C2 -the_organizational_context_-_strategy_structure_and_culture


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C2 -the_organizational_context_-_strategy_structure_and_culture

  1. 1. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-1
  2. 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 Hall 2-2
  3. 3. Projects Reflect Strategy Projects are stepping stones of corporate strategy The firm’s strategic development is a driving force behind project development Some examples include: A firm wishing to… may have a project redevelop products or processes, to reengineer products or processes. change strategic direction or product portfolio configuration, to create new product lines. improve cross-organizational communication & efficiency to install an enterprise IT system. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-3
  4. 4. Relationship of Strategic Elements Mission Objectives Strategy Goals Programs Fig 2.1 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-4
  5. 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 Stakeholders External Stakeholders • • • • • • • • Top management Accountant Other functional managers Project team members Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-5 Clients Competitors Suppliers Environmental, political, consumer, and other intervenor groups
  6. 6. Project Stakeholder Relationships Parent Organization External Environment Other Functional Managers Project Clients Top Management Manager Project Fig 2.3 Accountant Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Team 2-6
  7. 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 solutions 6. Test and refine the solutions Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-7
  8. 8. Project Stakeholder Management Cycle Identify Stakeholders Implement Stakeholder Management Strategy Predict Stakeholder Behavior Fig 2.4 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Gather Information on Stakeholders Project Management Team Identify Stakeholder Determine Strategy Stakeholder Strengths & Weaknesses 2-8 Identify Stakeholders’ Mission
  9. 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 organization 3. Design of systems for – effective communication – coordination – integration across departments Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-9
  10. 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 Hall 2-10
  11. 11. Functional Structures for Project Management Strengths Weaknesses 1. Firm’s design maintained 1. Functional siloing 2. Fosters development of indepth knowledge 2. Lack of customer focus 3. Standard career paths 3. Projects may take longer 4. Project team members remain 4. Projects may be sub-optimized connected with their functional group Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-11
  12. 12. Project Structures for Project Management Strengths Weaknesses 1. Project manager sole authority 1. Expensive to set up and maintain teams 2. Improved communication 3. Effective decision-making 4. Creation of project management experts 5. Rapid response Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2. Chance of loyalty to the project rather than the firm 3. No pool of specific knowledge 4. Workers unassigned at project end 2-12
  13. 13. 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 efficiency 2. Negotiation required in order to share resources 3. Promotes coordination across functional units 3. Workers caught between competing project & functional demands 4. Maximizes scarce resources Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-13
  14. 14. 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 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-14
  15. 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 Hall 2-15
  16. 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 Hall 2-16
  17. 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 incidents Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-17
  18. 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 Hall 2-18
  19. 19. Culture Affects Project Management • Departmental interaction • Employee commitment to goals • Project planning • Performance evaluation Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-19
  20. 20. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-20
  21. 21. STAKEHOLDER MANAGEMENT • Important discipline that successful people use to win support from others. • It helps them ensure that their projects succeed
  23. 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. 24. STEPS IN STAKEHOLDER ANALYSIS.. • Identifying your stakeholders. • Prioritizing your stakeholders • Understanding your key stakeholders After you created a stakeholder map, you can use the stakeholder planning tool to plan how you will communicate with each stakeholder.
  25. 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. 26. • Communicate stakeholders early and often with – 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. 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. 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. 29. High Keep Satisfied Manage Closely Low Power Monitor Low Keep informed Interest High
  30. 30. UNDERSTANDING YOUR STAKEHOLDERS 1. 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.
  32. 32. 2. Plan Your Management Approach to Stakeholder – 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. 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. 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. 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. 36. Booz Allen User
  37. 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. 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 project’s success.
  39. 39. Functional Organizations FIGURE 3.1
  40. 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. 41. Project Management Structures (cont’d) • 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. 42. Dedicated Project Team FIGURE 3.2
  43. 43. Project Organization: Dedicated Team • Advantages • Disadvantages – Simple – Expensive – Fast – Internal Strife – Cohesive – Limited Technological Expertise – Cross-Functional Integration – Difficult Post-Project Transition
  44. 44. Project Organizational Structure FIGURE 3.3
  45. 45. Project Management Structures (cont’d) • 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. 46. Matrix Organization Structure FIGURE 3.4
  47. 47. Division of Project Manager and Functional Manager Responsibilities in a Matrix Structure Project Manager Negotiated Issues Functional Manager What 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. 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. 49. Project Organization: Matrix Form • Advantages – Efficient – Strong Project Focus – Easier Post-Project Transition – Flexible • Disadvantages – Dysfunctional Conflict – Infighting – Stressful – Slow
  50. 50. Rated Effectiveness of Different Project Structures by Type of Project Source: 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. 51. Choosing the Appropriate Project Management Structure • Organization (Form) Considerations – How important is the project to the firm’s success? – What percentage of core work involves projects? – What level of resources (human and physical) are available?
  52. 52. Choosing the Appropriate Project Management Structure (cont’d) • 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. 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. 54. Key Dimensions Defining an Organization’s Culture FIGURE 3.6
  55. 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. 56. Organizational Culture Diagnosis Worksheet FIGURE 3.7
  57. 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 project’s clients or customer organizations – Interacting with other organizations connected to the project
  58. 58. Cultural Dimensions of an Organization Supportive of Project Management FIGURE 3.8
  59. 59. Key Terms Balanced matrix Dedicated project team Strong matrix Matrix Organizational culture Weak matrix Projectitis Projectized organization
  60. 60. Organization of Product Development Projects at ORION FIGURE C3.1
  61. 61. Traditional Master Plan at ORION FIGURE C3.2
  62. 62. Proposed Project Organization for the Jaguar Project FIGURE C3.3
  63. 63. Jaguar Master Plan FIGURE C3.4
  64. 64. Mechanisms for Sustaining Organizational Culture FIGURE A3.1
  65. 65. References 1. Organization Structure & Culture. http://www.csun.edu/ 1. The Stakeholder Management Concept. www.business.utah.edu Booz Allen User