INTERNATIONAL JOURNAL OF

PROJECT
MANAGEMENT
International Journal of Project Management 23 (2005) 366–373
www.elsevier.com/locate/

The influence of project autonomy on project success

a,*
Hans Georg Gemünden , Sören Salomo b, Axel Krieger c

a
Technical University of Berlin, Institute for Technology and Innovation Management, Straße des 17. Juni 135, H71, 10623 Berlin, Germany
b
University of Graz, Institute for Technology and Innovation Management, 8010 Graz, Austria
c
McKinsey & Company, Inc., Prinzregentenstr. 22, 80538 München, Germany

Abstract

In this article, we address the following research questions:

(1) What is project autonomy, how can it be measured, and how much autonomy is given in NPD projects?
(2) Does project autonomy increase with project innovativeness?
(3) Is project autonomy positively related to success of NPD projects?
(4) Does the positive relationship between project autonomy and project success increase with innovativeness of NDP projects?

Theses hypotheses are tested using a sample of 104 highly innovative NPD projects, gathered in the first wave of the research
project INNOVATION COMPASS. The results show that instruments which are advocated in the mainstream innovation
and venture management literature are more frequently used with increasing innovativeness. However, they do not increase suc-
cess of NPD projects, even not for highly innovative ones. Instruments derived from the organizational behavior tradition are not
used more often with increasing innovativeness, but they do significantly improve NPD project success, particularly for very inno-
vative ones. We conclude: Firms should not easily follow fashions, which are derived from prominent case studies. Rather, they
should also take into account possible negative consequences of the recommendations. Researchers should lay more stress in dis-
cussing and empirically analyzing negative effects of popular recommendations.
Ó 2005 Published by Elsevier Ltd and IPMA.

Keywords: Project autonomy; Project innovativeness; Success factors of projects

1. Project autonomy
Autonomy is a characteristic of a social system. The
word autonomy has a Greek origin and means indepen-
dent, free, self-governing, self-organizing, living accord-
ing to its own rules. It is an important characteristic of a
*
Corresponding author. Tel.: +49 30 314 26090; fax: +49 30 314
26089.
E-mail address: hans.gemuenden@tim.tu-berlin.de (H.G. Gemün-
den).
sovereign state which has the right for self-organizing its
rules.
A social system will have autonomy if it has (1) Goal-
defining autonomy: the authority to set its own goals and
their ordering; (2) Structural autonomy: its own social
identity and boundaries to other social systems; (3) Re-
source autonomy: resources to fulfill its tasks and survive
until the task is completed; and (4) Social autonomy:
freedom for self-organizing the behavior of its members,
including possibilities for its members to interact with
each other.

0263-7863/$30.00 Ó 2005 Published by Elsevier Ltd and IPMA.

doi:10.1016/j.ijproman.2005.03.004
 H.G. Gemünden et al. / International Journal of Project Management 23 (2005) 366–373
1.1. Ad (1) Goal-defining autonomy
Project organizations usually do not have (full)
autonomy to define their goals. The definition of project
goals is usually the right of the project owner(s) and
other powerful stakeholders, particularly the project
customers. Project leaders may have an influence on
project goals in the decision process for setting up a pro-
ject. Even after the formal start, goals are not fully gi-
ven, rather they have to be learned and clarified
during the process, particularly, for highly innovative
ventures [25]. In this process, project leaders and project
members can further influence goal changes. The extent
of such a goal-defining autonomy is hard to measure; di-
rect questions will probably not solve the problem.
Therefore we have not tried to do so in our interview
study.
1.2. Ad (2) Structural autonomy
The issue of structural autonomy is intensively dis-
cussed in the project management (PM) and venture
management (VM) literature.
PM literature offers several organization forms like
staff PM, matrix PM, and pure PM as intra-organiza-
tional solutions, and multi-organizational enterprises,
as an inter-organizational solution for ‘‘giant’’ projects
with several organizations as project owners [25,40].
These forms mainly differ in the authority given to
the project leader. Several surveys [22,23,36–
38,41,42,45], show: Increasing a project leaderÕs author-
ity often has a positive impact on project success,
because compared to task requirements and power bases
of permanent line managers the authority of project
managers is often not sufficient.
VM literature recommends that highly innovative
projects should be separated from the routine organiza-
tion and located in special innovation units [6–15,
18,19,29]. For critical views see [4,35]. Typical project
organization arrangements, which are set up within
the R&D departments of the divisions, may not be suf-
ficient to cope with highly innovative ventures which
are of strategic importance for the corporation even if
they have a full-time project manager and a dedicated
team:
1. The divisions will not engage in new ventures which
threaten the performance of their actual cash cows.
Therefore, projects with a high cannibalization
potential of existing core products should also be
located in separated units.
2. The divisions have short-term orientations and not
enough resources. Even if they start an innovative
venture, they will soon postpone it if budget cuts
are made, or powerful customers need development
resources.
367
3. Most innovation projects are designed as R&D-pro-
jects, with the emphasis on new technologies. How-
ever, if completely new markets or new business
models have to be addressed, then an innovation pro-
ject dominated by R&D managers will not be suffi-
cient. Therefore, special units which also have the
dedicated mission to build up new marketing forces
are needed.
4. The fourth argument applies for so called ‘‘white ele-
phant’’ projects. Drawing on case studies, the venture
management literature argues, that highly innovative
ventures which do not fit well with the strategy of a
single business unit, but may have a large potential
for the whole corporation, will sorted be out very
early, so that they will not even become a small exper-
imental project documenting customer value and
technical feasibility.
1.3. Ad (3) Resource autonomy
Structural autonomy is a necessary but not a suffi-
cient condition for project success. Projects need suffi-
cient resources in order to survive until they have
completed their task. Insufficient resources have been
documented in nearly all studies which have addressed
this variable [3,17,21,22,30,39]. A variety of different re-
sources can be distinguished; the most important ones
are financial, intellectual, experience, social, and market
capital.
1.4. Ad (4) Social autonomy
Social autonomy is reduced in this paper to the aspect
of locational autonomy. Innovation teams vary in terms
of team membersÕ proximity, i.e., the degree to which all
team members are in direct vicinity over the duration
of the project. With the globalization of firms and in-
ter-firm networks, and the growing share of electronic
communication, ‘‘virtual’’ teams have become a com-
monplace in modern project work. Although new tech-
nologies may enable and support communication
which would otherwise not be possible or be much more
costly the co-location of teams still has several advanta-
ges. First, communication with team members in close
vicinity initiating personal communication requires less
effort. Second, decreasing proximity decreases the possi-
bility of spontaneous informal face-to-face communica-
tion. Non face-to-face communication (e.g., telephone,
email, etc.), however, is unlikely to provide the same le-
vel of ‘‘richness’’ because of the lack of non-verbal cues.
Third, important confidential information will only be
exchanged in face-to-face communications. Fourth,
teams which are co-located can be controlled and lead
more easily, there is less distraction by other superiors
who want to use team-members for other tasks.
368 H.G. Gemünden et al. / International Journal of Project Management 23 (2005) 366–373
Project Innovativeness
Project Autonomy
Structural Autonomy
Resource Autonomy
Locational Autonomy
Fig. 1. Research frame – autonomy, innovativeness and success.
Having conceptualized project autonomy, we are able
to formulate our research frame which is shown in Fig.
1.
2. Project innovativeness
Recent state-of-the-art reviews show that innovative-
ness is best understood as a multidimensional phenomenon
[2,5,16,20,24,28,43,44] relating to technology, market,
organizational change and environmental alterations.
The innovation is radical in the market dimension if
the innovation satisfies unsatisfied needs for the first
time. There is a quantum leap in customer value. The
new product may require considerable attitudinal and
behavioral changes, inducing customer inertia. A com-
pletely new market may be created. However, market
risk is also high; because large market investments are
needed, and many yet unknown competitors may also
enter.
The innovation can be called radical in the technolog-
ical dimension if the knowledge about the product archi-
tecture or its components significantly differs from
existing knowledge [1]. Existing knowledge often be-
comes obsolete. The innovation often relies on com-
pletely new technological principles, new architectures,
or new materials.
The innovativeness in the organizational dimensions
relates to the internal change of the innovating organiza-
tion. Changes may be required in strategy, structure,
processes competences, incentive systems, or culture.
Organizational innovativeness also refers to the (in)-
experience the company has in the field of the specific
innovation and to the organizational risks.
In addition to these dimensions, we suggest a fourth
dimension relating to environmental alterations, such as
the required establishment of a new infrastructure
Project
Success
(e.g., hydrogen filling stations), regulatory changes or
changes of value systems.
3. Hypotheses
3.1. Main effects of autonomy on innovation success
The TIM, PM and VM literature usually postulate a
positive influence of project autonomy on project suc-
cess. However, despite this generally favorable attitude,
the cost and risk associated with increasing levels of
autonomy are also articulated in a smaller fraction of
contributions. This leads us to our first general
hypothesis:
Hypothesis 1: Success of NPD projects will first in-
crease and then decrease with increasing levels of
autonomy.
We assume that this n-shaped relationship holds for
all four types of project autonomy, although the inflec-
tion points may occur at different levels of autonomy.
3.2. Interaction effects of autonomy and innovativeness on
innovation success
The basic question of our INNOVATION COM-
PASS research project is weather success factors that
have been found to discriminate between successful
and failed projects of low to medium degrees of innova-
tiveness also apply to projects with a high degree of
innovativeness. Under conditions of higher uncertain-
ties, more intensive learning processes are required.
The required processes of new knowledge generation re-
quire closer and longer cooperation of more diverse
teams, and more intensive cooperation with lead-users,
and lead-researchers outside the organization. There is
a higher uncertainty about know-who, know-what,
 H.G. Gemünden et al. / International Journal of Project Management 23 (2005) 366–373 369

and know-how. Thus, social, intellectual, and financial
capital has to be build up and exploited in flexible
way. Self-organization of the innovating actors has to
be enabled and supported. Structural autonomy appears
to be necessary in order to attach the innovators to a
high-ranked entrepreneur who can take the responsibil-
ity, and protect the innovation against bureaucratic bar-
riers of not being allowed to innovate. Resource
autonomy appears to be necessary in order to perform
feasibility studies, to build prototypes and experiment
with alternative designs. Locational autonomy appears
to be necessary that key innovators can work together
face-to-face in small groups, in order to intensively ex-
change with each other and build up a common problem
space, mutual trust, and identification with common
goals. We assume that these needs increase with the de-
gree of innovativeness. Therefore, we postulate the fol-
lowing hypothesis:
Hypothesis 2: The impact of project autonomy on
project success will increase with increasing levels of
project innovativeness.
4. Research design and measures
4.1. Data sources and sample
In order to secure that innovation projects with a
very high degree of innovativeness are included in our
sample, we took a stepwise approach: First, we asked
over 20 experts to point out specific technological areas
of strong research and advanced development activity
with great potential for radical innovations, and to iden-
tify leading industrial corporations. We then asked tried
to convince these corporations to participate in our
study. We contacted further industrial corporations
which had won prices because of their very innovative
NPD projects. In total, 276 companies were contacted
of which 104 agreed to participate in the survey with
one ongoing or recently market launched innovation
project. We focused the following five industries: auto-
motive (18.4%), assembly (28.2%), electronics (26.2%),
software (17.5%) and biotech (9.7%) – the majority
operating in a B2B environment. The sample included
companies of all sizes; 37.8% generate revenues of more
than 500 Mio Euro, 35% less than 50 Mio Euro, the
residual group in between.
Intensive separate personal interviews by a researcher
team of at least two interviewers with the technical
responsible and the marketing responsible of the project
were conducted in 2001 about their specific innovation
projects. One of them had to be the project leader. This
was usually a person with technical background.
4.2. Measures
4.2.1. Autonomy
Fig. 2 shows the dimensions of project autonomy
which have been measured in INNOVATION
COMPASS.
Organizational separation was measured an ordinal
scale with three levels: (1) project organization; (2) loca-
tion in a separate special unit within the organization;
(3) location outside the organization.
Reporting level of the project was measured with five
levels: (1) Supervisor; (2) Head of R&D; (3) Head of
Business Unit; (4) Venture Board; (5) Corporate Board.
Size of resource base includes several aspects:
1. extent of access to resources of the main organization
(‘‘full access’’);
2. extent of financial means (‘‘sufficiency’’);
3. extent of Integration of experts from functional units.

Project Autonomy

Structural Autonomy Resource Autonomy Social Autonomy

Organizational Separation Size of Resource Base Co-Location of Project Team

Reporting Level Freedom of Using Resources

Fig. 2. Dimensions of project autonomy in research project INNOVATION COMPASS.

370 H.G. Gemünden et al. / International Journal of Project Management 23 (2005) 366–373
Freedom of using resources measured the degrees of
freedom in using these resources.
All scales were measured with 7-point-rating-scales.
Locational autonomy was measured by a simple ques-
tion whether the team was co-located or not.
4.3. Project innovativeness
Project innovativeness was measured with the follow-
ing dimensions and items:
1. Market dimension
(a) creates totally new customer benefit;
(b) change in customer attitude and behavior needed;
(c) improvement of firmÕs market position;
(d) extent of market uncertainty at the beginning of
the three stages (average).
2. Technology dimension
(a) new technological principle;
(b) quantum leap in performance;
(c) squeeze out of existing technology;
(d) extent of technological uncertainty at the begin-
ning of the three stages (average).
3. Organizational dimension
(e) reorientation of corporate strategy;
(f) new organizational structure;
(g) new qualification of employees;
(h) fundamental change in corporate processes;
(i) few experience with new production processes and
equipment;
(j) major change of organizational culture;
(k) intensive cooperation with external partners;
(l) new financial need for project;
(m) major changes in value chain, some stages can be
eliminated.
4. Environmental dimension
(n) creation of a new infrastructure (e.g., filling sta-
tion for hydrogen);
(o) alterations in regulation required in order to
implement innovation;
(p) critical debate of innovation in society.
The scores of the four dimensions of innovativeness
were then calculated as the mean score of the respec-
tive items. The four dimensions only show moderate
positive correlations between 0.09 and 0.39. Therefore,
it makes sense to analyze four different moderator
effects.
4.4. Project success
Project success of different phases: For each stage per-
formance on the triple constraints time, budget, and
overall quality were assessed on Likert-scales. Success
of a stage is then calculated as the mean score of these
three items in the respective stage.
Project success of the traditional triple constraints:
For each criterion-time, budget, and quality-success is
calculated as the mean score of the up to three stage-
assessments.
Internal success: is calculated as the mean score of
technical success, competence gains, and meeting target
cost of the new product.
External success: is calculated as the mean score of
financial success, (expected) meeting of market shares,
image gain, and (expected) meeting of regulatory
requirements of the new product.
Respondents were always asked to evaluate project
performance on Likert-scales in relation to their specific
goals.
5. Results
5.1. Structural autonomy
Organizational separation is significantly positively
correlated with project innovativeness. Each of the four
dimensions shows a significant positive correlation with
organizational separation taking place in at least one of
the project stages. Firms appear to follow the propo-
nents of organizational separation, particularly in the
venture management literature which advocates for a
protection and support of development of new ventures.
How does structural autonomy influence success? Find-
ings for organizational separation document: there is
not a single significant correlation. Additional tests on
curvilinear relationship give the same finding: not a sin-
gle significant relationship.
Reporting level shows some significant correlations:
Attainment of time and budget goals is improved,
but the influence on quality goals is a negative one.
The short communication distance to senior manage-
ment may help to overcome administrative obstacles,
but there appears to be less time for the experts to
do things as the highly innovative task demands. A test
for curvilinear relationships did not show n-shaped
curves.
Hypothesis 2 postulates a positive moderator influ-
ence of project innovativeness. Our moderated regres-
sion analyses document: There is not a single
significant interaction term. Therefore, we may con-
clude: Organizational separation does not improve project
success, even not for highly innovative projects.
5.2. Resource autonomy
Resource autonomy usually does not show significant
correlations with the four dimensions of project innova-
tiveness. In particular, degree of integration of the
 H.G. Gemünden et al. / International Journal of Project Management 23 (2005) 366–373 371

Table 1 Table 2
Degree of organizational separation and project success (Pearson Co-location and project success (Pearson correlations)
correlations)
Co-location
Degree of organizational separation
Ba Phase I Phase II Phase III
Ba Phase I Phase II Phase III
Project success
Project success Phase I 0.216* 0.177
Phase I 0.086 0.039 Phase II 0.151 0.131 0.172
Phase II 0.061 0.037 0.034 Phase III 0.401* 0.229 0.314* 0.402*
Phase III 0.116 0.025 0.123 0.101
Quality 0.141 0.075 0.183 0.061
Quality 0.112 0.076 0.160 0.104 Time 0.252* 0.175 0.249* 0.311*
Time 0.090 0.023 0.092 0.027 Budget 0.215* 0.099 0.214* 0.231*
Budget 0.014 0.097 0.022 0.161
Internal 0.255* 0.117 0.277* 0.370*
Internal 0.108 0.027 0.116 0.088 External 0.041 0.050 0.065 0.141
External 0.007 0.155 0.030 0.010 *
Significance level of 5%.

various business functions is usually not related to inno-

vativeness. Autonomy in using resources significantly in-
creases with the degree of market and organizational
innovativeness (see Table 1).
Size of resources does not significantly increase pro-
ject success. There are some significant positive correla-
tions – like a positive influence of financial means in the
development and launch stage or access to (additional)
resources of the mother company – which contradict
this general finding, however, there are also some unex-
pected significant negative correlations, e.g., early inte-
gration of production specialists has a negative effect,
because they bring in too many constraints in the early
project stages. Therefore, we may conclude: size of the
resources is not the key success factor for highly innova-
tive ventures. If people from more business functions be-
come full-time members of the team, then this does not
necessarily increase project success.
Overall, degrees of freedom in using resources do not
generally significantly increase project success. There
are only some significant positive influences in the later
stages. There are no significant interaction terms with
the four degrees of innovativeness.
5.3. Locational autonomy
Locational autonomy was very high in our projects.
Most of them had co-located teams, and the frequency
of co-located teams did not change much during project
stages.
Co-location is not significantly related to any of the
project innovativeness dimensions.
Co-location has a significant positive influence on pro-
ject success. In particular, attainment of time and budget
goals is improved. Besides, internal project success
(technical success, competence gains, and meeting target
cost of the new product) is significantly increased
through co-location, and the effect on project success
is strongest in the last stage.
The impact of co-location on project success in-
creases with project innovativeness, particularly with
market and technological innovativeness. There is no
significant moderator effect for organizational and envi-
ronmental innovativeness of the project (see Table 2).
6. Discussion
It is interesting to see that the autonomy dimensions
which have been recommended in the TIM, PM and VM
literature like organizational separation, high reporting
level, and early integration of people from business func-
tions in cross-functional teams do not lead to signifi-
cantly higher project success. Only one variable which
comes from the organizational behavior tradition, i.e.,
co-location of teams, shows several significant positive
effects which increase with project innovativeness.
How can we explain our contradictory findings and in
doing this advance project theory?
A first answer is given by the theory itself. We have
postulated n-shaped relationships between project
autonomy and project success. Our descriptive findings
show that some autonomy variables, particularly re-
source autonomy and reporting level, have already
reached a high level. If all the projects have already
reached the possibly wide region near the optimum of
the n-shaped curve then these factors are necessary con-
ditions for innovation success, but they do not give any
competitive advantage. Innovation managers have to
look for other success factors if they want to outsmart
their competitors.
But this possible explanation does not explain why
we also find significant negative relationships with some
success variables, and it does not apply for all autonomy
constructs. In particular, organizational separation oc-
curs too seldom and too late that one could say an
‘‘optimal level’’ has been reached.
Why do these non-effects of organizational separation
and these strong effects of co-location occur?
The following reasons explain negative effects of orga-
nizational separation:
372 H.G. Gemünden et al. / International Journal of Project Management 23 (2005) 366–373
1. Separation creates new interfaces leading to commu-
nication problems and conflicts with existing units.
2. Access to complementary resources is more difficult
for separated units than for embedded units.
3. Failures of separated units become more and quicker
visible, there is a higher risk, particularly for radical
innovations, that projects are terminated or ‘‘frozen’’.
4. Disengagement from separated units is easier; middle
managers do not trust top-managers that they will
give long-term support to the radical innovation pro-
ject, particularly in times of poor overall company
results and budget cuts.
5. There are other reasons for organizational separation
than theory assumes. Separate units are implemented
because the existing organization is poorly managed,
and good managers create a new institution in order
to bypass the poorly managed ‘‘mother’’ organiza-
tion. Such a running-away strategy will not help in
the long run. As soon as the separated unit needs fur-
ther (complementary) resources from the ‘‘mother’’
organization, the management flaws will also hinder
the development of the separated organization. It is
then very likely that the good managers completely
leave the poorly managed firm, and not just move
into a separate organizational unit.
These arguments have to be tested in further investi-
gations. We have some evidence for the last argument:
Best-in-industry performing firms use organizational sep-
aration less often than poor performing firms. The latter
ones use it with increasing frequency as the projects de-
velop, particularly by using external units.
Let us take a look at co-location. Since we have mea-
sured this variable rather crudely, we assume that our
finding understates the real effects. Additional analyses
showed that co-location was significantly related to so-
cial autonomy, in terms of more mutual support, higher
willingness to take risks, higher openness for new ideas,
and higher self-responsibility. This is in line with other
publications documenting that team-work quality in-
creases with co-location, and showing a positive influ-
ence of co-location on project success, which increases
with project innovativeness [31–34].
Co-location thus turns out to be the more effective
than organizational separation. It is also a much more
flexible instrument, and it costs less than creating a
new organizational unit. Considering the risks of highly
innovative ventures, it appears to be better to invest a
smaller amount several times than to invest a large
sum only one time in order to increase the value of the
innovation portfolio. We advocate setting up small co-
located teams early on, which are fully dedicated to the
innovative task.
Although larger corporations have more resources to
do so, this advice is significantly less often followed in
large and mature corporations than in smaller and youn-
ger ones. It appears to be that mature large organizations
need a fundamental change of their innovation culture
and control systems, and delegate more responsibility
to innovation promotors in the middle management,
allowing them to set up more dedicated co-located inno-
vation teams early on.
Last, but not least, we want make a plea that innova-
tion management theory should become more innova-
tive, i.e., perform more rigid tests by using samples
with truly innovative projects, and by developing more
balanced theories which consider positive and negative
effects of ‘‘success’’ factors.
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