Tutorial 02 Questions with Possible Solutions

1. The chapter suggests that a definition of strategic management includes four components:
a). Developing a strategic vision and sense of mission; b). Formulating, implementing, and
evaluating; c). Cross-functional decisions; d). Achieving objectives
Discuss how each of these four elements is important in understanding the challenge of
strategic project management. How do projects serve to allow an organization to realize
each of these four components of strategic management?

Strategic management involves a complex system of establishing a vision, formulating strategies,

and achieving objectives. Strategic management decisions are unique to each company—strategy
for one company may be in exact opposition to strategies of another. Due to this, there is no
predetermined “best way” to implement project management in every organization. Given the
variety of corporate size and organization, the main challenge of strategic project management is
figuring out how to best implement project management within the specific organizational
structure of each company.

While it may at first seem difficult to successful integrate project management into an
organization, its presence in a corporation may enable effective execution of strategy and
objectives. To begin with, projects may be designed around and driven by priorities and objectives
derived from corporate mission and vision statements. Beyond the overreaching guidelines of a
mission or vision, projects may be used to implement specific strategic initiatives quickly and
effectively. Also, by breaking objectives down into projects, progress may be more easily
monitored by management.

Another aspect of strategic management is that it involves input and resources from various
departments throughout the organization. Project teams enable the company to create cross-
functional working groups that transcend organizational structure and allow for interdepartmental
cooperation. All of the above-mentioned aspects of strategic project management permit
organizations to break objectives and strategies into manageable pieces that can be focused on
accomplishing specific objectives.

2. Discuss the difference between organizational objectives and strategies.

Organizational objectives are broader than strategies in that they are derived from the company
mission or vision and establish what the company desires to accomplish. On the other hand,
strategies are more specific ideas that outline how the company plans to realize these objectives.

3. Your company is planning to construct a nuclear power plant in Suva. Why is stakeholder
analysis important as a precondition of the decision of whether or not to follow through with
such a plan? Conduct a stakeholder analysis for a planned upgrade to a successful software
product. Who are the key stakeholders?

In the case of building a nuclear plant, stakeholders can not only cause disruptions in the planning
and construction, but can altogether block the project from being completed. Very powerful
government, environmental, legal, and community stakeholders may intervene in the creation of
the plant. Performing a stakeholder analysis could identify potential obstacles and stakeholder
objections to building the plant. By identifying these obstacles in advance, it may be possible to
prevent them. If prevention is not possible, assessing them beforehand may allow management
time to create an alternate plan prior to resources being invested in the current project.
 Key stakeholders in a software upgrade would include suppliers, competitors, project team
members, top and functional management and clients. Suppliers of the software would be
influential in successful implementation and maintenance of the system. In the event of successful
implementation, competitors would be affected by potential loss of market share. In the event of
a failure, competitors would not only possibly gain new business, but may also learn from the
shortcomings of the project and avoid such mistakes for themselves. Project team members would
have direct impact on the success of the upgrade and as such would also stand to reap benefits or
detriments from the outcome. Top management may be evaluated on the outcome of the project
and may feel significant pressure to see that the project is a success. Ultimately, clients would
stand to gain from a successful implementation in the areas of faster transactions or better service,
and so on (depending on the type of software).

4. Consider a medium-sized company that has decided to begin using project management in
a wide variety of its operations. As part of their operational shift, they are going to adopt a
project management office somewhere within the organization. Make an argument for the
type of PMO it should adopt (weather station, control tower, or resource pool). What are
some of the key decision criteria that will help it determine which model makes most sense?

The company should adopt a control tower PMO. Since widespread project management is new
to the organizational structure, the control tower will offer it the necessary monitoring (sets
standards) and maintenance (improvements and problem solving) for a successful transition into
a project organization. It will provide support for employees and will help to focus on
improvement and problem solving as the company works through the stages of implementing
project management. When determining which model is best for the organization, it is important
to consider the structure and size of the current organization, the role of projects within the
company, resources available to the PMO and the chain of command.

5. What are some of the key organizational elements that can affect the development and
maintenance of a supportive organizational culture? As a consultant, what advice would
you give to a functional organization that was seeking to move from an old, adversarial
culture, where the various departments actively resisted helping one another, to one that
encourages project thinking and cross-functional cooperation?

The key elements that affect a supportive organizational culture are departmental interaction,
employee commitment, project planning, and performance evaluation systems. Departmental
interaction can create supportive relationships between functional and project managers. It
promotes information sharing and increasing likelihood of project success. Employee
commitment to goals is important in keeping workers motivated. When employees feel personally
committed to company goals, they are willing to work harder (and possibly longer), which leads
to success. When planning out resource constraints for a project, it is important to create trust and
understanding among managers and employees. Managers are often responsible for approving
use of resources from their department and also consult on time requirements for specific tasks.
If managers are made an active part of the planning process, they are more willing to allocate
resources and give accurate forecasts of time. Workers also need to feel as though they will not
be punished if time frames are not met (as long as this is not a persistent problem), otherwise they
(or their managers) may exaggerate the forecasted amount of time to complete a task. Finally, a
performance evaluation criterion needs to encourage initiative and risk taking in a project
environment. Additionally, rewards need to be consistent with the goals of the project.

A functional organization that desires to move from an adversarial culture to a supportive,

interactive one needs to consider several factors. First, the company should begin by establishing
a corporate-wide vision that aims at uniting and motivating workers. Next, they have to create a
reward/punishment system in line with that vision. Lastly, they will need to establish
 unambiguous policies on (short) lines of authority and communication. This will help provide fast
and efficient decision-making.

6. Compare and contrast the organizational cultures at Amazon and Google. Imagine if you
were in charge of a project team at both companies. How might your approach to managing
a project, developing your team, and coordinating with different functional departments
differ at the two firms?

In order to answer this question meaningfully, students have to do some research on the differences
in the cultures between the two companies, as reported in the popular press and websites.
Generalizing, Amazon is noted for a much more fast-paced and individualistic—even cut-throat—
environment. Google emphasizes the power of teams, creativity, independent thinking, and having
fun. These characteristics can be used to illustrate how a project would be organized, staffed, how
team members would be rewarded for good performance, and so forth. The key is for students to
first make a defensible argument for how they would characterize these companies’ cultures and
how they would distinguish between them. From these ideas, the means to manage a project would
naturally follow.

7. Suppose you change from a functional structure to a project structure and now wanted to convert
to the matrix structure, emphasizing dual commitments to function and project.
a. Re-create the structural design to show how the matrix would look.
b. What behavioral problems could you begin to anticipate through this design? That is, do you
see any potential points of friction in the dual hierarchy setup?

Answer to a: The conversion of the structure to a matrix is straightforward and involves the
addition of a “project” organization along the left side of the structure design. Then, the student
could indicate a couple of examples of projects (e.g., “A” and “B”) and how the project managers
would link with the functional heads to secure their needed resources. The key is for students to
recognize the joint responsibility for project staffing between the project manager and the
functional manager.

Answer to b: One of the best responses here is recognizing that the balancing of resources between
functional department and project will require negotiation and bargaining between the project
manager and the functional department head. This is especially the case in “balanced” or “weak”
matrix structures, where the project manager may have minimal power to actually get their
required resources and must use negotiation, influence, and perhaps the power of connections and
using “bargaining chips” to help secure their resources. As the textbook notes, matrix is a constant
source of friction between department heads, who want to keep their resources working on their
own tasks, and project managers, who are seeking to gain access to these resources to support
projects. The people often caught in the middle are the resources themselves: being pulled in
multiple directions.