Chapter 2 presents an overview of the importance of strategic planning and the process for developing a strategic plan. Typical problems encountered when strategy and projects are not linked are noted. A generic methodology that ensures integration by creating very strong linkages of project selection and priority to the strategic plan is then discussed. | Organization Strategy and Project Selection Chapter 2 Why Project Managers Need to Understand the Strategic Management Process Changes in the Organization’s Mission and Strategy Project managers must respond to changes with appropriate decisions about future projects and adjustments to current projects. Project managers who understand their organization’s strategy can become effective advocates of projects aligned with the firm’s mission. The Strategic Management Process: An Overview Strategic Management Provides the theme and focus of the future direction for the firm. Responding to changes in the external environment—environmental scanning 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. Strategic Management Process (cont’d) Four of Activities of the Strategic Management Process Review and define the organizational mission. Set . | Organization Strategy and Project Selection Chapter 2 Why Project Managers Need to Understand the Strategic Management Process Changes in the Organization’s Mission and Strategy Project managers must respond to changes with appropriate decisions about future projects and adjustments to current projects. Project managers who understand their organization’s strategy can become effective advocates of projects aligned with the firm’s mission. The Strategic Management Process: An Overview Strategic Management Provides the theme and focus of the future direction for the firm. Responding to changes in the external environment—environmental scanning 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. Strategic Management Process (cont’d) Four of Activities of the Strategic Management Process Review and define the organizational mission. Set long-range goals and objectives. Analyze and formulate strategies to reach objectives. Implement strategies through projects. Strategic Management Process FIGURE Characteristics of Objectives EXHIBIT 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 Project Portfolio Management Problems The Implementation Gap The lack of understanding and consensus on strategy among top management and middle-level (functional) managers who independently implement the strategy. Organization Politics Project selection is based on the persuasiveness and power of people advocating the projects. Resource Conflicts and Multitasking The multiproject environment creates interdependency relationships of shared resources which results in the starting, stopping, and restarting projects.
