ORGANIZATIONAL CULTURE AND ITS INFLUENCE ON

PROJECT MANAGEMENTRuhulla Abdul

2nd year IFF student

Financial University under the Government of the Russian Federation

Moscow 2015

Components of any organizationWithin any organization, successful project management is contextual. What that means is that the organization itself matters:

• its culture;

• its structure;

• and its strategy.

Each play an integral part and together they create the environment in which a project will flourish or founder.

Issues that affect a project can vary widely from company to company.

Contextual issues provide the backdrop around which project activities must operate, so understanding what is beneath these issues truly contributes to understanding how to manage projects.

Organizational culture

• Organizations have personalities, which are referred to as “cultures”.

• Culture is One of three of the most important contextual issues for project management.

• It helps to create concept of organizational culture and its roots and implications for effective project management.

• Organizational culture is a system of shared meaning held by members that distinguishes the organization from other organizations.

• Organizational cultures govern how that organization’s members behave.

Characteristics of organization's culture.

Seven characteristics that capture the essence of an organization's culture:1. Innovation and Risk Taking;

2. Attention to Detail;

3. Outcome Orientation;

4. People Orientation;

5. Team Orientation;

6. Aggressiveness;

7. Stability.

Functions and Liabilities of Organizational Culture

The Functions of Organizational Culture: Increasing organizational commitment and the consistency of employee behavior; aids employees by reducing ambiguity.

There are five basic functions of culture that help achieve these benefits:

a. Defines Boundaries;

b. Identity;

c. Commitment;

d. Social Stability;

e. Control Mechanism.

Culture as a Liability. Because culture is difficult to change in the short run and defines proper behavior, it may create barriers in the organization:

f. Barrier to Change;

g. Barrier to Diversity;

h. Barrier to Acquisitions and Mergers.

The role of organizational cultureOne of the three key variables in how projects are managed effectively is that of organizational culture and its impact on managing projects.

One of the original writers on culture defined it as

This definition has some important elements that must be examined in more detail:

• Unwritten

• Rules of behavior

• Held by some subset of the organization

• Taught to all new members

“The solution to external and internal problems that has worked consistently for a group and that is therefore

taught to new members as the correct way to perceive, think about, and feel in relation to these problems”.

Types of organizational cultureSeveral methods have been used to classify organizational culture. Some of he most famous are:

7. Strong/weak;

8. Healthy;

9. Charles Handy;

10.Kim Cameron and Robert Quinn;

11. Robert A. Cooke;

12.Entrepreneurial;

13.Edgar Schein model of organization culture;

1. Hofstede: Dimensions of Organizational Culture;

2. O'Reilly, Chatman, and Caldwell;

3. Denison Organizational Culture Model;

4. Deal and Kennedy's Cultural Model;

5. Johnson and Scholes Cultural Web;

6. Communicative Indicators;

Denison Organizational Culture Model

Deal and Kennedy's Cultural Model

Charles Handy

Kim Cameron and Robert Quinn

Robert A. Cooke

Edgar Schein model of organization culture

Organizational Culture and Project Management

Culture can affect project management in at least four ways:

• Departmental interaction;

• Employee commitment to goals;

• Project planning;

• Performance evaluation.

A culture can powerfully affect the manner in which departments within an organization view the process of project management.

The culture also influences the manner in which employees commit themselves to the goals of their projects as opposed to other, potentially competing goals.

Through symbols, stories, and other signs, companies signal their commitment to project management.

Escalation of commitmentOne common situation of an organization’s culture influencing on how project teams actually perform and how outcomes are perceived is known as escalation of commitment.

Escalation of commitment occurs when, in spite of evidence identifying a project as failing, no longer necessary, or beset by huge technical or other difficulties, organizations continue to support it past the point an objective viewpoint would suggest that it should be terminated.

Although there are a number of reasons for escalation of commitment to a failed decision, one important reason is the unwillingness of the organization to acknowledge failure or its culture’s working toward blinding key decision makers to the need to take corrective action.

The reverse is also true.

Thank You

References1. What is Organizational Culture? - Definition & Characteristics -

http://study.com/academy/lesson/what-is-organizational-culture-definition-characteristics.html

2. Types of Organization Culture - http://www.managementstudyguide.com/types-of-organization-culture.htm

3. “Types of Organizational Culture.” Boundless Management. Boundless, 21 Jul. 2015. Retrieved 24 Nov. 2015 -  https://www.boundless.com/management/textbooks/boundless-management-textbook/organizational-culture-and-innovation-4/culture-33/types-of-organizational-culture-187-3936/

4. Edgar Schein Model of Organization Culture - http://www.managementstudyguide.com/edgar-schein-model.htm

5. Introduction Why Project Management? - http://wps.pearsoncustom.com/wps/media/objects/7225/7398617/MGT310_Ch01.pdf

6. The Organizational Context Strategy, Structure, and Culture - http://wps.pearsoncustom.com/wps/media/objects/7225/7398617/MGT310_Ch02.pdf

7. Project Selection and Portfolio Management - http://wps.pearsoncustom.com/wps/media/objects/7225/7398617/MGT310_Ch03.pdf

Organizational culture and project management crossword

Down2. These subsets of the overall culture tend to develop in larger organizations to reflect the common problems, situations, or experiences that are unique to members of certain departments or geographical areas.3. One way that organizational cultures form is through the ….5. Organizational culture consists of rules of ….6. The culture affects how managers evaluate the … of project teams and how they view the outcomes of projects.8. Job … seeks to measure affective responses to the work environment: it is concerned with how employees feel about the organization. It is an evaluative term.9. One of the ways in which culture can affect project management is how departments are expected to interact and support each other in pursuit of project ….10. An organization's success in managing projects is driven largely by three critical contextual factors: …, structure, and organizational culture.12. The degree to which organizational activities emphasize maintaining the status quo in contrast to growth.16. Models that describe different indicators of corporate cultures is called … of organization culture.

Across1. Organizational culture is taught to all new … of company.4. Cultural norms guide the behavior of each member of the organization but are often not written down.7. The degree to which people are competitive rather than easy-going.10. It is important to recognize the positive effects of a … organizational culture on project management practices versus those of a culture that works against project management.11. Their actions set the general climate of what is acceptable behavior. How well employees are socialized will depend on their selection of culture organization and socialization method.13. The culture influences the level of employee … to the goals of the project on balance with other, potentially competing goals.14. The organizational culture influences project … processes such as the way work is estimated or how resources are assigned to projects.15. … of commitment occurs when an organization continues to pour resources into a project that is obviously failing.17. One of the three key variables in how projects are managed effectively is that of organizational culture and its impact on managing of ….

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