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Project Management En

Project Management En

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C HAP I E
R O tO
- ~
. . \u2022 ." - 0 - - : : : . \u2022 .
,
:
. .; ; . ~
. ~
P r o je c t
M anagem ent:
A
S tr a te g ic
A sset?
~ K A M
J U G D E V ,
P H D ,
PM P,
C E N T E R
FO R
IN N O V A T IV E
M A N A G E M E N T ,
A T H A B A S C A
U N IV E R S IT Y
W HAT
I S
S T R A T E G Y ?
" W in n in g
is n 't
e v e ry th in g ,
i t 's
th e
o n ly
th in g ."
-V in ce
L om bardi
(1 9 1 3 -1 9 7 0 )
" S tra te g y
is a quest
fo r p ro fit.'"
D e v e lo p in g
a n d
s u s ta in in g
a
c o m p e titiv e
a d v a n ta g e
is a b o u t
w in n in g
in th e m a rk e tp la c e
a n d
w in n in g
in the
m a rk e tp la c e
is a b o u t
im p ro v e d
com pany
p e r\ue000
fo rm a n c e
as m easured
in fin a n c ia l
term s.
I n
th e
ever m ore
c o m p e titiv e
m a rk e tp la c e ,
c o m p a n ie s
m ust
d e liv e r
g re a te r
v a lu e
t o
custom ers.
T he
s tru g g le
to gain
a n d
s u s ta in
c o m p e titiv e
a d v a n ta g e
w arran ts
th a t c o m p a n ie s
d e v e lo p
c e rta in
re s o u rc e
b u n d le s
th a t a re fu n d a m e n ta l
t o
f i r m
p erfo rm \ue000
a n c e .
M ore
o fte n
th a n
n o t, th e s e
a s s e ts
a re
know ledge-based
a s
o p p o s e d
to p h y s ic a l
a s s e ts ,
s u c h
a s p ro p e rty
a n d
te c h n o lo g y ,
o r
fin a n c ia l
re s o u rc e s .
T he
R esource-B ased
V iew
e x a m in e s
com \ue000
p e titiv e
a d v a n ta g e
in term s
o f a c o m p a n y 's
in te rn a l
a s s e ts .
In c re a s in g ly ,
c o m p a n ie s
a re tu rn in g
to p ro je c t
m anagem ent
a s
p a rt o f th e ir b u s in e s s
s tra te g y
a n d
p ro je c t
m anagem ent
c a n
b e
v ie w e d
a s a b u n d le
o f u n iq u e
know ledge-based
a s s e ts .
S u c c e s s fu l
p ro je c ts
c o n trib u te
t o
b u s in e s s
perform ance,
a n d
th is c a n
tra n s la te
in to
im p ro v e d
c h a n c e s
of firm
s u rv iv a l.
P ro je c t
m anagem ent
has not been
e x te n s iv e ly
s tu d ie d
u s in g
th e
s tra te g y
le n s ,
a n d
th e
d im e n s io n s
o f th e
m e ta -c a p a b ility
rem ain
to b e u n d e rs to o d .
T h is
is an
im p o rta n t
to p ic
b e c a u s e
i t
w ill help
us understand
th e fa c e ts
o f p ro je c t
m anagem ent
th a t
c o n trib u te
to a c o m p e titiv e
a d v a n ta g e
s o
th a t c o m p a n ie s
c a n
in v e s t
in the
a p p ro p ria te
p ra c tic e s
a n d
d e v e lo p
th o s e
in te rn a l
a s s e ts
re le v a n t
to p o s itio n in g
p ro je c t
m anagem ent
s tra te g ic a lly .
? f1 C 1
B a c k g ro u n d
in fo rm a tio n :
A
L o o k
B a c k
a t S tra te g y
G rein er,
B h a m b ri,
a n d
C u m m in g s
id e n tifie d
s e v e n
p e rio d s
i n
th e h is to ry
of strategic
m a n a g e m e n t.'
1. 1940s:
B u d g e t
e x tr a p o la tio n
a n d fin a n c ia l
g o a ls .
In th is d e c a d e ,
s tra te g ic
p la n s
c o n s is te d
o f fin a n c ia l
f o r e c a s ts .
2 .1 9 5O s: Long-range
p la n n in g
a n d fo r m a l
m odels.
D e ta ile d ,
to p -d o w n
fo rm al
s tra te \ue000
g ic p la n s
a d d re s s e d
b u s in e s s
s tra te g y .
3. 1960s:
B u s in e s s
id e a
a n d
c o r p o r a te
id e n tity .
T he
c o n c e p t
of a strengths,
w eak\ue000
n e s s e s ,
o p p o rtu n itie s ,
a n d
th re a ts
(S W O T )
a n a ly s is
a n d
c o rp o ra te
id e n tity
to o k
c e n te r
s ta g e
a s c o m p a n ie s
p o n d e re d
w hat
b u s in e s s
th e y
s h o u ld
b e in .
4. 1970s:
C o m p e titiv e
a d v a n ta g e
a n a ly tic s .
A n a ly tic
m atrices
s u c h
as scenario
p la n \ue000
n in g ,
e x p e rie n c e
c u rv e s ,
a n d
g ro w th
s h a r e
m atrices
em erged
a s c o m p a n ie s
fo c u s e d
o n
s tra te g ic
m anagem ent
to o ls
a n d
te c h n iq u e s .
5. 1980s:
S tr a te g y
im p le m e n ta tio n ,
c a p a b ility ,
a n d
a lig n m e n t.
D is illu s io n m e n t
w ith
e a rlie r
s tra te g ic
p la n n in g
p ra c tic e s
s e t in a s s tu d ie s
show ed
th a t in d u s try
fa c to rs
w ere
n o t
a b le
t o
fu lly
a c c o u n t
for inter-firm
p ro fit
d iffe re n tia ls .
C o m p a n ie s
h lrn e d
to the
R esource
B ased
V ie w
o f th e
f i r m
a n d
e x a m in e d
s tra te g y
in the
c o n te x t
o f th e
firm 's
in te rn a l
a s s e ts .
6. 1990s:
S tr a te g ic
le a d e r s h ip
a n d
r e e n g in e e r in g .
I n
th is e ra , s tra te g ic
m anagem ent
w as
e m b o d ie d
in the
C h ie f E x e c u tiv e
O fficer
a s th e
h e ro ic
le a d e r.
7. 2000:
C o n tin u o u s
s tr a te g ic
renew al.
S tra te g ic
m anagem ent
is a b o u t
hum an
c a p ita l,
k n o w le d g e
m a n a g e m e n t,
a n d
o rg a n iz a tio n a l
le a rn in g .
M in tz b e rg 's
1 9 9 8
b o o k
S tr a te g y
S a fa r i:
A
G u id e d
Tour Through
th e
W ild s o f
S tr a te g ic
M anagem ent
is an
in te re s tin g
re a d
o n
th e v a rio u s
s c h o o ls
o f th o u g h t
o n
s tra te g y
o v e r th e
y e a rs 3
In h is b o o k , M in tz b e rg
d e s c rib e s
th e s e
s c h o o ls
o f th o u g h t
a b o u t
s tra te g y :
~ D esign
s c h o o l-s tra te g y
is a process
o f c o n c e p tio n .
~ P la n n in g
s c h o o l-s tra te g y
fo rm atio n
is a form al
p ro c e s s .
~
P o s itio n in g
s c h o o l-s tra te g y
fo rm atio n
is an
a n a ly tic a l
p ro c e s s .
~
E n tre p re n e u ria l
s c h o o l-s tra te g y
fo rm atio n
is a v is io n a ry
p ro c e s s .
~ C o g n itiv e
s c h o o l-s tra te g y
fo rm atio n
is a m ental
p ro c e s s .
~ L e a rn in g
s c h o o l-s tra te g y
fo rm atio n
is an
em ergent
p ro c e s s .
~ Power
s c h o o l-s tra te g y
fo rm atio n
is a process
o f n e g o tia tio n .
~ C u ltu ra l
s c h o o l-s tra te g y
fo rm atio n
is a co11ective process.
~ E n v iro n m e n ta l
s c h o o l-s tra te g y
fo rm atio n
is a reactive
p ro c e s s .
~ C o n fig u ra tio n a l
s c h o o l-s tra te g y
fo rm atio n
is a process
o f tra n s fo rm a tio n .
S tra te g y
is not just
o n e
o f th e a b o v e
s c h o o ls
b u t a b le n d
o f th e m .
G rein er,
B h a m b ri,
a n d
C u m m in g s
o ffe r
a good
s y n o p s is
of strategic
m a n a g e m e n t:
2 7 0
THE AMA
H A N D B O O K
OF PROJECT MANAGEMENT, SECOND
E D IT IO N
~ S tra te g ic
m anagem ent
is c o m p re h e n s iv e
a n d
in te g ra tiv e .
~ A ll m ajor
b u s in e s s
d is c ip lin e s
a re
re le v a n t
to strategy.
~ S tra te g ic
th in k in g
a n d
b e h a v io r
are very
d y n a m ic .
~ S tra te g y
is a c o n s ta n t
s e a r c h
fo r a c o m p e titiv e
e d g e
w ith
h ig h
re tu rn s.
~
E v e ry
f i r m
is in d e e d
u n iq u e
in its strategic
c a p a b ilitie s .
~ T h e
firm 's
s tra te g y
a n d
o rg a n iz a tio n a l
c o n te x t
m ust
a lig n
a n d
re in fo rc e
e a c h
o th e r.
~ S tra te g ic
m anagem ent
re q u ire s
s p o n ta n e o u s
th in k in g
a n d
d o in g .
J > S tra te g ic
c h a n g e
w ill h a p p e n
fre q u e n tly .
M in tz b e rg
in tro d u c e d
us to the
fiv e
Ps of strategy
w hereby
s tra te g y
is a p la n , p a tte rn ,
p o s itio n ,
p e rs p e c tiv e ,
a n d
ploy. W hereas
M in tz b e rg
fa v o rs
th e
c o n c e p t
o f " c ra ftin g "
s tra te g y
as an art, others,
s u c h
a s G ra n t,
s u p p o rt
a m ore
system atic
a n d
a n a ly tic
a p p ro a c h
w hereby
s tra te g y
h e lp s
c o m p a n ie s
m ake
d e c is io n s ;
it is a process
fo r c o o rd in a tio n
a n d
c o m m u n ic a tio n ,
a n d
it in v o lv e s
a ta rg e t
(v is io n ):
It is clear
th a t s tra te g y
is a d y n a m ic
a n d
m u lti-fa c e te d
c o n c e p t.
S tra te g y
is n o t a b o u t
c le a r-c u t
answ ers.
S tra te g y
is m ore
a b o u t
u n d e r s ta n d in g
w hat
is h a p p e n in g
in the
in te r\ue000
nal and
e x te rn a l
e n v iro n m e n t
to b e tte r
g r a s p
th e
is s u e s
a n d
c o m p le x itie s
th a t im p a c t
a
com pany.
T h e s e
d iffe re n t
p e rs p e c tiv e s
o n s tra te g y
w ill
h e lp
re a d e rs
re fin e
th e ir u n d e r\ue000
s ta n d in g
of business
s tra te g y -th e
to p ic
o fh o w
c o m p a n ie s
c o m p e te .
B A S IC
P R E M IS E : C O M P E T IT IV E
C O N V E R G E N C E
A N D
C O M P E T IT IV E
A D V A N T A G E
B o th
fo rm ally
a n d
in fo rm a lly , c o m p a n ie s
c o n d u c t
internal assessm ents
(s tre n g th s
and weak\ue000
n e s s e s )
a n d e n v iro n m e n ta l
assessm ents
(o p p o rtu n itie s
a n d
th re a ts )
to p la n th e ir m a rk e t p o s i\ue000
tio n s a n d s tra te g ie s .
F irm s
are prim arily
in te re s te d
in im p ro v in g
fin a n c ia l
re tu rn s
and share\ue000
h o ld e r
v a lu e to a v o id
s itu a tio n s
o f c o m p e titiv e
c o n v e rg e n c e
o r p a rity
(w h ere
no one
f i r m
h a s a d is tin c t a d v a n ta g e ).
C o m p e titiv e
c o n v e rg e n c e
ta k e s
p la c e
w hen
c o m p a n ie s
try to do
s im ila r a c tiv itie s
as their rivals w ith
s o m e v a ria tio n s
in p ra c tic e .
C om m on
s tra te g ie s
in c lu d e
o p e ra tio n a l
e ffe c tiv e n e s s
p ra c tic e s ,
s u c h a s q u a lity
im p ro v e m e n t,
e m p o w e rm e n t,
a n d o u t\ue000
s o u rc in g
p ra c tic e s .
T h e s e
p ra c tic e s
are a basic requirem ent
of firm
s u rv iv a l,
b u t th e y d o n o t
lead to a sustained
c o m p e titiv e
a d v a n ta g e ,
though, because
a fte r a w h ile ,
firm s look alike
a n d d o th e s a m e th in g s , a n d th is le a d s to d im in is h in g
re tu rn s.
In contrast,
h a v in g
a c o m p e ti\ue000
tiv e a d v a n ta g e
refers to doing
d iffe re n t
a c tiv itie s
rro m
riv a ls
o r sim ilar
a c tiv itie s
d iffe re n tly .
A
c o m p e titiv e
a d v a n ta g e
c o n n o te s
in n o v a tio n ,
a d a p ta tio n ,
a n d
c re a tiv ity .
W o rld w id e ,
firm s
a re
tu rn in g
to p ro je c t
m anagem ent
as part of business
p ra c tic e .
T h is
is e v id e n t
in the
e x p o n e n tia l
in c re a s e
of m em bership
in p ro je c t
m anagem ent
a s s o c i\ue000
a tio n s ,
s u c h
a s th e
P ro je c t
M anagem ent
In s titu te ,
a s w e ll
a s in th e b illio n s
o f d o lla rs
b e in g
in v e s te d
in projects.
P rio r c h a p te rs
o f th is b o o k
h a v e
e x a m in e d
p ro je c t
m anage\ue000
m ent
in th e c o n te x t
o f th e
P iv fB O J {\u00ae
G u id e
k n o w le d g e
a re a s . A lth o u g h
ta n g ib le
re s o u rc e s
e n a b le
a com pany
to e x e c u te
its b u s in e s s
p r o c e s s e s ,
it is th e in ta n g ib le
o n e s -s u c h
a s p ro j\ue000
ect m anagem ent
e x p e rtis e -th a t
are m ore
lik e ly
to be sources
o f c o m p e titiv e
a d v a n ta g e .s
H ow ever, at present, the project m anagem ent
lite ra tu re e m p h a s iz e s
ta n g ib le a n d c o d ifie d
p ra c tic e s . In th e 1 9 7 0 s a n d
1 9 8 0 s , th e lite ra tu re fo c u s e d o n v a rio u s to o ls a n d te c h n iq u e s (s o ft\ue000
w are, w ork breakdow n
structures, Program
E v a lu a tio n
a n d R e v ie w
Techniques, design-to-cost,
lifecyc1e costing, risk m anagem ent, cost and schedule control, and control system s). A review
o f
P R O JE C T
M A N A G E M E N T :
A
S T R A T E G IC
A S S E T ?
2 7 1

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