1.

Organization
Structure & Culture
2. Organization
Strategy
BITS Pilani (Ch. 3 – T1) M K Hamirwasia
Pilani Campus WILPD
 BITS Pilani
Pilani Campus

ET ZC423/PE ZC423-Merged
Essentials of Project Management
First Semester 2024-25
Lecture No. 4
BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956
Organization Structure and
Culture
 Project Management Structures
 Organizing Projects within the Functional Organization
 Organizing Projects as Dedicated Teams
 Organizing Projects within a Matrix Arrangement
• Different Matrix Forms
 The Right Project Management Structure
 Organization Considerations
 Project Considerations
 Organizational Culture
 Implications of Organizational Culture for Organizing Projects
 Case 3.1

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THE RIGHT PROJECT
MANAGEMENT STRUCTURE

• ORGANIZATION CONSIDERATIONS

• PROJECT CONSIDERATIONS

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ORGANIZATION
CONSIDERATIONS
• Percentage of Core Work Involving Projects!

• If Over 75% of the Work Involves Projects, Then an

Organization Should Consider a Fully Projectized Structure
• If an Organization has Both Standard Products and
Projects, Then a Matrix Organization will be more
Appropriate
• If an Organization has Very Few Projects, Then a Less
Formal Arrangement is Required. Dedicated Teams Could
be Created on an As-Needed Basis, and the Organization
Could Outsource Project Work

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ORGANIZATION
CONSIDERATIONS
• Resource Availability!

• If Resources Need to be Shared Amongst Multiple

Projects, Then Matrix Type is Preferred

• If Critical Personnel can not be Tied up on Individual

Projects, Then Matrix Type is Preferred

• When Resources are Not Available Internally, Then

Create a Dedicated Project Team But Outsource
Project Work

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PROJECT
CONSIDERATIONS
• Size Of Project
• Strategic Importance
• Novelty and Need for Innovation
• Need for Integration (No. of Departments
Involved)
• Environmental Complexity
• Budget and Time Constraints
• Stability of Resource Requirements

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Project Considerations

• Higher the Levels of These Factors, More Autonomy and

Authority the Project Manager and Team Need to be
Successful

• Dedicated Project Teams Should be Used for Urgent

Projects in Which the Nature of the Work Requires
People Working Steadily From Beginning to End

• Creation of a Flexible Management System That

Organizes Projects According to Requirements

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PROJECT TYPES

• Advanced Development Projects - High Risk Projects:

Involve Creation of a Breakthrough Product or Process

• Platform Projects - Medium Risk Projects: Involve

System Upgrades That Yield New Products and
Processes

• Incremental Projects - Low Risk Projects: Involve Minor

Adjustments in Existing Products and Processes

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ORGANIZATION CULTURE

• Refers to a System of Shared Norms, Beliefs,

Values and Assumptions which Binds People
Together Thereby Creating Shared Meanings

• Culture Reflects the Personality of the

Organization and is similar to an Individual’s
Personality

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ORGANIZATION CULTURE

Culture serves the following important functions:

•Culture provides a sense of identity to its

members.
•Culture helps legitimize the management system
of the organization.
•It clarifies and reinforces standards of behaviour.
•Culture helps create social order withing an
organization.

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CHARACTERISTICS

• Member Identity: The Degree to Which Employees

Identify With the Organization as a Whole Rather Than
With Their Type of Job or Field of Professional Expertise
• Team Emphasis: The Degree to Which Work Activities
are Organized Around Groups Rather Than Individuals
• Management Focus: The Degree to Which Management
Decisions Take Into Account the Effects of Outcomes on
People Within the Organization
• Unit Integration: The Degree to Which Units Within the
Organization are Encouraged to Operate in a
Coordinated or Interdependent Manner

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Characteristics

• Control: The Degree to Which Rules, Policies and Direct

Supervision are Used to Oversee and Control Employee
Behavior

• Risk Tolerance: The Degree to Which Employees are

Encouraged to be Aggressive, Innovative, and Risk
Seeking

• Reward Criteria: The Degree to Which Rewards Such as

Promotion and Salary Increases are Allocated According to
Employee Performance Rather Than Seniority, Favoritism
or Other Nonperformance Factors

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Characteristics

• Conflict Tolerance: The Degree to Which Employees are

Encouraged to Air Conflicts and Criticisms Openly

• Means Versus End Orientation: The Degree to Which

Management Focuses on Outcomes Rather Than on
Techniques and Processes Used to Achieve the Results

• Open-System Focus: The Degree to Which the Orgn.

Monitors and Responds to Changes in the External
Environment

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IDENTIFYING CULTURAL
CHARACTERISTICS
• Study the Physical Characteristics of the Organization
– External Architecture, Offices, Uniform Of Employees

• Read About the Organization

– Annual Report, Mission Statements, Press Releases, Internal News
Letters
– Concern for People, Concern for Results and the Bottom Line

• Observe How People Interact Within the Organization

– Pace, Rituals, Values, Beliefs
– Meetings, Conversation

• Interpret Stories and Folklore Surrounding the Organization

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Implications of Organizational
Culture for Organizing Projects

• There are strong relationships among project management

structure, organizational culture and successful project
management

• Greater project authority and time are required to complete

projects that encounter a strong, negative cultural current

• Conversely, less formal authority and fewer dedicated

resources are needed to complete projects in which the
cultural currents generate behaviour and cooperation
essential to project success

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Implications of Organizational
Culture for Organizing Projects

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Case 3.1
Moss and McAdams Accounting Firm

1. If you were Palmer at the end of the case, how would

you respond?

2. What, if anything, could Palmer have done to avoid

losing Olds?

3. What advantages and disadvantages of a matrix type

organization are apparent from this case?

4. What could the management at M&M do to more

effectively manage situations like this?

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BITS Pilani, Pilani Campus
BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956
Strategy
Strategy – a plan of action to achieve a long-term
or overall aim.
Eg. Economic strategy, military strategy

Strategy is the direction and scope of an

organization over the long-term, which achieves
advantage for the organization through its
configuration of resources within a challenging
environment to meet the needs of markets and
to fulfil stakeholder expectations.

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Organization Strategy
Importance of Strategic Planning
• Aligning projects with the strategic goals of the Org’n is crucial for
project success, esp. in today’s economic climate which is marked by
rapid changes in technology, global competition and financial
uncertainty.
• Ensuring a strong link b/n strategy and projects is crucial to success.
• More difficult to create and maintain this strong link in larger and more
diverse organizations. Lack of a process that clearly aligns project
selection to the strategic plan results in poor utilization of the Orgn’s
resources.
• An Org’n can ensure this link and alignment thro’ integration of projects
with the strategic plan.
• Integration assumes the existence of a strategic plan and a process for
prioritizing projects by their contribution to the plan.

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Why Project Managers Need to
Understand Strategy
• It is time to expand the traditional role of the PM from an operational
to a more strategic perspective.
• Why PM’s need to understand their Organization’s mission and
strategy:
1. So that they can make appropriate decisions and adjustments. Eg. How to
respond to suggestions to modify the design of a product to enhance
performance! How to respond to delays!
2. So that they can be effective project advocates:
• Demonstrate to senior management how the Project contributes to the firm’s
mission. Protection and support come from being aligned with corporate
objectives.
• Explain to team members and other stake holders why certain objectives and
priorities are critical – essential for getting buy-in on contentious trade-off
decisions.

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THE STRATEGIC MANAGEMENT PROCESS

• SMP - It is the process of evaluating “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.
• Two major dimensions of strategic mgmt. are:
1. Responding to changes in the external environment and
allocating scarce resources of the company to improve its
competitive position. Constant scanning of the external envn.
for changes is a major requirement for survival in a dynamic
competitive envn.
2. The internal responses to new action programs aimed at
improving the competitive position of the company.

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THE STRATEGIC MANAGEMENT PROCESS

• SM provides the theme and focus of the

future direction of the Org’n.
• SM positions the Org’n to meet the needs
and requirements of its customers for the
long term.
• SM requires strong links among mission,
goals, objectives, strategy and
implementation.

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THE STRATEGIC MANAGEMENT PROCESS

• The mission gives the general purpose of the Org’n.

• Goals give global targets within the mission.
• Objectives give specific targets to goals.
• Objectives give rise to formulation of strategies to reach
objectives.
• Finally, strategies require actions and tasks to be
implemented. In most cases the actions to be taken
represent projects.

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Vision, Mission, Core
Values…
•Vision – It provides a destination for the organization. Big picture of what you want
to achieve.
•Mission – General statement of how you will achieve the vision.
A companion statement often created with the vision and mission is a statement of
core values.
•Core Values – How you will behave during the process.
Once you have identified what your organization wants to achieve (vision) and
generally how the vision will be achieved (mission), the next step is to develop a
series of statements specifying how the mission will be utilized to achieve the vision:
•Strategies – Strategies are one or more ways to use the mission statement in order
to achieve the vision statement. Although an organization will have just one vision
statement and one mission statement, it may have several strategies.
•Goals – These are general statements of what needs to be accomplished to
implement a strategy.
•Objectives – Objectives provide specific milestones with a specific timeline for
achieving a goal.
•Action Plans – These are specific implementation plans of how you will achieve an
objective.

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Vision, Mission, Core
Values
Vision Statement – A mental picture of what you want to accomplish or achieve. For
example, your vision may be a successful winery business or an economically active
community.
Vision of an Example Business – A successful family dairy business.

Mission Statement – A general statement of how the vision will be achieved. The
mission statement is an action statement that usually begins with the word "to".
Mission of an Example Business – To provide unique and high quality dairy products
to local consumers.

Core Values– Core values define the organization in terms of the principles and
values the leaders will follow in carrying out the activities of the organization.
Core Values of the Example Business:
•Focus on new and innovative business ideas
•Practice high ethical standards.
•Respect and protect the environment.
•Meet the changing needs and desires of clients and consumers.

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

 Strategies, Goals
Strategies – A strategy is a statement of how you are going to achieve something.
More specifically, a strategy is a unique approach of how you will use your mission to
achieve your vision. Strategies are critical to the success of an organization because
this is where you begin outlining a plan for doing something. The more unique the
organization, the more creative and innovative you need to be in crafting your
strategies.
Goals – A goal is a general statement of what you want to achieve. More specifically,
a goal is a milestone(s) in the process of implementing a strategy. Examples of
business goals are:
•Increase profit margin
•Increase efficiency
•Capture a bigger market share
•Provide better customer service
•Improve employee training
•Reduce carbon emissions
Be sure the goals are focused on the important aspects of implementing the strategy.
Be careful not to set too many goals or you may run the risk of losing focus. Also,
design your goals so that they don’t contradict and interfere with each other.

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 Objectives, Action Plans
Objectives – An objective turns a goal’s general statement of what is to be
accomplished into a specific, quantifiable, time-sensitive statement of what is going to
be achieved and when it will be achieved. Examples of business objectives are:
•Earn at least a 20 percent after-tax rate of return on our investment during the next
fiscal year
•Increase market share by 10 percent over the next three years.
•Lower operating costs by 15 percent over the next two years through improvement in
the efficiency of the manufacturing process.
•Reduce the call-back time of customer inquiries and questions to no more than four
hours.
Objectives should meet the following criteria:
•Measurable: What specifically will be achieved and when will it be achieved?
•Suitable: Does it fit as a measurement for achieving the goal?
•Feasible: Is it possible to achieve?
•Commitment: Are people committed to achieving the objective?
•Ownership: Are the people responsible for achieving the objective included in the
objective-setting process?
Action Plans – Action plans are statements of specific actions or activities that will be
used to achieve a goal within the constraints of the objective.
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Actions Plans within the context of
goals and objectives

Examples of action plans within the context :

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 Vision, Mission, …
Examples of strategies, goals, objectives and action plans are
shown for a business organization designed to improve the
rural economy through developing rural businesses.
Remember, the vision is what you want to accomplish.
Mission is a general statement of how you will achieve your
vision.
Strategies are a series of ways of using the mission to achieve
the vision.
Goals are statements of what needs to be accomplished to
implement the strategy.
Objectives are specific actions and timelines for achieving the
goal.
Action plans are specific actions that need to be taken for
reaching the milestones within the timeline of the objectives.
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Example

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Four Activities of the
Strategic Mgmt Process
• Review and Define the Organizational
Mission
• Analyze and Formulate Strategies
• Set Objectives to Achieve Strategy
• Implement Strategies Through Projects

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Review and Define the
Organizational Mission
• Mission Statements Identify the Scope of the Organization in
Terms of its Product or Service.
• The mission statement communicates and identifies the purpose
of the Org’n to all stakeholders.
• Traditional components found in MS’s are: major products and
services, target customers and markets, and geographical domain.
• Frequently include Organizational Philosophy, Key Technologies,
Public Image and Contribution to Society.
Examples
• Provide Cloud Computing Services
• Provide Data Mining Services
• Provide Information Technology Services
• Increase Shareholder Value
• Provide High-value Products to Our Customer.

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Analyze and Formulate
Strategies
• What needs to be done to reach objectives.
• SF includes determining and evaluating alternatives that
support the Orgn’s objectives and selecting the best
alternative.
• The first step is an evaluation of the past and current
position of the enterprise – an analysis of who are the
customers and what are their needs as they see them.
• The next step is an assessment of the Internal and
External Environments.
• SWOT Analysis
• Formulating strategy might range around 20 percent of
management’s effort.

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956
BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956
BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956
Set Objectives to Achieve
Strategies
• Objectives Translate Org’n Strategy into Specific,
Concrete, Measurable Terms
• Typically, Objectives Cover Markets, Products,
Innovation, Productivity, Quality, Finance, Profitability,
Employees and Consumers
• Objectives should be as operational as possible, i.e.
objectives should include a time frame, be measurable,
be in an identifiable state, and be realistic.
• SMART Goals (Specific, Measurable, Assignable,
Realistic and Time Bound)

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SMART (Objectives)

• Specific : Be Specific in Targeting an Objective

• Measurable: Establish a Measurable Indicator of
Progress
• Assignable: Make the Objective Assignable to One
Person for Completion
• Realistic: State What can Realistically be Done with
Available Resources
• Time Related: State When the Objective can be
Achieved

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Implement Strategies
through Projects
• Implementation Requires Action and Completing Tasks:
• First, completing tasks requires allocation of resources:
Funds, People, Technological Skills, Management
Talents And Equipment. Multiple objectives place
conflicting demands on resources.
• Second, implementation requires a Formal and Informal
Organization that Complements and Supports Strategy
and Projects.
• Third, Planning and Control Systems must be in place.
• Fourth, Motivating Project Contributors.
• Finally, portfolio mgmt and prioritizing projects.

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956
THE NEED FOR A PROJECT PORTFOLIO
MANAGEMENT SYSTEM

1. THE IMPLEMENTATION GAP

– Conflicts Frequently Occur Amongst Functional

Managers And Cause Lack Of Trust
– Frequent Meetings Are Called To Establish Or Re-
negotiate Priorities
– People Frequently Shift From One Project To Another
– People Are Working On Multiple Projects And Feel In-
efficient
– Resources Are Not Adequate

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THE NEED FOR A PROJECT PORTFOLIO
MANAGEMENT SYSTEM

2. ORGANIZATION POLITICS

• Politics can influence which projects receive funding and high

priority
• Project Selection may not be on Facts and Sound Reasoning but on
Persuasiveness and Power of People Advocating Projects
• Sacred Cow Project: Project that a powerful, high ranking official
advocates
• New Baby: Irrational Obsession with a Project
• Project Sponsors’ Role
• Top Management should develop a System for Identifying and
Selecting Projects that Reduce the Impact of Internal Politics and
Fosters the Selection of the Best Projects

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THE NEED FOR A PROJECT PORTFOLIO
MANAGEMENT SYSTEM

3. RESOURCE CONFLICTS AND MULTI-TASKING

• Problem of Sharing and Scheduling Resources across

Projects
• Multitasking Involves Starting and Stopping Work on one
Task to go and work on another Project and then Return
to work on the Original Task
• Less Efficient People

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Benefits of Project Portfolio
Mgmt
• Builds Discipline into Project Selection Process
• Links Project Selection to Strategic Metrics
• Prioritizes Project Proposals across a common set of
criteria, rather than on politics or emotion
• Allocates Resources to Projects that Align with Strategic
Direction
• Balances Risk across all Projects
• Improves Communication and supports Agreement on
Project Goals
• Justifies killing Projects that do not support Organization
Strategy

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A PORTFOLIO
MANAGEMENT SYSTEM
• The aim of portfolio mgmt is to ensure that Projects are
aligned with Strategic Goals and prioritized appropriately.
• Since projects vying for funding and personnel usually
outnumber available resources, it is imp to follow a logical
and defined process for selecting the projects to implement.

• Design of a Portfolio Management System should include:

– Classification of a Project
– Selection Criteria
– Sources of Proposals
– Evaluating Proposals
– Managing the Portfolio of Projects

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CLASSIFICATION OF THE
PROJECT
 COMPLIANCE or EMERGENCY: “MUST DO PROJECTS” TO
MEET REGULATORY CONDITIONS REQUIRED TO OPERATE
IN A REGION

 OPERATIONAL / Infrastructure: TO SUPPORT CURRENT

OPERATIONS e.g. REDUCE DOWNTIME, IMPROVE
EFFICIENCY, ENHANCE QUALITY ETC.

 STRATEGIC: DIRECTLY SUPPORT LONG RUN MISSION e.g.

NEW PRODUCT, RESEARCH & DEVELOPMENT PROJECTS
ETC.

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956
L4 - Essentials of Project Management
First Semester 2024-25 (S1-24)

Thank You!
M K Hamirwasia
[email protected]

BITS Pilani, Pilani Campus