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1 - INTRODUCTION

1.5.2.2 the Link Between Project Management and organizational Governance

Projects (and programs) are undertaken to achieve strategic business outcomes, for which many organizations 1
now adopt formal organizational governance processes and procedures. Organizational governance criteria
can impose constraints on projects—particularly if the project delivers a service which will be subject to strict
organizational governance.

Because project success may be judged on the basis of how well the resultant product or service supports
organizational governance, it is important for the project manager to be knowledgeable about corporate/
organizational governance policies and procedures pertaining to the subject matter of the product or service
(e.g., if an organization has adopted policies in support of sustainability practices and the project involves
construction of a new office building, the project manager should be aware of sustainability requirements related
to building construction.)

1.5.2.3 the relationship Between Project Management and organizational Strategy

Organizational strategy should provide guidance and direction to project management—especially when one
considers that projects exist to support organizational strategies. Often it is the project sponsor or the portfolio or
program manager who identifies alignment or potential conflicts between organizational strategies and project goals
and then communicates these to the project manager. If the goals of a project are in conflict with an established
organizational strategy, it is incumbent upon the project manager to document and identify such conflicts as early
as possible in the project. At times, the development of an organizational strategy could be the goal of a project
rather than a guiding principle. In such a case, it is important for the project to specifically define what constitutes
an appropriate organizational strategy that will sustain the organization.

1.6 Business Value

Business value is a concept that is unique to each organization. Business value is defined as the entire value
of the business; the total sum of all tangible and intangible elements. Examples of tangible elements include
monetary assets, fixtures, stockholder equity, and utility. Examples of intangible elements include good will, brand
recognition, public benefit, and trademarks. Depending on the organization, business value scope can be short-,
medium-, or long-term. Value may be created through the effective management of ongoing operations. However,
through the effective use of portfolio, program, and project management, organizations will possess the ability to
employ reliable, established processes to meet strategic objectives and obtain greater business value from their
project investments. While not all organizations are business driven, all organizations conduct business-related
activities. Whether an organization is a government agency or a nonprofit organization, all organizations focus on
attaining business value for their activities.

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©2013 Project Management Institute. A Guide to the Project Management Body of Knowledge (PMBOK Guide) – Fifth Edition 15

Licensed To: Jorge Diego Fuentes Sanchez PMI MemberID: 2399412
This copy is a PMI Member benefit, not for distribution, sale, or reproduction.