Lecture-2 ❑The Organizational Context: Strategy, Structure, and Culture
Rodney Naro-DBS-IT Section 1
3/18/2024 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 (PMO). 2.6 Understand key concepts of corporate culture and how cultures are formed. PMBoK Core Concepts Project Management Body of Knowledge (PMBoK) covered in this chapter includes: 1. Project Procurement Management (PMBoK 12) 2. Identify Stakeholders (PMBoK 13.1) 3. Plan Stakeholder Management (PMBoK 13.2) 4. Manage Stakeholder Engagement (PMBoK 13.3) 5. Organizational Influences on Project Management (PMBoK 2.1) 6. Organizational Structures (PMBoK 2.1.3) 7. Organizational Cultures and Styles (PMBoK 2.1.1) 8. Enterprise Environmental Factors (PMBoK 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 Construction of new plants or strategies or decentralized plant operations) modernization of facilities Development of products for greater market penetration and New product development projects acceptance New business processes for greater streamlining and efficiency Reengineering projects Changes in strategic direction or product portfolio New product lines reconfiguration 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 Enterprise IT efforts efficiency in supply chain relationships Promotion of cross-functional interaction, streamlining of new Concurrent engineering projects product or service introduction, and improvement of departmental coordination Figure 2.2 TOWS 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 External Stakeholders
• Top management • Clients • Accountant • Competitors • Other functional managers • Suppliers • Environmental, political, • Project team members consumer, and other intervener groups Figure 2.3 Project Stakeholder Relationships Managing Stakeholders 1. Assess the environment. 2. Identify the goals of the principal actors. 3. Assess your own capabilities. 4. Define the problem. 5. Develop solutions. 6. Test and refine the solutions. Organizational Structure Consists of three key elements: 1. Designates formal reporting relationships ➢ number of levels in the hierarchy ➢ span of control 2. Identifies groupings of ➢ individuals into departments ➢ departments into the total organization 3. 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 Weaknesses for Project Management Management 1. Projects developed within basic 1. Functional siloing makes it difficult to functional structure require no achieve cross-functional cooperation. disruption or change to firm’s design. 2. Enables development of in-depth 2. Lack of customer focus. knowledge and intellectual capital. 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 Weaknesses for Project Management 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 4. Team member concern about experts future once project ends 5. Rapid response to market Blank opportunities Figure 2.7 Example of a Matrix Organizational Structure Table 2.4 Strengths and Weaknesses of Matrix Structures Strengths for Weaknesses for Project Management Project Management 1. Suited to dynamic environments 1. Dual hierarchies mean two bosses 2. Equal emphasis on project 2. Negotiation required in management and functional efficiency order to share resources 3. Promotes coordination across 3. Workers caught between functional units 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 PMOs and Control Three forms of PMOs, varying with degrees of control and influence include: ❑ Supportive—low control; consultative and provide PM resources and training ❑ Controlling—moderate control; requires compliance to adopted PM standards/processes ❑ Directive—high control; directly manages projects Models of PMOs In addition to the forms of PMO and varying levels of control, there are models of PMOs 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 PMO 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) 1. Understand how effective project management contributes to achieving strategic objectives. 2. Recognize three components of the corporate strategy model: formulation, implementation, and evaluation. 3. See the importance of identifying critical project stakeholders and managing them within the context of project development. 4. Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects. Summary (2 of 2) 5. Identify the characteristics of three forms of a project management office (PMO). 6. Understand key concepts of corporate culture and how cultures are formed.
