Chapter 2

Managing Projects in Different Environments

CERTIFICATION OBJECTIVES

2.01   Utilizing Enterprise Environmental Factors

2.02   Leveraging Organizational Process Assets

2.03   Working with Organizational Systems

2.04   Completing Projects in Different Organizational Structures

Two-Minute Drill

Q&A    Self Test

Where you work as a project manager is likely different from where other readers of this book work. Just as every project is unique, so, too, is the environment in which a project exists. Consider software development projects, construction projects, IT infrastructure projects, learning and development projects, and many other different types of projects. Each of these projects operates in a distinct environment. The environment is a factor of influence in these projects and in your projects.

The environment in which a project exists can influence the expectations of the project manager, how you manage the project, how stakeholders contribute to the project, and a myriad of other concerns. Understanding the environment and what’s expected of the project manager as far as formalities, processes, rules, and regulations—and even simpler things like templates and forms—are all part of the project environment.

Often when we discuss the project environment, we think of things like the tangible attributes of where the project takes place: construction sites, offices, hospital settings, and more. Although these are certainly part of the environment, there’s also the political landscape, the reputation of the project manager and stakeholders, and the industry influence in which the project is operating. The environment includes all characteristics of where the project exists—all the moving parts, the seen and unseen, and the expectations of management regarding the project manager; these are all parts of the project environment.

CERTIFICATION OBJECTIVE 2.01

Utilizing Enterprise Environmental Factors

Enterprise environmental factors are the elements that directly or indirectly influence the management of the project, but the project manager has no direct control over these elements. For example, your organization may have particular rules for bringing a project team member onto your project. This rule is outside of your control, and you must abide by it. This rule might sometimes hinder you from zipping along in project execution, but it also helps bring order and control to the projects within the organization. Just as organizational process assets are inputs to many project management processes, so, too, are enterprise environmental factors.

Every organization has unique enterprise environmental factors. For the PMP exam, you’ll need to recognize that enterprise environmental factors are things that the project manager must abide by but has very little control over. Enterprise environmental factors are basically rules and policies, but they could also include regulations that directly influence how the project manager manages the project. You’ll see enterprise environmental factors often through this book, the PMBOK Guide, and likely your PMP exam.

Reviewing Internal Enterprise Environmental Factors

There are internal and external enterprise environmental factors that you’ll have to work with—and know for your exam. Internal enterprise environmental factors are the factors unique to your organization. To be clear, there’s sometimes a negative connotation about enterprise environmental factors, because you’re required to use them and abide by them. Sure, some enterprise environmental factors may be a pain to deal with and work through, but they’re designed to create structure and framework, and to establish a common approach to all projects within your organization.

Here are some common internal enterprise environmental factors:

   Organizational culture, structure, and governance Probably the most obvious internal enterprise environmental factor is the makeup of your organization. Consider the leadership, vision, beliefs, hierarchy of management, ethics, and organizational code of conduct expectations.

   Physical location of resources and facilities In a large organization, facilities and resources may be dispersed around the globe. The physical location of resources and worksites can directly influence how you manage your project. Challenges can include communications, risks, and sharing and accessing resources.

   Infrastructure of your organization Consider the equipment, facilities, tools, communication channels, technology, and the availability and capabilities of these resources.

   IT software Most project managers utilize software for scheduling, configuration management, online systems, and work authorization systems. This software, often required to be used, is a great example of an enterprise environmental factor.

   Resource availability Resources aren’t just people and could also include tools, equipment, facilities, and materials. The internal processes the project manager must follow to obtain resources, such as procurement, contracting, and subcontractors, can all influence the project management approach.

   Employee capability You must also examine the capabilities of the employees involved in the project. You’ll need to consider their expertise, skillsets, competencies, and any specialized knowledge. You’re looking for those with skills as well as those who need training.

These are just some of the more common internal enterprise environmental factors. Other factors in your organization may cause the project management approach to be limited in other ways. For your PMP exam, however, these are the most common ones to recognize.

Reviewing External Enterprise Environmental Factors

External enterprise environmental factors are conditions, regulations, and other influences that affect how you manage your project. Not all projects will, of course, have the exact same external enterprise environmental factors, because many factors are industry specific. For example, a healthcare organization won’t have the same enterprise environmental factors as a banking organization. External factors are somewhat broad, and your industry will likely have more specific factors because of the nature of your work. For your exam, you should be familiar with the following external enterprise environmental factors:

   Marketplace conditions The marketplace you operate within is an enterprise environmental factor. Consider your competition, market share, organizational brand, trademarks, and the economic makeup of your industry.

   Cultural influences and issues How your industry is perceived is an external enterprise environmental factor. The political climate, customer perceptions, and news within your industry all are cultural influences and issues that make up the unique external enterprise environmental factors. For example, consider the cultural factors surrounding the weapons industry and how they affect these organizations’ operations.

   Laws and regulations Laws and regulations are external enterprise environmental factors that directly affect the management of projects.

   Commercial databases Databases that organization purchase to help predict cost and schedule estimating, risk studies, and benchmarking directly affect how a project is estimated and managed.

   Academic research Some organizations rely on information from academic studies, white papers, and other publications to guide their efforts and projects.

   Government and industry standards Organizations can adhere to government and industry standards for production, environmental considerations, expectations of quality, and the products or services they provide.

   Financial Organizations that span countries will likely consider currency exchange rates and tariffs. Longer projects may consider inflation and interest rates.

   Physical enterprise environmental factors There’s little you can do about the weather, and that’s a great example of a physical factor that can affect a project. The environment where the project is taking place is also a physical enterprise environmental factor.

See the video “Enterprise Environmental Factors and OrganizationalProcess Assets.”

CERTIFICATION OBJECTIVE 2.02

Leveraging Organizational Process Assets

“Organizational process assets” is a nice way of referring to all the resources within an organization that can be used, leveraged, researched, or interviewed to make a project successful. This means past projects, subject matter experts within your organization, risk databases, procedures, plans, processes, stakeholder knowledge, and methods of operations.

As a project manager, your goal is to get things done—that’s what project management is all about. Too many project managers get stuck in planning for too long and don’t get into execution. I’m not saying you don’t need to plan—you do, but you don’t need to start from zero every time. When you consider the projects that you manage, chances are there’s some similarity between the projects. You’re doing the same type of projects over and over, because you’re working in a specific industry where the nature of the projects you manage all support the organizational vision and strategies.

You have knowledge that is relevant to your projects types, and you likely have lots of information from past projects to call upon. Past projects can provide information for current projects. Lessons learned, records, and past project files can be leveraged to manage the current project and usher along the planning processes. Sure, there will be some specific things that take time to plan, but you can rely on past projects to speed up portions of the existing projects. This is one of the most valuable concepts of organizational process assets: the past helps the present.

Recognizing Common Organizational Process Assets

Of course, organizational assets will vary from industry to industry, but for the PMP exam, consider all the following:

   Standards, policies, and organizational procedures

   Standardized guidelines and performance measurements

   Templates for project documents such as contracts, work breakdown structures, project network diagrams, and status reports

   Guidelines for adapting project management processes to the current project—remember that not every process needs to be completed on every project

   Financial controls for purchasing, accounting codes, and procurement processes

   Communication requirements within your organization, such as standard forms, procedures, and reports that you must use as a project manager in your organization

   Processes for project activities, such as change control, closing, communications, financial controls, and risk control procedures

   Project closing procedures for acceptance, product validation, and evaluations

Throughout this book, you’ll see the term “organizational process assets” used for different processes and inputs for processes. It simply means that you’ll rely on information that has been created to help you, the project manager, complete your current job. Organizational process assets are templates, software, and historical information that you can use on your current project. A template, by the way, doesn’t always mean a shell of a document, as you might use in Microsoft Word. Templates in project management can be past project plans, scope statements, and just about any other document that you adapt for your current project. There is no reason to reinvent the wheel—project management is tedious enough.

Utilizing Organizational Knowledge Repositories

Ideally, your organization has a method for cataloging, archiving, and retrieving information from past projects and work. The PMBOK calls these the “knowledge repositories.” This is most likely an electronic data storage and retrieval system, or it might just be a hallway closet full of past project files. Things the corporate knowledge base should provide include the following:

   Project files from past projects—specifically good records on schedule, cost, risk information, stakeholders, calendars, and overall project measurements

   Historical information and lessons learned about past project decisions, successes and failures, and the outcomes of risk management

   Issue and defect databases that document what issues, defects, or errors were discovered and how they were managed and resolved

   Configuration management databases for versioning software and hardware

   Financial databases with information on project costs, labor costs, cost overages, and other financial concerns

CERTIFICATION OBJECTIVE 2.03

Working with Organizational Systems

A system is a way of doing things. When I wash the dishes, I have a system for how I load the dishwasher that’s completely different from my wife’s approach. Or when I make purchases, track receipts, and do my company’s bookkeeping, I have a system that’s orderly and reasonable. Organizations, big and small, need a system that provides structure for how projects and operations complete the assigned work, strategies, and vision of the organization. The organizational system is unique to that company and may have been planned from the start or evolved over time through trial and error.

For your PMP exam, you should know that organizational systems provide structure and governance for how the project manager leads the project team and manages the work of project management. Your organization may have a clearly defined system, or it could be a loose collection of rules and policies that you operate within. In either case, there are management elements, such as permissions, work authorization, and employee discipline, that you abide by. A large organization, or even a small organization managing a large project, may have governance that acts as boundaries and rules for the project manager and stakeholders.

Systems aren’t defined by the project manager, but typically by the management and leadership of the organization. The entities, people, departments, and forms and processes within the system are the components of the system. System dynamics is a way of describing the relationship between the components, such as the relationship between the IT department and the accounting department. The project manager can find herself mired in office politics, bureaucracy, rules, policies, governance, and other components all while trying to achieve the project goals successfully and get the project done. Understanding how to navigate the system, its components, and governance takes time and finesse, but it’s the understanding of the formal and informal organizational systems that will help the project manager better influence the organization for the good of the project.

You’ll need to be familiar with the concept of organizational systems—and it’s not a tough concept to grasp—for your PMP exam. You won’t need to be proficient in organizational systems and theories, but you should recognize that the organizational systems in which a project manager must operate directly affect her amount of power and control over the projects.

Examine Organizational Governance Frameworks

Governance defines what you can and cannot do within an organization. It includes the rules, policies, procedures, and boundaries that you and your colleagues operate within. Governance describes how you operate within a system: the cultural norms, relationships, and organizational processes used to get things done. Consider purchasing, for example: Your organization likely has a process regarding how you contact vendors, move through contracting, sign off on the contracted work, and pay the vendor. This process is all part of the organizational governance framework specifically for your organization. Your framework is likely completely different from that of your competitors, a company in a different industry, and other businesses.

A framework is just a way of describing the structure you operate within. Frameworks can be packaged as the boundaries, swim lanes, or ways of doing business for the project manager. Every role, from project manager to manager, operates within the organization’s framework. The roles and responsibilities of each person fit into the framework, and the governance of the organization ensures that everyone is following the framework. Yes, governance and frameworks go together—they provide the structure and the rules. For your PMP, know that project governance and frameworks are the boundaries, rules, and space in which to operate for the project manager.

Consider Portfolio, Programs, and Project Governance

A project manager will deal with governance on several different levels. Portfolios are the collection of projects and programs that the organization invests in. Programs are a collection of projects working toward a common goal. In a program, projects are managed uniformly to achieve benefits that you likely wouldn’t get if each project were managed independently of the others. And projects, of course, are the temporary endeavors to create a unique product, service, condition, and result. For each of these items, a project governance defines the rules and policies that affect the project manager.

A project manager will have to address four project governance domains: alignment to corporate vision and strategy, risk, project performance, and communications. These four governance domains begin with portfolio management and are implemented into the programs and projects. That’s one of the key reasons why projects and programs must first align with the corporate vision and strategy, and contribute to business value in an organization.

What kind of an organization are you in? Does your organization complete projects for other entities? Does your organization treat every process of an operation as an operation? Or does your organization not know what to do with people like you: project managers?

Relying on General Management Skills

Management elements are the functions of a manager, including to some extent project managers. Through the governance framework, managers are expected to utilize varying levels of management skills. As a project manager, you’ll likely have some, if not all, of the following management elements as part of your role of a project manager:

   Delegation of project work to the project team

   Authority to assign resources to project work

   Expectations of respect for others, authority, and organizational rules

   Unity of command (one person is in charge)

   Unity of direction (one plan driven by one person)

   Clear communication channels

   Provision of materials to people as needed

   Fair and equal treatment of people on the project team and stakeholders

   Positive, optimistic personality

You cannot be an effective project manager without having some abilities as a manager. Makes sense, right? Get this: Management is focused on results. So to get your project team, vendors, and stakeholders to create project results, you should rely on the following:

   Planning for project strategy, tactics to achieve objectives, and operational planning

   Accounting and cash flow management

   Sales and marketing (within your organization and to stakeholders outside of the project)

   Procurement processes, including contracting procedures

   Logistics for travel, schedule, supply chain, and order fulfillment

   Human resource practices and procedures, including working within organizational structures; managing team personnel, compensation, and benefits; and helping project team members reach their career goals

   Industry-specific health and safety practices

   Working with information technology

It’s also beneficial to understand how and why your company undertakes projects. Some projects may be internal, others external. When it comes to project management, organizations fall into one or more of three models that affect the management elements of the project manager:

   Completing projects for others These entities swoop into other organizations and complete the project work based on specifications, details, and specification documents. Classical examples of these types of organizations include consultants, architectural firms, technology integration companies, and advertising agencies.

   Completing projects internally through a system These entities have adopted Management by Projects. Management by Projects means that every endeavor in the organization is a project. Organizations using Management by Projects have accounting, time, and management systems in place to account for the cost, time, and worth of each project.

   Completing projects as needed These non-project-centric entities can complete projects successfully but may not have the project systems in place to support projects efficiently. The lack of a project support system can cause the project to succumb to additional risks, lack of organization, and reporting difficulties. Some organizations may have special internal business units to support the projects in motion that are separate from the accounting, time, and management systems used by the rest of the organization.

Considering Organizational Culture

Imagine what it would be like to work as a project manager within a bank in downtown London, versus working as a project manager in a web development company in Las Vegas. Can you picture a clear difference in the expected cultures within these two entities? The organizational culture of an entity will have a direct influence on the success of a project. Organizational culture includes the following:

   Policies and procedures for managing projects in the organization

   Industry regulations, policies, rules, and methods for doing the work

   Values, beliefs, and expectations

   Views of authority, management, labor, and workers

   Work ethic

   Expectations on hours worked and contributions made

   Views toward organizational leadership

As you can imagine, projects with more risk (and expected reward) may be welcome in an organization that readily accepts entrepreneurial ventures rather than in an organization that is less willing to accept chance and risk. Project formality is typically in alignment with the culture of an organization.

Another influence on the progress of a project is the management style of an organization. A project manager who is autocratic in nature will face challenges and opposition in organizations that allow and encourage self-led teams. A project manager must take cues from management as to how the management style of a project should operate. In other words, a project manager emulates the management style of the operating organization.

As a rule, the larger the project, the more people will be involved. More people, as you might anticipate, means you’ve got more communications work to do as the project manager. Projects that span across the globe have additional challenges for communications: languages, time zones, technological barriers, and cultural differences. We’ll talk more about communications management in Chapter 10, but for now you’ll need to be aware that expectations for communications, available technologies to communicate, and the culture of the people involved in the communications are all part of the organization’s influence on the project’s success.

CERTIFICATION OBJECTIVE 2.04

Completing Projects in DifferentOrganizational Structures

Organizations are structured into one of ten models, each with an organizational structure that will affect the project in some aspect. The organizational structure will set the level of authority, the level of autonomy, and the reporting structure that the project manager can expect to have within the project. Figure 2-1 shows the level of authority in each of the organizational structures for the project manager and the functional manager.

FIGURE 2-1    The organizational structure affects the project manager’s authority.

I’ll discuss the following organizational structures:

   Organic or simple

   Functional (centralized)

   Multidivisional

   Weak matrix

   Balanced matrix

   Strong matrix

   Project-oriented (composite, hybrid)

   Virtual

   Hybrid

   PMO structure

Being able to recognize your organizational structure regarding project management will enable you to leverage and position your role effectively as a project manager.

Working in an Organic, or a Simple, Structure

In an organic, or a simple, organizational structure, the work groups within the organization are flexible. People work alongside one another regardless of their roles in the organization, and the project manager may have little to no authority over the project resources. The resources dedicated to the project are low, as the people working on the project willoscillate between their day-to-day work and the project work. The owner of the organization will be the individual in charge of the budget. In this structure, it’s also unlikely that the there’ll be any administrative staff to help the project manager.

Managing Projects in Functional Organizations

Functional organizations, sometimes called centralized organizations, are entities that have a clear division regarding business units and their associated responsibilities. For example, a functional organization may have an accounting department, a manufacturing department, a research and development department, a marketing department, and so on. Each department works as a separate entity within the organization, and each employee works in a separate department. In these centralized organizations, there is a clear distinction between an employee and a specific functional manager.

Functional organizations do complete projects, but the projects are specific to the function of the department the project falls into. For example, the IT department could implement new software for the finance department. The role of the IT department is separate from the role of the finance department, but the coordination between the two functional departments would be evident. Communication between departments flows through functional managers down to the project team. Figure 2-2 depicts the relationships between business departments and the flow of communication between projects and departments.

FIGURE 2-2    Projects in functional organizations route communications through the functional managers.

Project managers in functional organizations have the following attributes:

   Little authority

   Little autonomy

   Report directly to a functional manager

   May be known as project coordinators or team leaders

   Have a part-time role (the project team will also be part time as a result)

   May have little or no administrative staff to expedite the project management activities

   Not in control of the project budget (the functional manager manages the project budget)

Dealing with Multidivisional Structures

In this organization, there’ll likely be replication of functions for each division. For example, accounting may have its own IT staff, rather than following the centralized model of a pure functional organization. This structure is similar to the functional organization within each division. The project manager will have little authority and could be called a project coordinator rather than a project manager. The resources for the project will also be part time, though there could a part-time administrative staff to help the project manager. In this structure, the functional manager will also manage the project budget.

Managing in Matrix Structures

Matrix structures are organizations that utilize employees who perform a blend of departmental and project duties. This type of structure allows for project team members to be from multiple departments, yet all work toward the project completion. In these instances, the project team members have more than one boss. Depending on the number of projects a team member is participating in, he may have to report to multiple project managers as well as to his functional manager.

Weak Matrix

Weak matrix structures map closely to a functional organization. The project team may come from different departments, but the project manager reports directly to a specific functional manager. In weak matrix organizations, the project manager has the following attributes:

   Limited authority

   Management of a part-time project team

   Project manager’s role is part time

   May be known as a project coordinator or team leader

   May have part-time administrative staff to help expedite the project

   Not in control of the project budget (the functional manager manages theproject budget)

Balanced Matrix

A balanced matrix structure has many of the same attributes as a weak matrix, but the project manager has more time and power with regard to the project. A balanced matrix still has time-accountability issues for all the project team members, since their functional managers will want reports on their time spent on the project. Attributes of a project manager in a balanced matrix include the following:

   Low to moderate amount of authority

   Management of a part-time project team

   Part-time role as a project manager

   May have part-time administrative staff to help expedite the project

   Project manager and functional manager share management of the project budget

Strong Matrix

A strong matrix equates to a strong project manager. In a strong matrix organization, many of the same attributes for the project team exist, but the project manager gains power and time when it comes to project work. The project team may also have more time available for the project even though they may come from multiple departments within the organization. Attributes of a project manager in a strong matrix include the following:

   Moderate to high level of power

   Management of a part-time to nearly full-time project team

   Full-time role as a project manager

   Full-time administrative staff to help expedite the project

   Manage the project budget

Project-Oriented

A project-oriented organizational structure groups employees, collocated or not, by activities on a project. The project manager in a project-oriented structure may have complete, or very close to complete, power over the project team. Project managers in a project-oriented structure enjoy a high level of autonomy over their projects, but they also have a higher level of responsibility regarding the project’s success. Sometimes, project-oriented structures are created in a composite or hybrid structure; this means although the organization is typically a functional structure, for example, for a project, the organization will create a project-oriented project manager and team.

Project managers in a project-oriented structure have the following attributes:

   High to complete authority over the project team

   Work full-time on the project with their team (though there may be some slight variation)

   A full-time administrative staff to help expedite the project

   Manage the budget

Serving in a Virtual Organization

A virtual organization utilizes a network structure within the organization. Points of contact represent the different departments or lines of business within the organization. Communication can be a challenge in a virtual organization, as messages are filtered through the point of contact for each department or stakeholder group. The project manager has low authority over the project team and shares authority over the project budget with the functional manager. The project manager could be full time or part time, and the project team members are likely to be working part time on the project. Administrative staff for the project could also be part time or full time—it depends on the organization.

Managing Projects in Hybrid Organizations

On paper, these organizational structures look great. In reality, there are very few companies that map only to one of these structures all the time. For example, a company using the functional model may create a special project consisting of talent from many different departments. Such a project team reports directly to a project manager and will work on a high-priority project for its duration. These entities are a composite, called hybrid organizations, in that they may be a blend of multiple organizational types. Figure 2-3 shows a sample of a hybrid structure. Although the AQQ Organization in the figure operates as a traditional functional structure, they’ve created a special project-oriented project in which each department has contributed resources to the project team.

FIGURE 2-3    Hybrid structures are a blend of traditional organizational structures.

Because hybrid structures are unique to each organization, it’s impossible to define the level or authority and the project manager’s role in a project. In some organizations using a hybrid model, the project manager may have total control over the team and the project budget, while other organizations may allocate the project manager authority over the team, but keep the budget management for the functional manager.

Operating Under Project Management Offices

A project management office (PMO) organizes and manages control over all projects within an organization. A PMO is also known as a program management office, project office, or sometimes, the program office. (And I’m sure some project managers have other names for them that won’t be on the PMP exam.)

PMOs usually coordinate all aspects, methodology, and nomenclature for project processes, templates, software, and resource assignment. Ideally, a PMO creates a uniform approach within an organization so that all projects, regardless of their discipline, technology, or purpose, are managed with the same approach. The PMO can help project managers share resources (people, facilities, and equipment) across projects, offer coaching and communication, help with change control and stakeholder management, and help resolve issues.

Besides creating a uniform approach to project management within an organization, a PMO provides support to the project managers. The support the PMO gives will vary, of course, from organization to organization. Typically, project managers who act within a PMO can expect training, software, templates, standardized project management approaches, and mentoring.

You should be familiar with three general types of PMOs for your exam:

   Directive PMO Manages and controls all projects within the organization. The PMO control is considered high.

   Controlling PMO Defines project governance through project management frameworks, templates, forms, project management activities, and communications. The PMO control is considered moderate.

   Supportive PMO Acts as a consultative role by offering advice, best practices, lessons learned, forms and software, and project information from similar projects. The PMO control is low.

PMOs have an advantage over decentralized project management: risk and communication centralization. All projects have risks, and a PMO can centrally track and monitor all risks within all projects and take advantage and prepare for risks that may, or may not, come to fruition. Thus, a PMO can create a risk database to track pending and past risks and plan accordingly.

On the communications front, a PMO can centralize communication among project managers, project sponsors, managers, and other stakeholders. A centralized communication center can alleviate the demand on project managers to communicate with stakeholders, as all communications can flow through the PMO rather than the individual project manager.

Table 2-1 outlines the benefits and drawbacks of various organizational types.

Table 2-1 Benefits and Drawbacks of Various Organizational Types

CERTIFICATION SUMMARY

This chapter detailed the enterprise environmental factors, organizational process assets, knowledge repositories you’ll utilize, and different organizational structures project managers operate within. The combination of these things controls the amount of authority the project manager has over project resources, the decisions you’ll make in the project, and what you’re allowed, or not allowed, to do as a project manager.

Projects must operate within the organizational structure. Organizational structures control how the project manager can obtain resources, the level of authority the project manager can expect, and the participation of the project team. There are ten organizational structures:

   Organic or simple

   Functional (centralized)

   Multidivisional

   Weak matrix

   Balanced matrix

   Strong matrix

   Project-oriented (composite, hybrid)

   Virtual

   Hybrid

   PMO structure

You’ll need to recognize the characteristics of these ten different organizational structures for the PMP exam. Questions could be based on scenarios in which you’re operating in a specific type of structure that would affect the best answer. This can prove challenging for some PMP candidates as they might be tempted to choose how they’d solve the question based on where they work—not a good idea for the PMP exam. Understand the structure to answer the question best based on the structure type, not on your organization.

KEY TERMS

To pass the PMP exam, you will need to memorize these terms and their definitions. For maximum value, create your own flashcards based on these definitions and review them daily.

controlling PMO   Defines project governance through project management frameworks, templates, forms, project management activities, and communications. The PMO control is considered moderate.

cultural norm   The accepted practices, culture, ideas, vision, and nature of an organization.

dedicated project team   This project team works full time on the project for the duration of the project.

directive PMO   Manages and controls all projects within the organization. The PMO control is considered high.

enterprise environmental factors   Elements that create the boundaries for the project manager. These may help or hinder the project manager’s ability to navigate within the project. Examples include rules, regulations, industry standards, and organizational procedures the project manager is obliged to follow, and the project team has no control over them.

external enterprise environmental factors   Factors that are outside of the organization’s control but confine the decision for the project manager and the project. For example, laws and regulations are external enterprise environmental factors that directly affect the project manager.

functional managers   The managers of the permanent staff in each organizational department, line of business, or function such as sales, finance, and technology. Project managers and functional managers interact on project decisions that affect functions, projects, and operations.

functional organizations   Entities that have a clear division regarding business units and their associated responsibilities. Project managers in functional organizations have little power and report to the functional managers. This organization groups staff according to their expertise—for example, sales, marketing, finance, and information technology. Project managers in functional structures report to functional managers, and the project team exists within one department.

hybrid organizational structure   The organization utilizes a mix of other project structures to create a project structure for a specific project. For example, an organization could be a weak matrix, but for one high-priority project, it shifts to a project-centric environment.

internal enterprise environmental factors   Factors unique to an organization that confine the project decisions for the project manager and the project team.

matrix structure   An organization that groups staff by function but openly shares resources on project teams throughout the organization. Project managers in a matrix structure share the power with functional management. Three types of matrix structures—weak, balanced, and strong—describe the amount of authority granted to the project manager.

multidivisional structure   Replication of functions for each division. This structure is similar to the functional organization within each division. The project manager will have little authority and could be called a project coordinator rather than a project manager.

operations manager   Deal directly with the income-generating products or services the company provides. Projects often affect the core business, so these managers are stakeholders in the project.

organic organization structure   Sometimes called a simple organization structure. The work groups within the organization are flexible. People work alongside one another regardless of their roles in the organization, and the project manager may have little to no authority over the project resources.

organization knowledge repositories   Databases of past project files, historical information, lessons learned, issue and defect databases, financial databases, and other knowledge that can be quickly accessed for the current project.

organizational governance frameworks   The structure and approach to managing a project within your organization. Governance framework describes how you operate within a system: the cultural norms, relationships, and organizational processes to get things done.

organizational process assets   Resources that have been created to assist the project manager in better managing the project. Examples include historical information, forms, project approaches, defined procedures, and templates.

organizational systems   Provide structure and governance for how the project manager leads the project team and manages the work of project management.

part-time project team   The project team works on the project for a percentage of their scheduled work time. The project team may work on core operations and other projects in addition to the current project.

portfolio management review board   A collection of organizational decision-makers, usually executives, who review proposed projects and programs for their value and return on investment for the organization.

product life cycle   The unique life, duration, and support of the thing a project creates. A product life cycle is separate from the project life cycle.

program manager   Coordinates the efforts of multiple projects working together in the program. Programs comprise projects, so it makes sense that the program manager would be a stakeholder in each of the projects within the program.

project governance   Defines the rules for a project; it’s up to the project manager to enforce the project governance to ensure that the project reaches its objectives. The project management plan defines the project governance and how the project manager, project team, and organization will follow the rules and policies within the project.

project management office (PMO)   A stakeholder of the project, because it supports the project manager and is responsible for the project’s success. PMOs typically provide administrative support, training for the project manager, resource management for the project team and project staffing, and centralized communication.

project management team   A group of people who are involved with managing the project.

project manager   The person accountable for managing the project and guiding the team through the project phases to completion.

project-oriented structure   Grouping employees, collocated or not, by activities on a particular project. The project manager in a project-oriented structure may have complete, or very close to complete, power over the project team.

project sponsor   A person or group that authorizes the project and ensures that the project manager has the necessary resources, including monies, to get the work done. The project sponsor is within the performing organization and has the power to authorize and sanction the project work; this person is ultimately accountable for the project’s success.

project team   The collection of individuals who will work together to ensure the success of the project. The project manager works with the project team to guide, schedule, and oversee the project. The project team completes the project work.

supportive PMO   Acts as a consultative role by offering advice, best practices, lessons learned, forms and software, and project information from similar projects. The PMO control is low.

virtual organizational structure   The organization uses a network structure with points of contact for each group represented in the project. The project manager may have low to moderate authority over the project resources and share authority over the project budget with the functional manager.

TWO-MINUTE DRILL

Utilizing Enterprise Environmental Factors

   Enterprise environmental factors directly or indirectly influence how the project manager is allowed to manage the project.

   Internal enterprise environmental factors are factors that the organization has established, such as boundaries and policies.

   External enterprise environmental factors are factors outside the organization’s control, such as laws and regulations, that affect how the project manager will manage the project.

Leveraging Organizational Process Assets

   Organizational process assets are items that have been created prior to the current project that the project manager can utilize to manage the current project better.

   Past project files, forms, and templates are common examples of organizational process assets.

   Knowledge repositories are databases of past financial information, errors and issues, lessons learned, and configuration management.

Working with Organizational Systems

   Organizational systems define how work is completed within an organization. It’s the system in place to authorize work, complete organization processes, and provides structure within the organization.

   The project manager’s authority over the project team is determined by the enterprise environmental factors and the organizational structure. Project-oriented organizations allow the project manager the most authority, while functional organizations give the authority to the functional manager. The strong, balanced, and weak matrix structures describe the anticipated amount of authority the project manager has over the project team.

   Systems aren’t defined by the project manager, but typically by the management and leadership of the organization. The entities, people, departments, and forms and processes within the system are the components of the system. System dynamics is a way of describing the relationship between the components.

   Governance defines what the project manager can and cannot do within an organization. It is the rules, policies, procedures, and boundaries that the organizational employees operate within. Governance describes how you operate within a system: the cultural norms, relationships, and organizational processes used to get things done.

Completing Projects in Different Organizational Structures

   Organizational structures have direct influence over the project. Organizational structures determine the procedures that the project manager must follow and the amount of authority the project manager possesses. A project management office may oversee project management activities and provide additional support in any of the organizational structures. The organizational types and the level of authority a project manager can expect are shown in the following table:

   Beyond the concept of completing the work, project managers must also consider the social, political, economic, and environmental influences that may sway a project. Specifically, the project manager must evaluate the project to determine its social, political, economic, and environmental impacts—as well as note the project’s surroundings. The project manager may have some external guidance in these areas in the form of standards and regulations.

   Standards are guidelines that are generally followed but not enforced or mandated. Regulations come in the form of laws and industry demands that are enforced by various governing bodies.

SELF TEST

1.   You are the project manager for the application deployment project. This project will deploy software to 450 sites throughout North America and in Europe. Because this project will span multiple countries, you must consider the limitations imposed by communications, accessing resources, and other concerns. These international concerns that limit your choices in the project are known as which of the following?

A.   Internal enterprise environmental factors

B.   External enterprise environmental factors

C.   Cultural norms

D.   Organizational process assets

2.   You are the project manager for your organization and you’re planning a project in consideration of some regulations in your industry. These regulations are also known as which of the following?

A.   Constraints

B.   External enterprise environmental factors

C.   Internal enterprise environmental factors

D.   Industry organizational process assets

3.   You are the project manager of the NHQ Project. Your project team consists of experts from different departments within your organization. What type of organizational structure is this?

A.   Virtual

B.   Weak matrix

C.   Noncollocated

D.   Dedicated

4.   Beth is a new project manager for her company, and she’s working with her project team to develop the project management plan. Beth knows that she must rely on several different skills to make her first project successful. Of the following management skills, which will she use most?

A.   Leading

B.   Communicating

C.   Influencing the organization

D.   Negotiating

5.   Harold is the manager of the manufacturing unit for your company, and he’ll be a key stakeholder on your upcoming project. To get to know Harold better, you’re having lunch with him and discussing some of the goals of the upcoming project. Harold doesn’t quite understand what you do as a project manager, so you explain the concept to him. Managing a project is best described as which one of the following?

A.   Establishing direction

B.   Functionally controlling the project team and stakeholders

C.   Consistently producing key results expected by stakeholders

D.   Motivating and inspiring the project team to produce results that are expected by project stakeholders

6.   You are the project manager of the Server Deployment Project for your company. You’re meeting with the key stakeholders to gather the requirements and review the intent of the project. You know that you’ll have to meet with the stakeholders throughout the project and their influence can help or hinder the project’s success. You’d like to create a solid communications management plan for the project. Where can you access another communications management plan to use as a template?

A.   Internal enterprise environmental factors

B.   External enterprise environmental factors

C.   Organizational process assets

D.   Other current projects in the organization

7.   Which one of the following is an example of a physical enterprise environmental factor that could affect a project?

A.   Weather

B.   Regulations

C.   PMO

D.   Past project files

8.   You are the project manager for your organization. Influencing your organization requires which of the following?

A.   An understanding of the organizational budget

B.   Research and documentation of proven business cases

C.   An understanding of formal and informal organizational systems

D.   Positional power

9.   Management has asked you, the project manager, to create a method to store your project information electronically. Your project records will help future project teams to make better decisions and can also be used to support the product that your project is creating. What does management want to create for your project?

A.   Organizational process assets

B.   Organizational knowledge repository

C.   Project database

D.   Project management plan

10.   What does an organizational system accomplish for projects within any organizational structure?

A.   Defines the roles and responsibilities of each project team member

B.   Provides structure and governance for the project manager

C.   Identifies regulations and standards that the project manager must adhere to

D.   Provides accountability for the project manager, the project team, and project stakeholders

11.   You are the project manager of the JHK Project and working with the IT department and the accounting department on some project requirements. There is a relationship and dynamic between IT and accounting that is likely to affect the project requirements. What is this relationship between these two components called?

A.   Business links

B.   Matrix

C.   System dynamics

D.   Functional structuring

12.   An organization has created a program for a new endeavor. The program manager is establishing all the rules, policies, and approved approaches for project management within the program. What term best describes the rules, policies, and approved project management approaches that the program manager is creating?

A.   Framework

B.   Program governance

C.   Constraints

D.   Program threshold management

13.   You are the project manager for the ERP Project. Your organization uses a PMO. The primary purpose of a project office is to do which of the following?

A.   Support the project manager

B.   Support the project sponsor

C.   Support the project team

D.   Identify the stakeholder objectives

14.   An organization has multiple departments, and within each department is an IT structure that supports only that department. IT projects are launched within one department and not all departments in the organization as the whole. What type of organizational structure is this?

A.   Multidivisional structure

B.   Functional structure

C.   Hybrid structure

D.   Strong matrix structure

15.   You are the project manager of a project. The project is nearing its completion and the project team is experiencing some anxiety as to what their next project will be. What type of organizational structure are you operating in?

A.   Matrix

B.   Project-oriented

C.   Functional

D.   Multidivisional

16.   What type of project management office manages and controls all projects within the organization?

A.   Controlling project management office

B.   Supportive project management office

C.   Directive project management office

D.   Functional project management office

17.   Beth is a project manager in small startup company. The project team is loosely organized and people chip in to help however they can, based on their skills and the work that needs to be completed. The organization owner, Sarah, has control over the project resources. What structure is Beth likely operating in?

A.   Organic

B.   Functional

C.   Weak matrix

D.   Strong matrix

18.   An organization that typically operates as a weak matrix has decided that for a high-priority project, the team will work on the project full time. In addition, the project manager will manage just this one project full time. What type of organization structure is this?

A.   Simple

B.   Project-oriented

C.   Strong matrix

D.   Hybrid

19.   Henry, the project manager of the MHB Project, is operating within a multidivisional organizational structure. Who will make decisions about the project budget?

A.   Henry

B.   Functional manager

C.   Program manager

D.   Portfolio manager

20.   A company has hired you as a project manager to lead a new software development project. You have an assigned budget and several milestones in the project. The project sponsor has asked you to wait on launching the project execution a month or two because of some unsettling news in the marketplace. The marketplace conditions are best described as which one of the following?

A.   High costs and high demand for resources

B.   External organizational process assets

C.   Internal enterprise environmental factors

D.   External enterprise environmental factors

21.   All of the following are organizational process assets that can be used within a project except for which one?

A.   Templates for project documents

B.   Historical information

C.   Regulations

D.   Performance measurements

22.   Tracey is the project manager of the KHG Project. Her organization is a classic functional environment. Her level of authority as a project manager can be best described as which of the following?

A.   Low

B.   Moderate

C.   Balanced

D.   High

23.   Project team members are most likely to work full time on a project in which of the following organizational structures?

A.   Functional

B.   Weak matrix

C.   Organizational

D.   Project-oriented

24.   A project manager is operating in a weak matrix. She has asked management for information from a past project that is similar to her project. Where is the best place for the project manager to find this information?

A.   Organizational knowledge repository

B.   Organizational process assets

C.   Internal enterprise environmental factors

D.   From the project manager of the past project

25.   Stacey is the project manager of the GBN Project for her company. She’ll be using several templates for a project, but she’s not certain where these templates should originate. Where can a project manager usually expect to receive templates?

A.   Commercial databases

B.   The project management office

C.   The project sponsor

D.   PMIS

SELF TEST ANSWERS

1.   You are the project manager for the application deployment project. This project will deploy software to 450 sites throughout North America and in Europe. Because this project will span multiple countries, you must consider the limitations imposed by communications, accessing resources, and other concerns. These international concerns that limit your choices in the project are known as which of the following?

A.   Internal enterprise environmental factors

B.   External enterprise environmental factors

C.   Cultural norms

D.   Organizational process assets

2.   You are the project manager for your organization and you’re planning a project in consideration of some regulations in your industry. These regulations are also known as which of the following?

A.   Constraints

B.   External enterprise environmental factors

C.   Internal enterprise environmental factors

D.   Industry organizational process assets

3.   You are the project manager of the NHQ Project. Your project team consists of experts from different departments within your organization. What type of organizational structure is this?

A.   Virtual

B.   Weak matrix

C.   Noncollocated

D.   Dedicated

4.   Beth is a new project manager for her company, and she’s working with her project team to develop the project management plan. Beth knows that she must rely on several different skills to make her first project successful. Of the following management skills, which will she use most?

A.   Leading

B.   Communicating

C.   Influencing the organization

D.   Negotiating

5.   Harold is the manager of the manufacturing unit for your company, and he’ll be a key stakeholder on your upcoming project. To get to know Harold better, you’re having lunch with him and discussing some of the goals of the upcoming project. Harold doesn’t quite understand what you do as a project manager, so you explain the concept to him. Managing a project is best described as which one of the following?

A.   Establishing direction

B.   Functionally controlling the project team and stakeholders

C.   Consistently producing key results expected by stakeholders

D.   Motivating and inspiring the project team to produce results that are expected by project stakeholders

6.   You are the project manager of the Server Deployment Project for your company. You’re meeting with the key stakeholders to gather the requirements and review the intent of the project. You know that you’ll have to meet with the stakeholders throughout the project and their influence can help or hinder the project’s success. You’d like to create a solid communications management plan for the project. Where you can access another communications management plan to use as a template?

A.   Internal enterprise environmental factors

B.   External enterprise environmental factors

C.   Organizational process assets

D.   Other current projects in the organization

7.   Which one of the following is an example of a physical enterprise environmental factor that could affect a project?

A.   Weather

B.   Regulations

C.   PMO

D.   Past project files

8.   You are the project manager for your organization. Influencing your organization requires which of the following?

A.   An understanding of the organizational budget

B.   Research and documentation of proven business cases

C.   An understanding of formal and informal organizational systems

D.   Positional power

9.   Management has asked you, the project manager, to create a method to store your project information electronically. Your project records will help future project teams to make better decisions and can also be used to support the product that your project is creating. What does management want to create for your project?

A.   Organizational process assets

B.   Organizational knowledge repository

C.   Project database

D.   Project management plan

10.   What does an organizational system accomplish for projects within any organizational structure?

A.   Defines the roles and responsibilities of each project team member.

B.   Provides structure and governance for the project manager.

C.   Identifies regulations and standards that the project manager must adhere to.

D.   Provides accountability for the project manager, the project team, and project stakeholders.

11.   You are the project manager of the JHK Project and working with the IT department and the accounting department on some project requirements. There is a relationship and dynamic between IT and accounting that is likely to affect the project requirements. What is this relationship between these two components called?

A.   Business links

B.   Matrix

C.   System dynamics

D.   Functional structuring

12.   An organization has created a program for a new endeavor. The program manager is establishing all of the rules, policies, and approved approaches for project management within the program. What term best describes the rules, policies, and approved project management approaches that the program manager is creating?

A.   Framework

B.   Program governance

C.   Constraints

D.   Program threshold management

13.   You are the project manager for the ERP Project. Your organization uses a PMO. The primary purpose of a project office is to do which of the following?

A.   Support the project manager

B.   Support the project sponsor

C.   Support the project team

D.   Identify the stakeholder objectives

14.   An organization has multiple departments, and within each department is an IT structure that supports only that department. IT projects are launched within one department and not all departments in the organization as the whole. What type of organizational structure is this?

A.   Multidivisional structure

B.   Functional structure

C.   Hybrid structure

D.   Strong matrix structure

15.   You are the project manager of a project. The project is nearing its completion and the project team is experiencing some anxiety as to what their next project will be. What type of organizational structure are you operating in?

A.   Matrix

B.   Project-oriented

C.   Functional

D.   Multidivisional

16.   What type of project management office manages and controls all projects within the organization?

A.   Controlling project management office

B.   Supportive project management office

C.   Directive project management office

D.   Functional project management office

17.   Beth is a project manager in small startup company. The project team is loosely organized and people chip in to help however they can, based on their skills and the work that needs to be completed. The organization owner, Sarah, has control over the project resources. What structure is Beth likely operating in?

A.   Organic

B.   Functional

C.   Weak matrix

D.   Strong matrix

18.   An organization that typically operates as a weak matrix has decided that for a high-priority project, the team will work on the project full time. In addition, the project manager will manage just this one project full time. What type of organization structure is this?

A.   Simple

B.   Project-oriented

C.   Strong matrix

D.   Hybrid

19.   Henry, the project manager of the MHB Project, is operating within a multidivisional organizational structure. Who will make decisions about the project budget?

A.   Henry

B.   Functional manager

C.   Program manager

D.   Portfolio manager

20.   A company has hired you as a project manager to lead a new software development project. You have an assigned budget and several milestones in the project. The project sponsor has asked you to wait on launching the project execution a month or two because of some unsettling news in the marketplace. The marketplace conditions are best described as which one of the following?

A.   High costs and high demand for resources

B.   External organizational process assets

C.   Internal enterprise environmental factors

D.   External enterprise environmental factors

21.   All the following are organizational process assets that can be used within a project except for which one?

A.   Templates for project documents

B.   Historical information

C.   Regulations

D.   Performance measurements

22.   Tracey is the project manager of the KHG Project. Her organization is a classic functional environment. Her level of authority as a project manager can be best described as which of the following?

A.   Low

B.   Moderate

C.   Balanced

D.   High

23.   Project team members are most likely to work full time on a project in which of the following organizational structures?

A.   Functional

B.   Weak matrix

C.   Organizational

D.   Project-oriented

24.   A project manager is operating in a weak matrix. She has asked management for information from a past project that is similar to her project. Where is the best place for the project manager to find this information?

A.   Organizational knowledge repository

B.   Organizational process assets

C.   Internal enterprise environmental factors

D.   From the project manager of the past project

25.   Stacey is the project manager of the GBN Project for her company. She’ll be using several templates for a project, but she’s not certain where these templates should originate. Where can a project manager usually expect to receive templates?

A.   Commercial databases

B.   The project management office

C.   The project sponsor

D.   PMIS