1. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall2-1

2. 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 Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall2-2 3. Projects Reflect Strategy Projects are stepping stones of corporate strategyThe firms strategic development is a driving force behind project development Some examples include: A firm wishing tomay have a projectredevelop products or processes,to reengineer products or processes.change strategic direction or product portfolio configuration,to create new product lines.improve cross-organizational communication & efficiencyto install an enterprise IT system.Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall2-3 4. Relationship of Strategic Elements MissionObjectivesStrategyGoalsProgramsFig 2.1 Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall2-4 5. 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 StakeholdersExternal Stakeholders Top management Accountant Other functional managers Project team membersCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall2-5Clients Competitors Suppliers Environmental, political, consumer, and other intervenor groups 6. Project Stakeholder Relationships Parent Organization External EnvironmentOther Functional ManagersProjectClientsTop ManagementManagerProject Fig 2.3AccountantCopyright 2010 Pearson Education, Inc. Publishing as Prentice HallTeam 2-6 7. 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 solutions6. Test and refine the solutions Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall2-7 8. Project Stakeholder Management Cycle Identify Stakeholders Implement Stakeholder Management Strategy Predict Stakeholder BehaviorFig 2.4 Copyright 2010 Pearson Education, Inc. Publishing as Prentice HallGather Information on StakeholdersProject Management TeamIdentify Stakeholder Determine Strategy Stakeholder Strengths & Weaknesses2-8Identify Stakeholders Mission 9. Organizational Structure Consists of three key elements: 1. Designates formal reporting relationships number of levels in the hierarchy span of control 2. Groupings of: individuals into departments departments into the total organization3. Design of systems for effective communication coordination integration across departments Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall2-9 10. Forms of Organizational 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 Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall2-10 11. Functional Structures for Project Management StrengthsWeaknesses1. Firms design maintained1. Functional siloing2. Fosters development of indepth knowledge2. Lack of customer focus3. Standard career paths3. Projects may take longer4. Project team members remain 4. Projects may be sub-optimized connected with their functional groupCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall2-11 12. Project Structures for Project Management StrengthsWeaknesses1. Project manager sole authority 1. Expensive to set up and maintain teams2. Improved communication 3. Effective decision-making4. Creation of project management experts 5. Rapid response Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall2. Chance of loyalty to the project rather than the firm3. No pool of specific knowledge 4. Workers unassigned at project end2-12 13. Matrix Structures for Project Management StrengthsWeaknesses1. Suited to dynamic environments1. Dual hierarchies mean two bosses2. Equal emphasis on project management and functional efficiency2. Negotiation required in order to share resources3. Promotes coordination across functional units3. Workers caught between competing project & functional demands4. Maximizes scarce resources Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall2-13 14. Heavyweight Project Organizations Organizations can sometimes gain tremendous benefit from creating a fully-dedicated project organization Lockheed Corporations Skunkworks Project manager authority expanded Functional alignment abandoned in favor of market opportunism Focus on external customerCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall2-14 15. Project Management Offices Centralized units that oversee or improve the management of projects Resource centers for: Technical details offloaded from manager Expertise in project management skills Repository of lessons learned, documentation Center for project management Copyright excellence 2010 Pearson Education, Inc. Publishing as Prentice Hall2-15 16. Forms of PMOs 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 Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall2-16 17. Organizational Culture The unwritten rules of behavior, or norms that are used to shape and guide behavior, is shared by some subset of organization members and is taught to all new members of the company.Key factors that affect culture development Technology Environment Geographical location Reward systems Rules and procedures Key organizational members Critical incidentsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall2-17 18. Cultural Influences Technology Environment Geographical location Reward systems Rules and procedures Key organizational members Critical incidents Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall2-18 19. Culture Affects Project Management Departmental interaction Employee commitment to goals Project planning Performance evaluationCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall2-19 20. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall2-20 21. STAKEHOLDER MANAGEMENT Important discipline that successful people use to win support from others. It helps them ensure that their projects succeed 22. ELEMENTS OF STAKEHOLDER MANAGEMENT.. STAKEHOLDER ANALYSIS STAKEHOLDER PLANNING 23. STAKEHOLDER ANALYSIS The technique used to identify the key people who have to be won over. You then use Stakeholder Planning to build the support that helps you succeed 24. STEPS IN STAKEHOLDER ANALYSIS.. Identifying your stakeholders. Prioritizing your stakeholders Understanding your key stakeholdersAfter you created a stakeholder map, you can use the stakeholder planning tool to plan how you will communicate with each stakeholder. 25. BENEFITS Use the opinions of the most powerful stakeholders to shape your projects at an early stage. i.e the most experienced staff. It is more likely that they will support you, their input can also improve the quality of your project. Gaining support from powerful stakeholders can help you to win more resources .. 26. Communicate stakeholdersearlyandoftenwith ensure that they know what you are doing and fully understand the benefits of your project this means they can support you actively when necessary. You can anticipate what people's reaction to your project, and build into your plan the actions that will win people's support 27. IDENTIFYING YOUR STAKEHOLDERS 1st step (stakeholder analysis) brainstorm who your stakeholders are. Think of all the people who are affected by your work, who have influence or power over it, or have an interest in its successful or unsuccessful conclusion. For example: Engineers Marketing Executive Public Relations Officer Risk Management Officer 28. PRIORITIZE YOUR STAKEHOLDERS After getting the long list of names. Some of these may have the power either to block or advance it. Some may be interested in what you are doing, others may not care. Map out your stakeholders on a Power/Interest Grid and classify them by their power over your work and by their interest in your work. 29. High Keep SatisfiedManage CloselyLowPowerMonitorLowKeep informedInterestHigh 30. UNDERSTANDING YOUR STAKEHOLDERS1. You now need to know more about your key stakeholders. You need to know how they are likely to feel about and react to your project. You also need to know how best to engage them in your project and how best to communicate with them. 31. STAKEHOLDER COMMUNICATION WORKSHEET 32. 2.Plan Your ManagementApproachtoStakeholder allocate time depends on the size and difficulty of your projects and goals, the time you have available for communication the amount of help you need to achieve the results you want. Think through the help you need, the amount of time that will be taken to manage this and the time you will need for communication. Help with the project could include sponsorship of the project, advice and expert input, reviews of material to increase quality, etc. 33. 3. Think Through What You Want from Each Stakeholder Work through your list of stakeholders thinking through the levels of support you want from them and the roles you would like them to play (if any). Think through the actions you would like them to perform. Write this information down in the Desired Support, Desired Project Role and Actions Desired columns. 34. 4. Identify the Messages You Need to Convey: Identify the messages that you need to convey to your stakeholders to persuade them to support you and engage with your projects or goals. Typical messages will show the benefits to the person or organization of what you are doing, and will focus on key performance drivers like increasing profitability or delivering real improvements. 35. 5. Identify Actions and Communications: work out what you need to do to win and manage the support of these stakeholders. Focusing on the high-power/high-interest stakeholders first and the low-interest/low-power stakeholders last, devise a practical plan that communicates with people as effectively as possible and that communicates the right amount of information in a way that neither under nor over-communicates . 36. Booz Allen User 37. Project Management Structures Challenges to Organizing Projects The uniqueness and short duration of projects relative to ongoing longer-term organizational activities The multidisciplinary and cross-functional nature of projects creates authority and responsibility dilemmas. Choosing an Appropriate Project Management Structure The best system balances the needs of the project with the needs of the organization. 38. Project Management Structures Organizing Projects: Functional organization Different segments of the project are delegated to respective functional units. Coordination is maintained through normal management channels. Used when the interest of one functional area dominates the project or one functional area has a dominant interest in the projects success. 39. Functional OrganizationsFIGURE 3.1 40. Functional Organization of Projects Advantages No Structural Change Flexibility In-Depth Expertise Easy Post-Project Transition Disadvantages Lack of Focus Poor Integration Slow Lack of Ownership 41. Project Management Structures (contd) Organizing Projects: Dedicated Teams Teams operate as separate units under the leadership of a full-time project manager. In a projectized organization where projects are the dominant form of business, functional departments are responsible for providing support for its teams. 42. Dedicated Project TeamFIGURE 3.2 43. Project Organization: Dedicated Team Advantages Disadvantages Simple Expensive Fast Internal Strife Cohesive Limited Technological Expertise Cross-Functional Integration Difficult Post-Project Transition 44. Project Organizational StructureFIGURE 3.3 45. Project Management Structures (contd) Organizing Projects: Matrix Structure Hybrid organizational structure (matrix) is overlaid on the normal functional structure. Two chains of command (functional and project) Project participants report simultaneously to both functional and project managers. Matrix structure optimizes the use of resources. Allows for participation on multiple projects while performing normal functional duties Achieves a greater integration of expertise and project requirements 46. Matrix Organization StructureFIGURE 3.4 47. Division of Project Manager and Functional Manager Responsibilities in a Matrix Structure Project ManagerNegotiated IssuesFunctional ManagerWhat has to be done?Who will do the task?How will it be done?When should the task be done?Where will the task be done?How much money is available to do the task?Why will the task be done?How will the project involvement impact normal functional activities?How well has the total project been done?Is the task satisfactorily completed?How well has the functional input been integrated?TABLE 3.1 48. Different Matrix Forms Functional (also Weak or Lightweight) Form Matrices in which the authority of the functional manager predominates and the project manager has indirect authority Balance (or Middleweight) Form The traditional matrix form in which the project manager sets the overall plan and the functional manager determines how work to be done Strong (Heavyweight) Form Resembles a project team in which the project manager has broader control and functional departments act as subcontractors to the project 49. Project Organization: Matrix Form Advantages Efficient Strong Project Focus Easier Post-Project Transition Flexible Disadvantages Dysfunctional Conflict Infighting Stressful Slow 50. Rated Effectiveness of Different Project Structures by Type of ProjectSource: Larson, E. W., and Gobeli, D. H., Matrix Management: Contradictions and Insights, California Management Review, vol. 29, no. 4 (Summer 1987), p. 137.FIGURE 3.5 51. Choosing the Appropriate Project Management Structure Organization (Form) Considerations How important is the project to the firms success? What percentage of core work involves projects? What level of resources (human and physical) are available? 52. Choosing the Appropriate Project Management Structure (contd) Project Considerations Size of project Strategic importance Novelty and need for innovation Need for integration (number of departments involved) Environmental complexity (number of external interfaces) Budget and time constraints Stability of resource requirements 53. Organizational Culture Organizational Culture Defined A system of shared norms, beliefs, values, and assumptions which bind people together, thereby creating shared meanings The personality of the organization that sets it apart from other organizations. Provides a sense of identify to its members Helps legitimize the management system of the organization Clarifies and reinforces standards of behavior 54. Key Dimensions Defining an Organizations CultureFIGURE 3.6 55. Identifying Cultural Characteristics Study the physical characteristics of an organization. Read about the organization. Observe how people interact within the organization. Interpret stories and folklore surrounding the organization. 56. Organizational Culture Diagnosis WorksheetFIGURE 3.7 57. Implications of Organizational Culture for Organizing Projects Navigating Organizational Cultures: Working Upstream or Downstream? Interacting with the culture and subcultures of the parent organization Interacting with the projects clients or customer organizations Interacting with other organizations connected to the project 58. Cultural Dimensions of an Organization Supportive of Project ManagementFIGURE 3.8 59. Key Terms Balanced matrix Dedicated project team Strong matrix Matrix Organizational culture Weak matrix Projectitis Projectized organization 60. Organization of Product Development Projects at ORIONFIGURE C3.1 61. Traditional Master Plan at ORIONFIGURE C3.2 62. Proposed Project Organization for the Jaguar ProjectFIGURE C3.3 63. Jaguar Master PlanFIGURE C3.4 64. Mechanisms for Sustaining Organizational CultureFIGURE A3.1 65. References 1. Organization Structure & Culture. http://www.csun.edu/ 1. The Stakeholder Management Concept. www.business.utah.eduBooz Allen User