Page 363 - Global Project Management Handbook

18-4 MANAGEMENT OF THE PROJECT-ORIENTED COMPANY

THE PROJECT-ORIENTED COMPANY: A CONSTRUCT

In order to identify a company as a project-oriented company, the management of projects
and programs within the organization and the strategic, structural, and cultural prerequi-
sites for their performance are considered. Of course, a company also can be viewed from
other perspectives. However, the project-orientation view provides a possibility for con-
structing a new organizational reality. By viewing an organization as a project-oriented
organization, new possibilities for management intervention can be created by which the
potential for the successful performance of projects and programs can be increased.
Project-oriented companies are characterized by projects and programs. At any given
time, a number of projects can be started, performed, closed down, or stopped. In this
way, a state of balance is created that should ensure the continuous development of the
company and its survival.
The more varied the projects and programs of a project-oriented company are, the more
complex the management of the organization will be. This depends on the dynamics and
complexity of the individual projects, as well as on the relationships between the projects.
The project-oriented company has the following characteristics:

● Management by projects is an explicit organizational strategy.
● Projects and programs are used as temporary organizations.
● Networks of projects, chains of projects, and project portfolios are objects of consideration
for the management.
● Project management, program management, and project portfolio management are spe-
cific business processes.
● Know-how provision and assurance takes place in expert pools.
● Project management competence is ensured by a project management office and a project
portfolio group.
● A new management paradigm is applied that is characterized by teamwork, process ori-
entation, and empowerment.

Not only companies but also subsystems of companies, such as divisions, business units,
and profit centers, can be viewed as project-oriented organizations. Therefore, the terms
project-oriented company and project-oriented organization can be used synonymously.

A project-oriented company is a company that has at its disposal specific strategies,
structures, and cultures for the professional management of projects, programs, and project
portfolios. The creation of the requisite “organizational fit” between these strategies,
structures, and cultures poses a particular management challenge (Fig. 18.1).

“MANAGEMENT BY PROJECTS” AS AN
ORGANIZATIONAL STRATEGY

The engineering organization Fluor Daniel views projects “. . . as a way of conducting its
business and, of late, as a way of improving its internal tasks. . . . Fluor Daniel is able to
conduct its business effectively in a decentralized, networked organizational atmosphere”
(Thatcher, 1990).
The project-oriented company simultaneously performs projects for internal and external
customers, small projects as well as projects of medium or large scope, and projects with dif-
ferent objectives. Project-oriented companies view projects and programs as a strategic