This document discusses the importance of project managers understanding an organization's strategic management process. It outlines the strategic management process, which includes reviewing the organizational mission, analyzing and formulating strategies, setting objectives to achieve strategies, and implementing strategies through projects. The strategic management process ensures projects are aligned with strategy and provides focus on the organization's future direction. Understanding this process helps project managers make better decisions about future projects and adjust current projects in response to changes in the organization's mission and strategy.

1. Copyright © 2014 McGraw-Hill Education.
AllRights Reserved.
PowerPointPresentationby Charlie Cook
CHAPTER TWO
ORGANIZATION
STARTEGY
&
PROJECT
SELECTION
LECTURE # 03

2. 1. The Strategic
Management
Process: An
Overview
2. The Need for a
Project Priority System
3. A Portfolio
Management System
4. Selection Criteria
5. Applying a Selection
Model
6. Managing the Portfolio
System
2–2
OUTLINE OF THE CHAPTER
LECTUER # 03

3. Why Project Managers Need to Understand
the Strategic Management Process
2–3
• Changes in the organization’s mission and
strategy
– Project managers must respond to changes with
appropriate decisions about future projects and
adjustments to current projects.
– Project managers who understand their
organization’s strategy can become effective
advocates of projects aligned with the firm’s mission.

4. 2–4
• Mistakes caused by not understanding the role of
projects in accomplishing strategy:
– Focusing on problems or solutions with low strategic priority.
– Focusing on the immediate customer rather than the whole
market place and value chain.
– Overemphasizing technology that results in projects that pursue
exotic technology that does not fit the strategy or customer need
– Trying to solve customer issues with a product or service rather
than focusing on the 20% with 80% of the value (Pareto’s Law).
– Engaging in a never-ending search for perfection only the
project team really cares about.
Project and Strategy

5. 2–5
Strategic Management is the process of
assessing “what we are” and deciding and
implementing “what we intend to be and how we
are going to get there.”
Strategy describes how an organization intends to
compete with the resources available in the
existing and perceived future environment.
Strategic Management Process Activities

6. 2–6
• Strategic Management
– Requires every project to be clearly linked to strategy.
– Provides theme and focus of firm’s future direction.
• Responding to changes intheexternalenvironment—
environmentalscanning
• Allocating scarce resources ofthefirmtoimproveits
competitiveposition—internalresponsestonewprograms
– Requires strong links among mission, goals,
objectives, strategy, and implementation.
Strategic Management Process Activities

7. 2–7
1. Review and define the organizational mission.
2. Analyze and formulate strategies
3. Set objectives to Achieve strategies.
4. Implement strategies through projects
The Strategic Management Process:
An Overview