How do organizations affect the projects and how does project management influence organizations?

Every project is implemented within a certain type of home organization. This is true even for project organizations that are set up specifically for a certain project. In many cases, the culture and environment of the home organization influence the remote project development.

One of the strongest factors affecting every project implementation is the organizational structure within which it is being realized. We have described the three major types of organization: functional, project, and matrix. Any other organization can be determined more or less to be a derivation of one of these three types.

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Of the three types of organizations, the functional and the project represent the extremes in the range of possible variants from the aspect of a lack of or an excess of project orientation. All the organizations that fit in between the two extremes can be determined by a certain type of a matrix organization: from weak through balanced to strong.

There are a number of other organizational factors that influence project implementation. Organizational culture and accepted practices set up standards for a project manager in order to be most successful. Organizational systems, including the way a company is managed and the way the company's services are organized, also have a great influence on projects. Of course, the projects can best be implemented within an organizational system that is project-oriented. When this system is not in place and all the projects have to be carried out within certain general systems, it sometimes requires the project to develop parallel internal systems of expense collection, work hours reporting, and so on.

Of course, the organization that has offices in different countries and is carrying out multinational projects also requires some special structures to be in place. This is especially true in providing communications, choosing communication channels, and creating a workable atmosphere of involvement inside the project team.

As much as projects are being influenced by their organizations, they in turn influence the strategic organizational development and the company's growth. Classical project management grew from construction, defense, and information technology projects and therefore considers project management methodology to be applied mostly to external client-oriented projects of the company. Currently, although the importance of the external project stays high, many organizations are looking at other applications of the project management methodology that have to do with internal changes in the organizations. Indeed, the ability for an organization to change is becoming a critical factor in surviving in the marketplace . This was well demonstrated by Japanese companies when they were breaking into the American automotive, electronics, and other markets. It turns out that project management represents the best methodology for implementing organizational change. Therefore, the ability of the company to introduce and endorse project management methodology is becoming a factor in gaining significant strategic advantages over competitors .

What are the major spheres for change and the problems associated with them?

Any change event can be efficient only if the implementation takes into consideration and keeps a harmonic balance among the three spheres of change:

Personal Sphere . Introducing any change will always be related to overcoming the inertia of the old type of thinking and the old way of doing things. This is especially true when change is directly related to restructuring the organization or changing management approaches.
Organizational Sphere . Even when the change is not directly related to global structural change, it inevitably results in developing new or getting rid of the old organizational relations and elements. Therefore it is important to provide harmonic interaction and balancing of all the old and new elements both during the change and after it.
Technical Sphere . The technological sphere of production and management processes is important because it also changes during the process. We must consider the technical support required by the change itself.

Even if the change is occurring in only one of the three spheres, it always influences the other two.

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Any changes normally have to overcome a certain resistance from the organization's personnel.

The major causes for the reluctance of personnel to endorse change include:

Fear of the unknown.
Traditional thinking—"If something works, don't change it."
Lack of understanding of why a change is needed in the first place.
Lack of belief in successful change—especially if such efforts have been undertaken and failed in the past.
Conscious opposition to change based on the knowledge that it can hurt them.
General indifference.

In order to combat the resistance, it is important to remember how difficult it may be to implement the best-planned change event because of the resistance of the personnel involved.

The other important activities that have to be undertaken in order to reduce stress and increase appreciation of change include:

Informing: Telling everybody what is going to be changed and why it is necessary.
Increasing Interest: Explaining how the things that will be changed will be better, personally , for each employee.
Comforting: Explaining that the changes will not hurt—at least not those employees who are really interested in the company's work.
Acting from Inside: Finding and supporting the change advocates at all levels of the organization.
Providing Support: Finding and supporting the leaders who are ready for change—formal as well as informal, indicating the leaders who may act against it and neutralizing them by either moving them or blocking their actions.

The change process does not happen at once. It normally has four phases:

Passive Resistance . When people act as if they are "thunderstruck," it is often seen as no reaction at all to the change event to come and can be wrongly interpreted by management as no resistance. If, due to this misunderstood impression on the part of management, no information nor explanation is communicated to the people, the first phase is quickly changed to the second.
Active Resistance . When people realize that the changes have started, they enter a stress condition characterized by strong feelings of fear, threat, and anger. This is very often a failure spot for changes; therefore the management reaction should be very careful and include lots of explanations and seem like forcing.
Understanding . Once the second phase is past, people start entering the third phase of understanding. This is when the employees start understanding the nature of the change, its necessity, and its positive impacts. The level of stress decreases and the stress changes to a less dangerous type. It is important for management to move into explanations of everyone's roles and functions in the change process and the new structure.
Acceptance . If phase three is carried out correctly, the last phase of acceptance follows . The new process is understood and endorsed with major resisting forces either changing their minds or being removed. It is important to remember that this is the stage at which the new values of an organization are formed and accepted.

Any organizational change is related to the transformation of the company's organizational structure. The scope of this transformation has to be carefully planned in advance regardless of the fact that some details can actually be planned and introduced on the way.

The process of forming the vision of a new organization is called organizational planning.

The goals and objectives of organizational planning are:

To set up the scope of transition in the organizational sphere
To get the organization into a position of primary correspondence to the company's new strategy
To determine responsibilities, accountability, and reporting structure
To provide liaison and efficient coordination between departments/divisions
To formulate new job descriptions

Organizational planning is to be carried out in the following major spheres:

Structure: Functions, processes, work groups, hierarchy levels, personnel structure, and accountability
Decision-Making and Responsibilities: The processes of making key decisions, governing principles, and responsibilities
Roles, Assumptions, and Job Functions: Key organizational roles, distributing responsibilities for implementing groups of work, and determining tasks correspondent to work functions
Planning Working Groups/Divisions: Determining related tasks and resources needed for organizational functioning
Setting Up Result Indicators: Development of and monitoring success indicators for personnel, groups, divisions, and business as a whole
Development Mechanisms: Mechanisms for developing personnel, technical sphere, management systems, etc.