Project Management

Lecture - 4

22 July 2010 Lecture 3 1

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
22 July 2010 Lecture 3 2
 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,
change strategic direction or product
portfolio configuration,
improve cross-organizational
communication & efficiency
to reengineer products or processes.
to create new product lines.
to install an enterprise IT system.

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 Relationship of Strategic
Elements

Mission

Objectives

Strategy Goals Programs

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 An example

22 July 2010 Lecture 3 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 • Clients
• Accountant • Competitors
• Other functional managers • Suppliers
• Project team members • Environmental, political, consumer,
and other intervenor groups
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 Project Stakeholder Relationships
Parent
Organization
Other External
Functional Environment
Managers

Project Top
Clients Management
Manager

Project
Fig 2.3 Accountant Team

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 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
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Project Stakeholder Management Cycle
Identify
Stakeholders

Implement Gather Information

Stakeholder on Stakeholders
Management
Strategy
Project
Management Team
Predict
Identify
Stakeholder
Stakeholders’
Behavior
Mission

Identify
Stakeholder Determine
Strategy Stakeholder
Strengths &
Weaknesses

22 July 2010 Lecture 3 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
22 July 2010 Lecture 3 10
elephantX dot com, inc Tony Gauvin
Technology Team VP of Software and
Operations

Bill Mattison Pro-tem Rick Cook

Linda Carbone
Operations Systems Software
QA Manager
Manager Manager Manager

Brett Guisinger Merv Newell Marc C+10 Val Maier

Wendy Beauvais Dan Sanville
Ops tech Senior Network Sr. Software Software Sr. Software
QA Engineer UNIX Admin
Engineer engineer Engineer Engineer

Matt Caron
Kim Gush
Op tech Adam Gage Software Mike Taldo
QA Engineer Scott DePonte
Software Engineer SR. Software
Network Engineer
Engineer Engineer

Name ATS team

Ops tech Otto Holland Matt Sheppard
QA Engineer Ron Hartlen
NT System Sr Software
DBA
Engineer engineer

Retail Team
Ops tech Kevin Rutledge
Jr Software
Gerry Pintal
Engineer
DBA

Production Support Team

Ops tech

22 July 2010 Lecture 3 11

 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
22 July 2010 Lecture 3 12
 Functional Structures for Project
Management
Strengths Weaknesses
1. Firm’s design maintained 1. Functional siloing

2. Fosters development of 2. Lack of customer focus

in-depth knowledge

3. Standard career paths 3. Projects may take longer

4. Project team members 4. Projects may be sub-

remain connected with optimized
their functional group
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 Functional organization

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 Project Structures for Project
Management
Strengths Weaknesses
1. Project manager sole 1. Expensive to set up and
authority maintain teams

2. Improved communication 2. Chance of loyalty to the

project rather than the firm
3. Effective decision-making
3. No pool of specific
4. Creation of project knowledge
management experts
4. Workers unassigned at
5. Rapid response project end
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 Project Structure

22 July 2010 Lecture 3 16

 Matrix Structures for Project
Management
Strengths Weaknesses
1. Suited to dynamic 1. Dual hierarchies mean
environments two bosses

2. Equal emphasis on project 2. Negotiation required in

management and order to share resources
functional efficiency

3. Promotes coordination 3. Workers caught between

across functional units competing project &
functional demands
4. Maximizes scarce
resources
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 Matrix Structure

22 July 2010 Lecture 3 18

 Matrix Organization
• Cross-functional & Project teams

22 July 2010 Lecture 3 19

 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
22 July 2010 Lecture 3 20
22 July 2010 Lecture 3 21
 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
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 Cultural Influences
• Technology
• Environment
• Geographical location
• Reward systems
• Rules and procedures
• Key organizational members
• Critical incidents
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Culture Affects Project Management

• Departmental interaction

• Employee commitment to goals

• Project planning

• Performance evaluation

22 July 2010 Lecture 3 24

 Case….
• Rolls Royce

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