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CHAPTER 2: ORGANIZATION
UNIVERSITY OF FINANCE - MARKETING
FACULTY OF BUSINESS ADMINISTRATION STRATEGY AND PROJECT SELECTION

CHAPTER 2:
ORGANIZATION STRATEGY
AND PROJECT SELECTION

Course ID number: 010808

QUẢN TRỊ DỰ ÁN ĐẦU TƯ
Strategy is implemented through projects. Every significant
project should have a clear link to the organization’s strategy.
Lecturer: Dr. PHAM HAI CHIEN —Erik W. Larson—
January, 2024
Faculty of Business Administration
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LEARNING OBJECTIVES CHAPTER OUTLINE

1. Explain why it is important for project managers to 1. The Strategic Management Process: An Overview
understand their organization’s strategy.
2. The Need for a Project Priority System
2. Identify the significant role projects contribute to the
strategic direction of the organization. 3. A Portfolio Management System
3. Understand the need for a project priority system. 4. Selection Criteria
4. Apply financial and nonfinancial criteria to assess the
5. Applying a Selection Model
value of projects.
5. Understand how multi-criteria models can be used to 6. Managing the Portfolio System
select projects. 7. Summary
6. Apply an objective priority system to project selection.
7. Understand the need to manage the project portfolio.
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1. THE STRATEGIC MANAGEMENT PROCESS: 1. THE STRATEGIC MANAGEMENT PROCESS:

AN OVERVIEW AN OVERVIEW
mô hình
Strategic management is the process of assessing “what SWOT
we are” and deciding and implementing “what we intend ->định vị bản
to be and how we are going to get there.” thân
Strategy describes how an organization intends to
compete with the resources available in the existing and
perceived future environment.
danh mục đầu tư
Four Activities of the Strategic Management Process:
sứ mệnh
1. Review and define the organizational mission.
2. Analyze and formulate strategies.
3. Set objectives to achieve strategy.
4. Implement strategies through projects.
tiêu chí thực hiệnCHAPTER 2: ORGANIZATION STRATEGY AND PROJECT SELECTION 5 CHAPTER 2: ORGANIZATION STRATEGY AND PROJECT SELECTION 6

2. THE NEED
3. A PORTFOLIO MANAGEMENT SYSTEM
FOR A PROJECT PRIORITY SYSTEM

Implementation of projects without a strong priority system Portfolio of Projects by Type:

linked to strategy creates problems:
1. Problem 1: The Implementation Gap.khoảng cách buộc phải tuân thủ

2. Problem 2: Organization Politics chính trị nơi công sở

3. Problem 3: Resource Conflicts and Multitasking

chiến lược điều hành

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4. SELECTION CRITERIA 4. SELECTION CRITERIA

where:
I0 = Initial investment (since it is an outflow, the number will be
negative)
Ft = Net cash inflow for period t
k = Required rate of return
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4. SELECTION CRITERIA 5. APPLYING A SELECTION MODEL

Nonfinancial Criteria (CEO tính) Two Multi-Criteria Selection Models

mở rộng thị phần
 To capture larger market share 1. Project Classification.
 To make it difficult for competitors to enter the market 2. Selecting a Model
 To develop an enabler product, which by its 3. Sources and Solicitation of Project Proposals
introduction will increase sales in more profitable
products 4. Ranking Proposals and Selection of Projects
công nghệ lõi (Hàn Quốc)
 To develop core technology that will be used in next- 5. Responsibility for Prioritizing
generation products vd: xe máy điện: công nghệ lõi là pin
k tin cậy
 To reduce dependency on unreliable suppliers
 To prevent government intervention and regulation
phòng ngừa quy định rào cản
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5. APPLYING A SELECTION MODEL 6. MANAGING THE PORTFOLIO SYSTEM

Project Screening Process Managing the portfolio takes the selection system one step
higher in that the merits of a particular project are
assessed within the context of existing projects.
At the same time it involves monitoring and adjusting
selection criteria to reflect the strategic focus of the
organization.
1. Senior Management Input
2. The Governance Team Responsibilities
3. Balancing the Portfolio for Risks and Types of Projects

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7. CHAPTER SUMMARY

1. Multiple competing projects, limited skilled resources, dispersed

virtual teams, time to market pressures, and limited capital serve
as forces for the emergence of project portfolio management that
provides the infrastructure for managing multiple projects and
linking business strategy with project selection.
2. Every significant project selected should be ranked and the results
published. Senior management must take an active role in setting
priorities and supporting the priority system.
3. The governance team needs to scrutinize significant projects in
terms of not only their strategic value but also their fit with the
portfolio of projects currently being implemented.
4. Checklist models and multi-weighted scoring models. These
models keep project selection highly focused on alignment with
organization strategy.

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