Discussion and responses (executing the project)

Chapter2.TheOrganizationalContextStrategyStructureandCulture.pptx

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Project Management: Achieving Competitive Advantage

Fifth Edition

Chapter 2

The Organizational Context: Strategy, Structure, and Culture

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Learning Objectives (1 of 2)

2.1 Understand how effective project management contributes to achieving strategic objectives.

2.2 Recognize three components of the corporate strategy model: formulation, implementation, and evaluation.

2.3 See the importance of identifying critical project stakeholders and managing them within the context of project development.

2.4 Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Learning Objectives (2 of 2)

2.5 Identify the characteristics of three forms of a project management office (P M O).

2.6 Understand key concepts of corporate culture and how cultures are formed.

P M B o K Core Concepts

Project Management Body of Knowledge (P M B o K) covered in this chapter includes:

Project Procurement Management (P M B o K 12)

Identify Stakeholders (P M B o K 13.1)

Plan Stakeholder Management (P M B o K 13.2)

Manage Stakeholder Engagement (P M B o K 13.3)

Organizational Influences on Project Management (P M B o K 2.1)

Organizational Structures (P M B o K 2.1.3)

Organizational Cultures and Styles (P M B o K 2.1.1)

Enterprise Environmental Factors (P M B o K 2.1.5)

Projects and Organizational Strategy

Strategic management—the science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives.

Consists of:

Developing vision and mission statements

Formulating, implementing, and evaluating

Making cross-functional decisions

Achieving objectives

Table 2.1 Projects Reflect Strategy

Strategy	Project
Technical or operating initiatives (such as new distribution strategies or decentralized plant operations)	Construction of new plants or modernization of facilities
Development of products for greater market penetration and acceptance	New product development projects
New business processes for greater streamlining and efficiency	Reengineering projects
Changes in strategic direction or product portfolio reconfiguration	New product lines
Creation of new strategic alliances	Negotiation with supply chain members (including suppliers and distributors)
Matching or improving on competitors’ products and services	Reverse engineering projects
Improvement of cross-organizational communication and efficiency in supply chain relationships	Enterprise I T efforts
Promotion of cross-functional interaction, streamlining of new product or service introduction, and improvement of departmental coordination	Concurrent engineering projects

Figure 2.2 T O W S Matrix

Stakeholder Management

Stakeholder analysis is a useful tool for demonstrating some of the seemingly irresolvable conflicts that occur through the planned creation and introduction of new projects.

Project stakeholders are defined as all individuals or groups who have an active stake in the project and can potentially impact, either positively or negatively, its development.

Identifying Project Stakeholders

Internal Stakeholders

Top management

Accountant

Other functional managers

Project team members

External Stakeholders

Clients

Competitors

Suppliers

Environmental, political, consumer, and other intervener groups

Figure 2.3 Project Stakeholder Relationships

Managing Stakeholders

Assess the environment.

Identify the goals of the principal actors.

Assess your own capabilities.

Define the problem.

Develop solutions.

Test and refine the solutions.

Organizational Structure

Consists of three key elements:

Designates formal reporting relationships

number of levels in the hierarchy

span of control

Identifies groupings of

individuals into departments

departments into the total organization

Design of systems to ensure

effective communication

coordination

integration across departments

Forms of Organization Structure

Functional organizations—group people performing similar activities into departments

Project organizations—group people into project teams on temporary assignments

Matrix organizations—create a dual hierarchy in which functions and projects have equal prominence

Figure 2.4 Example of a Functional Organizational Structure

Table 2.2 Strengths and Weaknesses of Functional Structures

Strengths for Project Management	Weaknesses for Project Management
1. Projects developed within basic functional structure require no disruption or change to firm’s design.	1. Functional siloing makes it difficult to achieve cross-functional cooperation.
2. Enables development of in-depth knowledge and intellectual capital.	2. Lack of customer focus.
3. Allows for standard career paths.	3. Longer time to complete projects.
Blank	4. Varying interest or commitment.

Figure 2.6 Example of a Project Organizational Structure

Table 2.3 Strengths and Weaknesses of Project Structures

Strengths for Project Management	Weaknesses for Project Management
1. Project manager sole authority	1. Expensive to set up and maintain teams
2. Improved communication	2. Chance of loyalty to the project rather than the firm
3. Effective decision making	3. Difficult to maintain a pooled supply of intellectual capital
4. Creation of project management experts	4. Team member concern about future once project ends
5. Rapid response to market opportunities	Blank

Figure 2.7 Example of a Matrix Organizational Structure

Table 2.4 Strengths and Weaknesses of Matrix Structures

Strengths for Project Management	Weaknesses for Project Management
1. Suited to dynamic environments	1. Dual hierarchies mean two bosses
2. Equal emphasis on project management and functional efficiency	2. Negotiation required in order to share resources
3. Promotes coordination across functional units	3. Workers caught between competing project and functional demands
4. Maximizes scarce resources	Blank

Heavyweight Project Organizations

Organizations can sometimes gain tremendous benefit from creating a fully dedicated project organization.

Lockheed Corporation’s “Skunkworks”

Project manager authority expanded

Functional alignment abandoned in favor of market opportunism

Focus on external customer

Figure 2.8 Managers’ Perceptions of Effectiveness of Various Structures on Project Success

Project Management Offices

Centralized units that oversee or improve the management of projects

Resource centers for:

Technical details

Expertise

Repository

Center for excellence

Figure 2.9 Alternative Levels of Project Offices

Forms of P M O s and Control

Three forms of P M O s, varying with degrees of control and influence include:

Supportive—low control; consultative and provide P M resources and training

Controlling—moderate control; requires compliance to adopted P M standards/processes

Directive—high control; directly manages projects

Models of P M O s

In addition to the forms of P M O and varying levels of control, there are models of P M O s with various purposes for companies:

Weather station—monitoring and tracking

Control tower—project management is a skill to be protected and supported

Resource pool—maintain and provide a cadre of skilled project professionals

P M O Control Tower

Performs four functions:

Establishes standards for managing projects

Consults on how to follow these standards

Enforces the standards

Improves the standards

Organizational Culture

Unwritten

Rules of behavior

Held by some subset of the organization

Taught to all new members

Key Factors That Affect Culture Development

Technology

Environment

Geographical location

Reward systems

Rules and procedures

Key organizational members

Critical incidents

Organizational Culture: Effects on Project Management

Departmental interaction

Employee commitment to goals

Project planning

Performance evaluation

Summary (1 of 2)

Understand how effective project management contributes to achieving strategic objectives.

Recognize three components of the corporate strategy model: formulation, implementation, and evaluation.

See the importance of identifying critical project stakeholders and managing them within the context of project development.

Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects.

Summary (2 of 2)

Identify the characteristics of three forms of a project management office (P M O).

Understand key concepts of corporate culture and how cultures are formed.