The portfolio planning, implementing, and governing process: An inductive approach

Portfolio management has long been viewed as a major source of competitive differentiation in technology-intensive organizations with substantial R&D investment. Yet, little work has addressed how portfolio management unfolds. Furthermore, the extant work has largely conceptualized the portfolio management process in a deductive manner, offering limited propositions for understanding the inner workings of portfolio management in real-world settings. Drawing on an inductive, qualitative study of nine cases in the electrical machinery, medical device, and pharmaceutical sectors, our work opens the black box of portfolio planning, implementing, and controlling process in practice. We find that organizations manage portfolios through five interdependent phases (ecosystem surveillance, portfolio strategy development, business case management, portfolio decision-making, and new product/service management), with four distinct actors (corporate, top management, portfolio management, and portfolio management governance functions) being actively engaged in different phases. Our study also established three main levers that shape the portfolio management process in practice (governance, integration, and information). Based on these findings, implications for portfolio management studies and practices are discussed.

Automated summary

This study, based on qualitative research in the electrical machinery, medical device, and pharmaceutical sectors, reveals the five phases of portfolio management process and the four actors involved. It also identifies three levers that shape the portfolio management process. Implications for portfolio management studies and practices are discussed based on these findings.