Part 9: Organizational Influences

Enterprise Environmental Factors and Organizational Process Assets are very important and are found in almost all the processes.

Organization

What is an organization? An Organization is a Systematic arrangement of people/departments, aimed at accomplishing a purpose
Projects are influenced by organizational Culture, Style, Structure, & Maturity
Joint Venture projects are influenced by the Culture, Style, Structure, & Maturity of all the organizations that are part of the Joint Venture

Enterprise Environmental Factor

An Enterprise Environmental Factor is a Condition, not under the control over the project team, but which Influences, Constrains, and/or Directs the project
It is considered an Input to the Planning Process
It can be Positive or Negative
Includes
- Culture, Structure, & Governance
- Geographic Distribution of Resources
- Government or Industry Standards
- Infrastructure (existing facilities/equipment)
- Human Resources (skills, disciplines, and knowledge of existing workers)
- Personnel (staffing/retention guidelines, performance reviews/training records)
- Work Authorization Systems
- Marketplace Conditions
- Stakeholder Risk Tolerance
- Political Climate
- Organization’s Communication Channels
- Commercial Databases (cost estimating data, risk databases)
- Project Management Information System (automated scheduling software, configuration management system, information management system)
Cultures/Styles
- Known as Norms
- Norms include approaches to initiating/planning projects, means of executing projects, and recognized authorities
- Culture is shaped by the common experiences of the organization’s members
- Culture can develop or change over time
- Can be learned and shared
- Each organization has a unique culture
Culture Includes
- Vision, Mission, Values, Beliefs, & Expectations
- Regulations
- Motivation & Reward
- Risk Tolerance
- Leadership, Hierarchy & Authority Relationships
- Code of Conduct, Work Ethic, and Work Hours
- Operating Environment
Obviously, there are millions of ways that Culture and Enterprise Environmental Factors could affect your project. Examples include
- Operating in a country with strict safety standards will require to you adhere to those standards when designing a product
- Working for an organization with a high risk tolerance will allow you to attempt crazy “out of the box” projects
- Having loyal, dedicated workers, vs having lazy, slow workers will affect the success of the project

Communication
- Effective communication is important
- There are many ways to communicate, which will be discussed later

Organizational Structures
- Organizational Structures exist on a spectrum. If we divide the spectrum into five parts, we see Functional Organizations on the left, Project Based Organizations/Projectized Organizations (which we mentioned earlier) on the right, and Matrix Organizations in the middle.
- Functional Organization
  - Hierarchical organization
  - Each employee has a clear superior
  - Staff are grouped by specialty, and subdivided
  - Each department works independently
  - Functional Managers are in charge
  - Examples include retail stores & banks. A retail store has a clear hierarchy. There are workers (stock people, cashiers, janitors, etc.) at the bottom, and then there are department managers above them, and then there are store managers at the top. If the retail store is a large company, there could also be district/regional managers, and then CEOs above them. Each employee reports to somebody and each employee has a clearly defined function.
- Projectized Organization
  - Team members are collocated (a team member can work on multiple projects at the same time; people work where they are needed)
  - Project Managers have independence and authority
  - Functional Departments (legal, finance, etc.) report to a Project Manager or provide support to all projects
  - These organizations usually put most of their resources towards projects
  - Examples include engineering & construction firms. A big engineering firm may have thousands of engineers and hundreds of projects. Each engineer has unique qualifications. When a new project comes in, the firm will look at its roster and assign the most qualified engineers to the project. A project will usually require engineers from many different specialties. For example, if the project is to design a new office building, the project will require electrical engineers, HVAC engineers, structural engineers, and mechanical engineers. The project might also require procurement specialists, interior designers, and technicians. When business is slow, the engineers will not have much work, but the organization will continue to pay them until the next project comes in (it is too expensive to fire highly qualified engineers and rehire them). Organizations that mainly handle projects may have large fluctuations in their workloads.
- Matrix Organization
  - Balance of Functional and Projectized
  - Can be Weak, Balanced, or Strong Matrix, depending on balance
  - In a Weak Matrix, the Project Manager is a known as a Project Coordinator or Project Assistant
  - In a Strong Matrix, the Project Manager has more authority
  - Resources can be borrowed. That is, employees might spend some of their time working on functions/operations, and some of their time working on projects.
  - An example could include a factory that manufactures furniture. Employees manufacturing the furniture are part of a functional group. The company can take some of those employees and force them to work on a new furniture design project.
- Project Coordinators and Expeditors
  - A Project Coordinator reports to a higher-level manager
  - A Project Expeditor functions as a communications link between team members

Summary of Organizational Structures

Functional Organization	Weak Matrix	Balanced Matrix	Strong Matrix	Projectized Organization
Strict Hierarchy	Borrowed Resources	Borrowed Resources	Borrowed Resources	Full Time Project Resources
Staff are grouped by specialty				Staff are grouped by project
All resources report to Functional Manager	Weak Project Manager, Strong Functional Manager	Equal Project Manager and Functional Manager	Strong Project Manager, Weak Functional Manager	All resources report to Project Manager

An organization can contain multiple Functional/Matrix/Projectized structures. For example
- Functional Organization with a special project team. For example, a retail store is a functional organization, but they have small project teams that oversee new store construction.

Project Managers interact with various organizational levels. The level that a project manager interacts with depends on the
- Strategic Importance of Project
- Stakeholder Influence
- Project Management Systems
- Organizational Communications
- Resource Availability
- Project Manager’s Authority
- Entity Controlling Project Budget
For example, if the project is important, the project manager may interact directly with the CEO. If the project is less important, the project manager may send updates to a Vice President or Operational Manager.

Organizational Process Assets

An Organizational Process Asset is an Artifact, Practice, or Knowledge that can be used to perform/govern the project
Assets include lessons learned/historical information
Assets are grouped as (1) Processes and Procedures, and (2) the Corporate Knowledge Base
Process and Procedures
- The process/procedure for conducting project work
- Each organization has standard procedures for how things are done. For example, Vortex has a standard procedure for sourcing electronic components. Each component must be UL or CSA approved. The purchasing department must place the order for the components.
- How do Processes & Procedures affect each project phase?
  - Initiating/Planning
    - Includes guidelines for tailoring standard processes to the specific project requirements
    - Includes Specific Organizational Standards (HR, Health & Safety, Ethics, Quality Control)
    - Includes Templates for the project scope of work, project plans, and other project documents.
    - For example, before Vortex commences a new toaster design project, it must obtain approval from a corporate executive. A template – with the details of the project, the budget required, the proposed time frame, and the expected benefits – must be filled out.
  - Executing/Monitoring/Controlling
    - Includes change control procedures. Remember, the corporate policies and standards are not written in stone. Sometimes, we may need to modify a standard to make the project feasible. Change Control Procedures describe the procedure for requesting modifications and describe how changes are approved.
    - Includes financial controls procedures (reporting, review, accounting codes, standard contract terms). For example, if the project hires a subcontractor, the contract with the subcontractor must include specific terms specified by the organization.
    - Includes Issue/Defect Management procedures. How do we identify defects? How do we decide when the rate of defects is too high, and what do we do about it?
    - Includes Communication Requirements. How do we communicate with stakeholders?
    - Includes Procedures for Prioritizing/Approving/Issuing Work Authorization. Every organization has a procedure for approving work, for financial & safety reasons. What if the work that you’re doing affects the operations of the organization? What if it creates a hazard? You need to get permission and understand the risks.
    - Includes Risk Control Procedures. What steps do we take to reduce risks?
    - Standard Guidelines (Work Instructions, Proposal Evaluation Measurement Criteria, Performance Measurement Criteria). For example, an organization might have a specific procedure for evaluating and selecting prospective subcontractors or vendors.
  - Closing
    - Closure Guidelines/Requirements (lessons learned, audits, evaluations)
    - In each project, we learn some lessons. We also generate some project documentation. When the project is over, we take the lessons learned and put them in a database. We also put the project documents (plans, schedules, budgets) in a database. This information is used for planning future projects.
Corporate Knowledge Base (stores information, which is used to plan/evaluate future projects) includes
- Configuration Management Knowledge Base (KB)
  - Contains project management standards, policies, and procedures
- Financial Database
  - Contains historical budgets and historical project costs
- Historical Information & Lessons Learned KB
  - Contains project records, documents, closure, selection decisions, risk management
- Issue and Defect Management Database
  - Contains issues and defects identified in previous projects
- Process Measurement Database
  - Contains measurement data from previous projects
- Project Files from previous projects
  - Contains scope, cost, schedule, calendars