
decision process. The findings are clearly in line with those by
Plambeck (2012) who argued that individual perceptions affect
labeling the issues as opportunities and threats. Moreover, there
were different framings under each category of different sources
of uncertainties. As such, the results portray uncertainties as
strategic issues that portfolio managers need to deal with and
learn to manage.
For research question three we explored the managers'
strategies to respond to the uncertainties, using a tentative
framework of rational, structural and power-based/cultural
743
controls as a starting point. Although the rational, strategically
oriented controls dominated in interviewees' experiences, also
cultural and structural means for managing portfolio uncer-
tainties were identified by many managers. In an earlier study,
Petit (2012) explored managers' activities in “sensing, seizing
and reconfiguring” as well as “transforming” as the ways to
deal with uncertainties and thereby centered on information use
and rational and structural mechanisms for portfolio-related
uncertainty management. As a complement to previous
research, this study highlights the cultural, value-based
mechanisms that are needed and may be more difficult to
define as part of formalized portfolio management systems.
Such mechanisms can be used in prioritization, learning and
leadership in complex situations stemming particularly from
external and single-project uncertainties. Thereby, the findings
offer empirical evidence on the conceptual ideas of Geraldi
(2008) and Martinsuo (2013) who promote the idea of
supplementing rational portfolio management mechanisms
with structural and political systems and the empirical results
of Gutiérrez and Magnusson (2014). The findings also have a
connection to strategic management literature (Allaire and
Firsirotu, 1989) and portray context-dependent project portfolio
management potentially as a multi-dimensional dynamic
capability (e.g. Killen and Hunt, 2010; Killen et al., 2008).
As a key result, we have revealed the connections from the
sources of uncertainties with their labels to the specific means
used in controlling them. Dutton's and Jackson's (1987)
association between the control over the strategic issues and
framing them as opportunities and threats calls for further
examination of the identified controls and related framing of the
uncertainties. The results have shown that a majority of
identified uncertainties among managers' experiences (threats,
in particular) were not linked with specific means to manage
them. Instead, managers discussed specific rational, structural
and cultural–political controls in association with only a
minority of the identified uncertainties (opportunities, in
particular). It appears that organizations may be well equipped
with their strategic planning systems, policies and procedures to
respond to the opportunities and neutral uncertainties emerging
from the environment, organization and single projects, but less
equipped to improvise with unknown unknowns (e.g. Jerbrant
and Gustavsson, 2013) and transform the threats they see into
beneficial opportunities (see also Lechler et al., 2012). If
uncertainty is merely explored from an organizational angle, its
management may falsely be tied with information availability
and use. Particularly with environmental uncertainties it is
likely that information is not available and other than rational
mechanisms need to be identified.
On the other hand, it is possible that the association between
controls and uncertainties is the other way around. The
existence or awareness of a control mechanism for a given
source of uncertainty affects managerial cognition and thus
enables the framing of that uncertainty more easily as an
opportunity. This interpretation is line with the idea that the
existence of long-range planning tools, for instance, can help
managers to identify opportunities from the environment and
organization. It may be more difficult to specify tools and
744 M. Martinsuo et al. / International Journal of Project Management 32 (2014) 732–746
practices for value-based social control or structural reconfig-
uration, which might be needed in case of environment or
project-based uncertainties labeled as threats.
5.2. Towards project portfolio management as negotiated and
structural uncertainty coordination
As further results of the extensive analysis from 28
managers' interviews, we draw attention to three major issues
in managing R&D project portfolios. Firstly, the thorough
mapping of managers' experiences of uncertainties, their
labeling and control practice contribute by revealing the
individual level logics through which uncertainty management
takes place. As previous research has largely explored the
company-level perspective in general (e.g. Engwall and
Jerbrant, 2003; Petit, 2012; Petit and Hobbs, 2010) and treated
uncertainty as a control variable moderating the relationship
between project portfolio management practice and perfor-
mance in particular (Müller et al., 2008; Teller et al., 2012;
Voss and Kock, 2013), this study draws attention to the way in
which managers use uncertainty information in their work and,
possibly, take action based on it. In a recent empirical study,
Gutierrez and Magnusson (2014), based on a qualitative study
with three companies, showed the higher acceptance of rational
decision making mechanisms, revealed the need for other
mechanisms in conditions of uncertain information, and
showed four practical mechanisms managers use to legitimize
the non-rational decision making mechanisms. They suggested
further research in supporting dynamic decision making in
organizations. As a contribution, our results offer a logically
structured analysis frame for studying managers' justifications
and activities of reconfiguring and improvising based on
uncertainties (cf. Jerbrant and Gustavsson, 2013; Petit, 2012).
Secondly, the study has an important contribution to the recent
call for understanding the context-dependent practice of project
portfolio management (e.g. Martinsuo, 2013) particularly during
project portfolio deployment. If previous project portfolio
frameworks have centered largely on the portfolio selection and
resource allocation as well as later, formal decision making
(Archer and Ghasemzadeh, 1999a; Cooper et al., 2001; Dye and
Pennypacker, 1999), our overall idea was to look into emerging
issues in the portfolio in events and episodes between the decision
making points (proposed by Martinsuo, 2013). The results
showed the threat bias in the identified issues and low degree of
respective managerial mechanisms, which can be considered a
portfolio-centered contribution to earlier propositions regarding
uncertainties, their labeling and management (Dutton and
Jackson, 1987; Jackson and Dutton, 1988; Lechler et al., 2012).
Although structural reconfiguration is already seen as a valid and
relevant mechanism of project portfolio management (Martinsuo,
2013; Petit, 2012), our findings highlight new opportunities
with cultural and political controls and show that managers
are not necessarily well equipped to initiate reconfigurations or
value-based negotiations in their work.
Thirdly, this research has a contribution to the ongoing
discussion about project portfolio management as a dynamic
capability (e.g. Killen and Hunt, 2010; Killen et al., 2008,
2012; Petit, 2012). Our findings have shown that managers
filter information from the broader business environment to
R&D project portfolios from three quite different directions
(environment, organization, single projects). However, the
strategic and project portfolio management system of the
organizations (particularly the rational mechanisms of control,
but also structural) either help manage such uncertainties that
managers perceive as opportunities or direct managers'
attention to manageable uncertainties. At least in the experi-
ences of our informants, competences and routines associated
with the management of perceived threats (forms of cultural
and political controls) were much less easy to identify and
discuss. There may be alternative explanations for this, ranging
from the division of responsibilities between the functional
organization and project organization in uncertainty manage-
ment, the actual competences of portfolio managers, and the
level at which the threats are managed in the organization. The
finding among the ten studied companies is that the capacity to
influence the organization through project portfolio manage-
ment may still be limited to the project portfolio selection
phase, i.e., resource allocation. Stronger and more varied other
forms of influence would be needed during project portfolio
deployment, to make project portfolio management into a
dynamic capability. Naturally, further research is needed to
offer further evidence on this proposition.
6. Conclusions
6.1. Contribution
The key contribution of this paper is new knowledge on the
practice of project portfolio management in uncertain, dynamic
conditions. The evidence from interviews in ten R&D
portfolios portrays project portfolio management as an arena
for environmental, organizational and project-based uncer-
tainties, calling for managers' information search and attention.
As a result, we have unveiled the whole chain from the sources
of portfolio uncertainty to the managerial labeling of those
uncertainties and to the consequences and taken control actions
because of them. The developed conceptual framework of
uncertainties and their management offers a logical structure
that can be used also in further research, to map managers'
views of project portfolio related uncertainty and its manage-
ment. The framing of the uncertainties as opportunities and
threats plays a significant role both in identifying different
sources of uncertainties and in taking actions in response to
them.
Even if companies cannot know or avoid all their uncer-
tainties, managers may employ versatile controls as means to
learn from, limit and affect the uncertainties. We explored the
rational, structural and power-based/cultural controls that man-
agers use to manage uncertainties and, thereby, contributed by
offering empirical evidence to previous conceptual frameworks,
particularly at the level of project portfolios. We identified both a
threat-bias in uncertainty identification and a low degree of
control over the uncertainties, which implies that the practice of
project portfolio management may need further improvements
 M. Martinsuo et al. / International Journal of Project Management 32 (2014) 732–746
particularly after the portfolio selection and resource allocation
phase. Especially the reconfigurational and cultural–political
(value-based) dimensions of project portfolio management will
deserve further attention, to activate uncertainty management at
the level of the portfolio.
In terms of managerial implications, this study highlights a
variety of strategic and operative issues that are not accounted for,
if project portfolio management is treated merely as a device for
project prioritization and selection and resource allocation.
During project portfolio deployment, various organizational,
environmental and project-based uncertainties emerge and
require managers' attention. Managers need to be aware of the
power of their interpretations, when they make sense of such
uncertainties. Our study suggests that the labeling of uncertainty
issues into threats, neutral and opportunities may guide the choice
of control mechanisms and, thereby, have a significant role in
uncertainty management. By paying attention to the uncertainties
and developing not only rational but also structural and cultural–
political mechanisms for their management, managers can
become more skilled and influential in their project portfolio
management practice. Due to managers' different interpretations
of the uncertainties, some degree of negotiation is needed, when
managers consider their responses to uncertainty issues. Togeth-
er, managers could have possibilities to try and find better ways to
control uncertainties, particularly those that are considered as
threats. The actual performance of project portfolios is a
consequence of priorities and choices in the beginning, and
various reactive, anticipatory and improvisation capabilities as
responses to events inside and outside the portfolio.
6.2. Limitations and ideas for further research
We used a qualitative research strategy and provided
information about the co-occurrence of the perceived project
portfolio uncertainties and the means used for managing them.
Interview data from ten companies and multiple informants in
many of them were used to increase the validity of the results. A
coherent interview outline, full interview transcripts, a transpar-
ent and systematic coding approach, and co-author confirmatory
checks of analysis results were used, to improve the credibility of
the findings. As limitations, we acknowledge the bias towards
machine manufacturing firms' R&D, experienced R&D man-
agers, and medium to large portfolios. Also, the single country
context can be considered a limitation, although the companies
are international and deliver R&D results to foreign manufactur-
ing facilities besides their home country.
Many project portfolio mechanisms attempt to formalize
project selection and certainties in the most critical decision
making events, whereas changes between the decision making
events have been poorly taken into account so far. Risk
management tools and systems used at the single project level
may also contribute to portfolio-level issues, but such interplay
is not, yet, fully understood. Our study raises these as well as
other new issues for further studies. For example, forthcoming
studies could track the frequency of different types of
uncertainties across different types of portfolios (or industries),
to prepare such portfolio management methodologies that
745
would fit the degree of uncertainty. Quantitative studies are
suggested, to enable the testing of the preliminary findings in
this study. Similarly, the perspectives of managers in different
positions (portfolio managers, project managers, business
managers) should be explored, to help relevant competences
in their different duties. Also, a more detailed exploration of
different control mechanisms for uncertainty management is
needed, to shed light on the need to activate the use of cultural
and structural controls in tackling portfolio-related threats.
As this study highlighted the information processing perspec-
tive to project portfolio uncertainty management, further research is
encouraged on other aspects and phases in managers' interpretive
processes, than just the individual-level framing of uncertainties. In
order for portfolio managers to understand the logics through
which certain uncertainties and their consequences unfold,
forthcoming research should possibly track the more detailed
cause and effect chains of selected a few uncertainties in product
development portfolios. This attained knowledge could ideally be
connected to the framing of the uncertainties. As the interdepen-
dences between and the scope and hierarchical structure of
uncertainties were not examined in this study, further research is
needed to better understand the interrelations and dynamics within
portfolio uncertainties and their management. The social processes
of sensemaking in identifying and managing portfolio-related
uncertainties could also deserve research attention. Finally, since
current frameworks account for the local organizational context
only, increased knowledge about external and project-based
uncertainties in project portfolios should be used to develop more
context-aware frameworks for estimating and promoting success in
project portfolio management.
Acknowledgements
The authors wish to thank the Editor and the three
anonymous reviewers for their insightful comments regarding
the manuscript. The research projects resulting in this paper
have been funded by the Centre for Technology and Innovation
in Finland (TEKES) and the Academy of Finland, and their
support is here acknowledged. The authors also wish to thank
the target companies' managers for the fruitful interviews.
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