Project Management and Jeffrey K. Pinto

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C H A P T E R

2
The Organizational Context
Strategy, Structure, and Culture
Chapter Outline
PROJECT PROFILE Project Management Improves Lenovo’s Bottom Line INTRODUCTION 2.1 PROJECTS AND ORGANIZATIONAL STRATEGY 2.2 STAKEHOLDER MANAGEMENT Identifying Project Stakeholders Managing Stakeholders 2.3 ORGANIZATIONAL STRUCTURE 2.4 FORMS OF ORGANIZATIONAL STRUCTURE Functional Organizations Project Organizations Matrix Organizations Moving to Heavyweight Project Organizations PROJECT MANAGEMENT RESEARCH IN BRIEF The Impact of Organizational Structure on Project Performance 2.5 PROJECT MANAGEMENT OFFICES 2.6 ORGANIZATIONAL CULTURE How Do Cultures Form? Organizational Culture and Project Management PROJECT PROFILE Creating a Culture for Project Management: The Renault Racing Team Summary Key Terms Discussion Questions Case Study 2.1 Rolls-Royce Corporation Case Study 2.2 Paradise Lost: The Xerox Alto Case Study 2.3 Project Task Estimation and the Culture of “Gotcha!” Case Study 2.4 Widgets ’R Us

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Project Management: Achieving Competitive Advantage, Second Edition, by Jeffrey K. Pinto. Published by Prentice Hall. Copyright © 2010 by Pearson Education, Inc.

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Chapter 2 • The Organizational Context

Internet Exercises PMP Certification Sample Questions Integrated Project—Building Your Project Plan Notes

Chapter Objectives
After completing this chapter, you should be able to: 1. Understand how effective project management contributes to achieving strategic objectives. 2. Recognize three components of the corporate strategy model: formulation, implementation, and evaluation. 3. See the importance of identifying critical project stakeholders and managing them within the context of project development. 4. Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects. 5. Understand how companies can change their structure into a “heavyweight project organization” structure to facilitate effective project management practices. 6. Identify the characteristics of three forms of project management office (PMO). 7. Understand key concepts of corporate culture and how cultures are formed. 8. Recognize the positive effects of a supportive organizational culture on project management practices versus those of a culture that works against project management. PROJECT MANAGEMENT BODY OF KNOWLEDGE CORE CONCEPTS COVERED IN THIS CHAPTER 1. Project Scope Management Initiation (PMBoK sec. 5.1) 2. 3. 4. 5. Procurement Planning (PMBoK sec. 12.1) Project Stakeholders (PMBoK sec. 2.2) Organizational Influences (PMBoK sec. 2.3) Organizational Structure (PMBoK sec. 2.3.3)

6. Organizational Cultures and Styles (PMBoK sec. 2.3.2) 7. Socio-Economic-Environmental Influences (PMBoK sec. 2.5)

PROJECT PROFILE Project Management Improves Lenovo’s Bottom Line The demand for and sales of personal computers seems to reach greater and greater heights. With global sales of PCs approaching 300 million units for 2008, the industry remains highly profitable but also highly competitive. Lenovo, owned by a Chinese corporation but headquartered in Raleigh, North Carolina, is one of the best known and most profitable PC manufacturers. Although its main revenues come from its PC line, Lenovo produces everything from storage devices and servers to printers, projectors, digital products, computing services, and mobile handsets. Lenovo acquired IBM’s Personal Computing Division in May 2005 and has used this base as a springboard for rapid overseas expansion. In fact, the company has branch offices in 66 countries around the globe and conducts business in 166 countries, while employing more than 25,000 people worldwide. Sales outside of China account for approximately 60% of revenue. Before 2004, competitors like Dell and Hewlett-Packard were having a difficult time making serious inroads into the Chinese market for PCs, ensuring that Lenovo could maintain a secure...
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