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.