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Thursday, May 5, 2011

Chapter 10: Organizational Influences on Projects

In the previous chapters, we saw about the various stakeholders in a project and also about the most influential & important stakeholder of them all, you. In this chapter, we are going to take a look at the impact of organizational culture on a project and its operations.

So, lets get started!!!

Can an Organizations Culture affect a Projects Outcome?

A project is typically performed inside a company called the performing organization, which creates an environment for the project called the project environment. The projects are influenced by the project environment, which is shaped by many elements, such as organizational culture, organizational structure, enterprise environmental factors, organizational process assets, and the maturity of the organization.

To summarize, Yes the organizational environment within which a project is being executed can have a significant impact on the outcome of the project.

Understanding the Organizational Culture

Each organization often develops its own unique culture, which depends on many factors, such as the application area of the organization and the general management philosophy implemented in the organization.

The organizational culture includes the following elements:

1. Work environment - The organizational culture is reflected by work ethic and work hours. For example, do the employees work strictly from 8:00 AM to 5:00 PM, or is the timing flexible so that employees can change their work timings to cater to some of their personal commitments. Ex: If a persons wife is pregnant and is experiencing morning sickness, he would have to support his wife atleast for an hour or so in the morning and hence he may not be able to make it to work @ 8:00 AM sharp. Would the organization be flexible enough to allow him to come in late say 9:30 AM and let him work till 6:30 to compensate for it?
2. Management style - Organizational culture also reflects authority relationships. Do the managers manage by authority or by leadership? How much feedback is taken from the employees in making management decisions? How do the employees view the authority of the management?
3. Policies - The organizational policies, methods, and procedures also reflect the organizational culture.
4. Values and vision - A significant part of organizational culture lives in the set of values, norms, beliefs, and expectations shared within the organization. This may be impacted by the organization’s mission and vision. For example, a nonprofit organization will have different values than a for-profit organization. Furthermore, one organization may encourage an entrepreneurial approach while another organization may be rigidly hierarchical and take an authoritarian approach to making decisions about what to do and what not to do.

At the beginning of this chapter, I had said that an organizations culture can have a significant impact on a project. Now that we know what is part of an organizations culture, let us see how an organizations culture can influence an project.

Organizational culture influences multiple aspects of a project. Some are:

1. Project selection - The organizational culture will creep into the selection criteria for projects and programs. For example, a rigidly hierarchical and authoritarian organization may not be very adaptive to programs and projects with high risk.
2. Project management style - The project manager should adapt the management style to the organizational culture. For example, an authoritarian style may run into problems in an entrepreneurial organization with a participative culture.
3. Team performance assessments - While making the team performance assessment, the project manager should keep in mind the established norms and expectations within the organization.
4. Project policies and procedures - The project policies and procedures will be influenced by the organizational policies and procedures because both should be consistent with each other.

The culture of an organization is greatly influenced by its structure.

From the perspective of a project, there are two kinds of organizations:
1. project-based and
2. non-project-based.

The project-based organizations fall into two subcategories, those that derive their revenue primarily from performing projects for others and those that do in-house projects to deliver products or services for customers. Project-based organizations are well aware of the importance of project management and generally have systems to support project management. Non-project-based organizations generally have a low appreciation for and understanding of the importance of project management and often lack systems to support project management.

The point here is that the type of organization and the organizational structure have a great influence on how the projects will be managed inside the organization. This is what we are going to learn in the next chapter.

Previous: Most Influential Stakeholder

Next: Understanding the Organizational Structure

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