Organization Strategy

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•22-Mar-23

Project Management Framework


and Tools (EM-504)

Dr. Faraz Akbar


(Associate Professor)

MEM Evening Program

Department of Electrical Engineering, NED University of


Engineering & Technology, Karachi

Dr. Faraz Akbar 1

Dr. Faraz Akbar

Organization Strategy

Dr. Faraz Akbar 3

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Organizations:
– Organizations can be defined as groups of people who
must coordinate their activities in order to meet
organizational objectives.
– The coordination function requires strong communications
and a clear understanding of the relationships and
interdependencies among people.

Organizational structures are dictated by such factors as


technology and its rate of change, complexity, resource availability,
products and/or services, competition, and decision-making
requirements.

“There is no such thing as a good or bad organizational structure; there are only appropriate or
inappropriate ones”

Dr. Faraz Akbar

Organizational Work Flow


1. Organizations are continually restructured to meet the
demands imposed by the environment. Restructuring can
change the role of individuals in the formal and the informal
organization.

2. The greatest usefulness of behavioralists lies in their ability to


help the informal organization adapt to changes and resolve
the resulting conflicts. Unfortunately, behavioralists cannot be
totally effective unless they have input into the formal
organization as well.

3. Whatever organizational form is finally selected, formal


channels must be developed so that each individual has a
clear description of the authority, responsibility, and
accountability necessary for the work to proceed.
Dr. Faraz Akbar

Organizational Work Flow (Continued 1)

• Authority is the power granted to individuals (possibly by


their position) so that they can make final decisions.

• Responsibility is the obligation incurred by individuals in


their roles in the formal organization to effectively perform
assignments.

• Accountability is being answerable for the satisfactory


completion of a specific assignment.

(Accountability = authority + responsibility)

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Organization Strategy
• Strategy is fundamentally deciding how the organization will
compete.
– Organizations use projects to convert strategy into new
products, services, and processes needed for success.

• Strategy is implemented through projects. Every project should


have a clear link to the organization’s strategy.

• For example, Intel’s major strategy is one of differentiation. Its


projects target innovation and time to market. Currently, Intel is
directing its strategy toward specialty chips for products other than
computers, such as autos, security, cell phones, air controls.
• Projects and project management play the key role in supporting
strategic goals. It is vital for project managers to think and act
strategically.
Dr. Faraz Akbar

Why Project Managers Need to Understand the


Strategic Management Process?
• Changes in the organization’s mission
and strategy
1. Project managers must respond to changes
with appropriate decisions about future projects
and adjustments to current projects.
2. Project managers who understand their
organization’s strategy can become effective
advocates of projects aligned with the firm’s
mission.
Dr. Faraz Akbar

The Strategic Management Process:


An Overview

“Strategic management is the process of

assessing “what we are” and deciding and

implementing “what we intend to be and

how we are going to get there.”

Dr. Faraz Akbar

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The Strategic Management Process:


An Overview (Continued 1)
• Strategic Management
– Provides the theme and focus of the future
direction for the firm. Major dimensions of
PM are:
1. Responding to changes in the external
environment - environmental scanning
2. Allocating scarce resources of the firm to
improve its competitive position - internal
responses to new action programs
– Requires strong links among mission, goals,
objectives, strategy, and implementation.
Dr. Faraz Akbar

Strategic
Management
Process

Dr. Faraz Akbar

Strategic Management Process

• Four of Activities of the Strategic


Management Process
1. Review and define the organizational
mission.
2. Set long-range goals and objectives.
3. Analyze and formulate strategies to reach
objectives.
4. Implement strategies through projects

Dr. Faraz Akbar

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1. Review and Define the Organizational Mission

• Mission statements (MS) identify both the mission


«what are we now » and lead to the long term
objectives or goals «what we want to become»

• Mission statements Components – about products and


services, include organizational philosophy, key
technologies, public image, contribution to society,
target markets, change infrequently.

Dr. Faraz Akbar

Boeing Mission
Boeing Mission:
• We are constantly re-examining our capabilities and processes to ensure
that our company is as strong and vital as our heritage. In fact, our culture
mirrors the heritage of aviation itself, built on a foundation of innovation,
aspiration and imagination.”

Boeing Vision: "People working together as a global enterprise for aerospace


leadership.“

Boeing Business Strategy:


• "Detailed customer knowledge and focus that understand, anticipate and
respond to customer needs.
• Large-scale systems integration that continually develops and advances
technical excellence.
• A lean enterprise characterized by efficiency, supplier management, short
cycle times, high quality and low transaction costs.”
Dr. Faraz Akbar

Airbus Mission
• Airbus Vision/Mission:
• “Creating the best and safest aircraft is Airbus’
mission”
• Passenger at Heart, Airline in Mind
• Airbus’ mission is to meet the needs of
airlines and operators by producing the most
modern and comprehensive aircraft family on
the market, complemented by the highest
standard of product support.
Dr. Faraz Akbar

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For example, compare the phrasing of the


following mission statements:

1. Provide hospital design services.


2. Provide voice/data design services.
3. Provide information technology services.
4. Increase shareholder value.
5. Provide high-value products to our customer.

Dr. Faraz Akbar

2. Set Long-Range Goals and Objectives


• Objectives translate the organization mission into specific,
concrete, measurable terms.
• Organizational objectives set targets for all levels of the
organization.
• Objectives pinpoint the direction managers believe the
organization should move toward.
• Objectives answer in detail where a firm is headed and when
it is going to get there.
• Objectives for the organization cover markets, products,
innovation, productivity, quality, finance, profitability,
employees, and consumers.
• In every case, objectives should be as operational as
possible.
Dr. Faraz Akbar

2. Set Long-Range Goals and Objectives (Continued 1)

• Characteristics of Objectives are:


S Specific Be specific in targeting an objective

M Measurable Establish a measurable indicator(s)


of progress

A Assignable Make the objective assignable to one


person for completion

R Realistic State what can realistically be done


with available resources

T Time Related State when the objective cab be


achieved, that is, duration

Dr. Faraz Akbar

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3. Analyze and Formulate Strategies to Reach Objectives

• Formulating strategy answers the question of what


needs to be done to reach objectives.
• Strategy formulation includes determining and
evaluating alternatives that support the
organization’s objectives and selecting the best
alternative.
• The first step is a realistic evaluation of the past
and current position of the enterprise.
• This step typically includes an analysis of “who are
the customers” and “what are their needs as they
(the customers) see them.”
Dr. Faraz Akbar

3. Analyze and Formulate Strategies to Reach Objectives (Continued 1)

• The next step is an assessment of the internal and external


environments. What are the internal strengths and
weaknesses of the enterprise? Examples of internal
strengths or weaknesses could be core competencies,
such as technology, product quality, management talent,
low debt, and dealer networks.
• Assessment of the external and internal environments is
known as the SWOT analysis (strengths, weaknesses,
opportunities, and threats).
• From this analysis, critical issues and a portfolio of strategic
alternatives are identified. These alternatives are compared
with the current portfolio and available resources; strategies
are then selected that should support the basic mission and
objectives of the organization.
Dr. Faraz Akbar

4. Implementation through Projects


Strategy Implementation lacks structure that
is usually available for Strategy formulation

Key Areas
1.Allocation of resources (across projects)
2.A formal and informal organization that supports strategy
and projects
3.Planning and control systems to be sure activities are
effectively performed
4.Motivating project contributors
5.Prioritizing projects – without implementation, success is
impossible
Dr. Faraz Akbar

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The Need for an Effective Project Portfolio Management System

• Implementation of projects without a strong priority system linked to strategy


creates problems.
• A project portfolio system can go a long way to reduce, or even eliminate,
the impact of these three problems.
1. The Implementation Gap
– The lack of understanding and consensus on strategy among top
management (who formulate strategy) and middle-level (who implement
strategy). Objectives and strategies made independently at different levels
of the organization by different functional groups cause problems.
2. Organization Politics
– Project selection is based on the persuasiveness and power of people
advocating the projects. (Pet projects)
3. Resource Conflicts and Multitasking
– The multi-project environment creates interdependency relationships of
shared resources which results in the starting, stopping, and restarting
projects. Multitasking adds to delays and costs.

Dr. Faraz Akbar

Benefits of Project Portfolio Management

1. Builds discipline into project selection process.


2. Links project selection to strategic metrics.
3. Prioritizes project proposals across a common set of
criteria, rather than on politics or emotion.
4. Allocates resources to projects that align with strategic
direction.
5. Balances risk across all projects.
6. Justifies killing projects that do not support organization
strategy.
7. Improves communication and supports agreement on
project goals.

Dr. Faraz Akbar

A Portfolio Management System


1. Portfolio management asks “What is strategic to our
organization?”
2. Portfolio management provides information that allows
people to make better business decisions.
3. Since projects clamoring for funding and people usually
outnumber available resources, it is important to follow a
logical and defined process for selecting the projects to
implement.
4. Design of a project portfolio system should include
classification of a project, selection criteria depending upon
classification, sources of proposals, evaluating proposals,
and managing the portfolio of projects.

Dr. Faraz Akbar

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•22-Mar-23

A Portfolio Management System (Continued 1)


1. Many organizations find they have three different kinds of
projects in their portfolio: compliance and emergency (must
do), operational, and strategic projects.

A classification of
types of Projects.

Dr. Faraz Akbar

A Portfolio Management System (Continued 2)


• Compliance projects are typically those needed to meet regulatory
conditions required to operate in a region; hence, they are called “must do”
projects. Emergency projects, such as rebuilding a soybean factory
destroyed by fire, meet the must do criterion. Compliance and emergency
projects usually have penalties if they are not implemented.

• Operational projects are those that are needed to support current


operations. These projects are designed to improve efficiency of delivery
systems, reduce product costs, and improve performance. Total quality
management (TQM) projects are examples of operational projects.

• Strategic projects are those that directly support the organization’s long-
run mission. They frequently are directed toward increasing revenue or
market share. Examples of strategic projects are new products, research,
and development.

Dr. Faraz Akbar

•9

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