Project Management Strategy

Chapter 2
The Organizational Context:
Strategy, Structure, and Culture

By
Dr. Doaa Saleh
Project Management Strategy

Project Management Software

• Managing time
• Managing people and resources
• Managing costs

2-2
Project Management Strategy

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
– Cross functional decisions
– Achieving objectives
2-3
Project Management Strategy

Projects and Organizational Strategy

 Projects Reflect Strategy

 Projects are stepping stones of corporate
strategy
 The firm’s strategic development is a driving
force behind project development

2-4
Project Management Strategy

Projects and Organizational Strategy

Mission

Objectives

Strategy Goals Programs

Fig. 2.1: Relationship of Strategic Elements

2-5
Project Management Strategy

Strategic Management Process Stages

• Strategy Formulation

• Strategy Implementation

• Strategy Evaluation
Strategy Formulation

Vision & Mission

External Opportunities & Threats

Internal Strengths & Weaknesses

Long-Term Objectives

Alternative Strategies

Strategy Selection
Strategy Implementation

Annual Objectives

Policies Invention

Employee Motivation

Resource Allocation
Strategy Evaluation Activities

Internal Review

External Review

Performance Measurement

Corrective Action

Strategy evaluation is needed because success today is no

guarantee of success tomorrow!

2-9
Vision and Mission Statements

Vision Statement –
What do we want to become?

Mission Statement –
What is our business?

2-10
 Vision & Mission

• Vision is a possible and desirable future

state of an organization that includes
specific goals.
• Mission is more associated with behavior
and the present.

2-11
 Vision & Mission
• Great benefits can be achieved if an
organization
– Systematically revisits their vision and
mission statement
– Treats them as living documents
– Considers them to be an integral part of
the firm’s culture
Vision & Mission

 Profit & vision are necessary to

effectively motivate a workforce

 Shared vision creates a commonality

of interests
Characteristics of Mission Statement
What to be included

Products or
Customers Services Markets

Employees Technology
Mission
Components

Survival,
Public
Growth,
Image
Profits
Self-Concept Philosophy
Project Management Strategy

Stakeholder Management

• One way to understand the relationship of project

managers and their projects to the rest of the
organization is through employing stakeholder
analysis.

• Stakeholder analysis is a useful tool for

demonstrating some of the seemingly irresolvable
conflicts that occur through the planned creation
and introduction of any new project.

2-15
Project Management Strategy

Stakeholder Management

 Stakeholders are all individuals or groups who have an active

stake in the project and can potentially impact, either
positively or negatively, its development.

 Sets of project stakeholders include:

Internal Stakeholders External Stakeholders
1. Top management 1. Clients
2. Accountant 2. Competitors
3. Other functional managers 3. Suppliers
4. Project team members 4. Environmental, political,
consumer, and other intervenor
groups
2-16
Project Management Strategy

Stakeholder Management
Parent
Organization
Other External
Functional Environment
Managers

Clients Project Top

Manager Management

Project
Accountant Team

Figure 2.3: Project Stakeholder Relationships 2-17

Project Management Strategy

Stakeholder Management

Project managers and their companies need to recognize

the importance of stakeholder groups through the
following six steps:
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
2-18
Project Management Strategy

Stakeholder Management
(1)
Identify
stakeholders
(7) (2)
Implement Gather information
stakeholder on stakeholders
management
strategy
(3)
(6) Identify
Predict stakeholders’
stakeholder mission
behavior
(4)
(5) Determine
Identify stakeholder
stakeholder strengths and
strategy weaknesses

Fig. 2.4: Project Stakeholder Management Cycle

Project Management Strategy
Organizational Structure

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. Includes design of systems to ensure
 effective communication
 coordination
 integration across departments
2-20
Project Management Strategy
Organizational Structure
• Forms of Organizational Structure include the
following:
1. Functional organizations—Companies are structured by
grouping people performing similar activities into
departments.
2. Project organizations—Companies are structured by
grouping people into project teams on temporary
assignments.
3. Matrix organizations—Companies are structured by
creating a dual hierarchy in which functions and projects
have equal prominence.

2-21
Project Management Strategy

Functional Structures for Project Management

Strengths Weaknesses
1. Firm’s design maintained 1. Functional siloing makes it difficult
to achieve cross-functional
2. Enables the development of in- cooperation.
depth knowledge and intellectual 2. Lack of customer focus
capital.
3. Projects may take longer
3. Standard career paths
4. Projects may be suboptimized due
4. Project team members remain to varying interest or commitment
connected with their functional across functional boundaries.
group
2-22
 Project Management Strategy
Project Structures for Project Management

Strengths Weaknesses
1. Assigns authority solely to the 1. Setting up and maintaining teams
project manager can be expensive.
2. Leads to improved communication 2. Potential for project team members
across the organization and among to develop loyalty to the project
functional groups. rather than to the overall
organization.
3. Effective decision-making
3. No pool of specific knowledge
4. Creation of project management
experts 4. Workers unassigned at project end

5. Rapid response 2-23

Project Management Strategy
Matrix Structures for Project Management

Strengths Weaknesses
1. Suited to dynamic environments 1. Dual hierarchies mean two
bosses
2. Equal emphasis on project
management and functional 2. Requires significant time to be
efficiency spent negotiating the sharing of
critical resources between
3. Promotes coordination across projects and departments.
functional units
3. Workers caught between
4. Maximizes scarce resources competing project & functional
demands

2-24
Project Management Strategy

Heavyweight Project Organizations

 Organizations can sometimes gain tremendous benefit from

creating a fully-dedicated project organization.

 The heavyweight project organization concept is based on the

notion that successful project organizations do not happen by
chance or luck.

 Lockheed Corporation’s “Skunkworks”

1. Project manager authority expanded
2. Functional alignment abandoned in favor of market opportunism
3. Focus on external customer

2-25
Project Management Strategy
Project Management Offices

• PMO is a centralized units that oversee or improve the

management of projects

• PMOs can be defined as a resource center for project

management within a company:
1. Technical details
2. Expertise
3. Repository
4. Center for excellence

2-26
Project Management Strategy

Forms of PMOs

PMOs have been described as operating under one of

three alternative forms and purposes in 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.

2-27