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Project ManagementProject Life Cycle,
Organization Structure andCulture
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Introduction
Once the management approves the project then
the question becomes how will the project be
implemented?
What will be the project life cycle?
How will the project be organized?
What will be the effects of organization
culture?
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Introduction
Projects and project management are
carried out in an environment broader
than the project itself. The projectmanagement team must understand this
broader context so that it can select the
life cycle, tools and techniques and
processes that appropriately fit the
project.
Project management structure and culture
of the organization constitute major
elements of the environment in which
projects are implemented.
It is important for project managers and
participants to know the lay of the land
so that they can avoid obstacles and take
advantage of pathways to complete their
projects.
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Introduction
Project management system provides a
framework for launching and
implementing project activities within aparent organization.
A good system appropriately balances the
needs of both the parent organization and
the project by defining the interfacebetween the project and parent
organization in terms of authority,
allocation of resources and eventual
integration of project outcomes into
mainstream operations.
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Project Life Cycle
Project life cycle is collectively all the phases
of the project.
It represents a relationship between project
managementand project delivery.
Project Deliverydetailed tasks that our team
is going to undertake to deliver project results
Project managers or the organization can divide
projects into phases to provide better
management control with appropriate
links to ongoing operations of the performingorganization.
Example:software development project may
have five phases: defin i t ion, design, code,
integrat ion test, maintenance.
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Project Life Cycle
There are a number of different life-cycle models. Many are
unique to specific industry or type of project.
Project life cycle typically passes sequentially through different
stages. The starting point being the moment the project is given
go ahead. Project efforts start slowly, builds to a peak, and then
declines to delivery of the project to customer.
Initiating
- Goals
- Specifications
- Tasks- Responsibilities
Planning
- Schedules
- Budgets
- Resources
- Risks
- Staffing
Executing
- Status Reports
- Changes
- Quality
- Forecasts
Monitoring
and Control
- Scope
- Schedule / Cost- Quality
- Performance
- Risk
Closing
- Project
- Contract Closure
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Project Life Cycle An Example
AcceleratedSAP(ASAP)is a comprehensive method for accelerating SAP R/3
implementation projects.
The combination of the set of ASAP components ensure quick and efficient
implementation of the SAP R/3 System.
The ASAP Roadmap, a process-oriented, comprehensible, compressed
project plan, leads the implementation process step by step. ASAP describes
how to implement an SAP product / solution.
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Project Life Cycle An Example
At the highest level the ASAP Roadmap comprises five phases:
1. Project Preparation - Inclusion of all relevant decision-makers for the SAP R/3 implementation
and selection of the internal and external members of the project team.
2. Business Blueprint - Determine the business requirements of the implementing company. The Business
Blueprint is a visual representation of the status of the company which is to be realized in theSAP R/3 implementation.
3. Implementation - Configuration and fine-tuning of the SAP R/3 System.
4. Final Preparation - Test all interfaces, train users, migrate business data into the SAP R/3 System.
5. Go Live & Support - Start SAP R/3 production operation, specify procedures and benchmarks to
permanently monitor the gains of the investment in SAP R/3.
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Project Life Cycle An Example
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Project Life Cycle An Example
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Project Life Cycle
Project life cycle is a corner stone of project management.
Projects have a limited life span and there are predictablechanges in level of effort and focus over the life of the project.
A Generic Project Life Cycle
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Project Life Cycle
There are three elements that you should
compare over the life of the project. Theseare:
Ability to influence the outcome of
the project
Cost and staffing levels
Level of uncertainty
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Cost and Staffing Level Across the Project Life Cycle
Cost and Staffing Levels to the project starts low and rises as the
project progresses, finally drops rapidly as the project draws to
conclusion.
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Stakeholders Influence Across the Project Life Cycle
Ability to influence the outcome of the projectis high in the
beginning and becomes more difficult (and expensive) as time
passes.
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Uncertainty (Risk) Across the Project Life Cycle
Level of Uncertaintyis highest and hence riskof failing to achieve
the objectives is greatest at the start of the project and drops off as
time progresses and the opportunity for problems lessens.
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Project Life Cycle and Product Life Cycle Relationship
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Phases of a Project
All projects can be thought of as a series of phases
that have a defined beginnings and defined end points.
These phases may overlap.
Phases usually have an endpoint that results in some
sort of deliverable.
A deliverableis a measurable, verifiable work product
such as a specification, feasibility study report, detailed
design document, or working prototype.
Deliverable from one phase are usually reviewed forcompleteness and accuracy and approved before work
starts at the next phase.
Phases are notthe same as project management
process groups.
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Phases of a Project
The purpose of the phased approach is to allow
management to decide whether to proceed with aproject without having to commit large amount of
resources.
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Characteristics of Project Phases
Completion and approval of one or more deliverables characterizes
a project phase.
Some deliverables can correspond to the project management
process, whereas other are the end product or components of the
end products for which the project was conceived.
The deliverables and hence the phases are part of a generally
sequential process designed to ensure proper control of the projectand to attain the desired product or service, which is the objective
of the project.
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Characteristics of Project Phases
In any specific project, for reasons of size, complexity, level of risk
and cash flow constraints, phases can be further subdivided into
sub-phases.
Each sub-phase is aligned with one or more specific deliverables
for monitoring and control.
Majority of these sub-phase deliverables are related to the primary
phase deliverable, and the phases typically take their names fromthese phase deliverables: requirements, design, build, test, startup,
turnover, and others, as appropriate.
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Characteristics of Project Phases
A project phase is generally concluded with a review of the work
accomplished and the deliverables to determine acceptance,whether extra work is still required, or whether the phase should
be considered closed.
A management review is often held to reach a decision to start
the activities of the next phase without closing the current phase.
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Characteristics of Project Phases
A phase can be closed without the decision
to initiate any other phases. For example, theproject is completed or risk is deemed too
great for the project to be allowed to
continue.
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Characteristics of Project Phases
Formal phase completion does not include authorizing the
subsequent phase. For effective control, each phase is formally
initiated to produce a phase-dependent out of the Initiatingprocess group, specifying what is allowed and expected for
the phase.
A phase-end review can be held with the explicit goals of obtaining
authorization to close the current phase and to initiate thesubsequent one. Sometimes both authorizations can be gained at
one review.
Phase reviews are also called phase exits, phase gates, or
kill points.
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Characteristics of Project Phases
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Relationship between PM Processes and Project Processes
Project Processessuch as analysis, design, development,
implementation, etc.
Project Management Processesenveloping processes
(initiating, planning, executing, monitoring and control,
closing) to ensure project processes are executed. They are
carried out once per project or per phase of the project
Separate process groups for each phase of the project
Phase 1
Phase 2
Phase 3
Phase 4
Initiating
Planning
Executing
Monitoring & ControlClosing
Initiating
Planning
Executing
Monitoring & Control
Closing
InitiatingPlanning
Executing
Monitoring & Control
Closing
Initiating
Planning
Executing
Monitoring & Control
Closing
S
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Project Management Structures
Four types:
Functional Organization
Dedicated Project Teams
Matrix (Weak, Balanced and Strong) Organization
Network Organization
Working in Matrix system in one organization is
different from working in matrix in another
organization. Researches attribute this to the
organizational culture in the two organizations.
Organizational culture reflects the personal i ty of the
organization.
F ti l O i ti
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Functional Organization
Chief
Executive
Human Resources Finance
Marketing Engineering Manufacturing Procurement
Customer
Services
Domestic
Sales
InternationalSales
Electronics
Engineering
Software
Engineering
MechanicalEngineering
Design
Fabrication
Assembly
Testing
Production
Scheduling
Purchasing
Receiving &
Inspection
F ti l O i ti
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Functional Organization
Delta Manufacturing, Inc.
CEO
Functional
Manager
Functional
Manager
Functional
Manager
Functional
Manager
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Project
Coordination
Golden boxes represent staff engaged in project activities
F ti l St t
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Functional Structure
Advantages
No change in organizational structure
Flexibility
In-depth expertise
Easy post-project transition Easier management of professionals
Team members only report to one
supervisor
Similar resources are centralized,the company is grouped by specialists
Clearly defined career paths in
areas of work specialization
F ti l St t
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Functional Structure
Disadvantages
Lack of focus
Poor integration
Slow
Lack of ownership People place more emphasis on their
functional specialty to the determent of the project
No career path in project management
Project manager has little or no authority
These disadvantages are more pronounced when the scope of the project
is broader and one functional department does not take the dominant
technological and managerial lead on the project.
D di t d P j t T
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Dedicated Project Team
Delta Manufacturing, Inc.
CEO
Human Resources Finance
Marketing Engineering Manufacturing Procurement
Customer
Services
Domestic
Sales
InternationalSales
Electronics
Engineering
Software
Engineering
MechanicalEngineering
Design
Fabrication
Assembly
Testing
Production
Scheduling
Purchasing
Receiving &
Inspection
Project
Manager
Individuals from inside
and outside the
organization
P j ti d O i ti St t
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Projectized Organization Structure
Delta Manufacturing, Inc.
CEO
Human Resources Finance
Project 1
PM
Project 2
PM
Engineering
Manufacturing
Procurement
Marketing Legal
Other projectsOther projects
Electrical
Mechanical
Software
Fabrication
Assembly
Testing
Engineering
Subcontractor
Procurement
System
Hardware
Software
Subcontractor 1
Subcontractor 2
Golden boxes represent staff engaged in project activities
Project CoordinationProject Coordination
Projecti ed Organi ation Str ct re
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Projectized Organization Structure
Advantages
Simple, fast and efficient project
organization
Cohesive
Cross functional integration Loyalty to the project
More effective organization than
functional
Projectized Organization Structure
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Projectized Organization Structure
Disadvantages
Expensive
Internal strife
Limited technology expertise
Difficult post-project transition No home when project is complete
Lack of professionalism in disciplines
Duplication of facilities and job functions
Less efficient use of resources
Matrix Organization Structure
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Matrix Organization Structure
Delta Manufacturing, Inc.
CEO
Human Resources Finance
Marketing Engineering
Customer
Services
Domestic
SalesInternational
Sales
Electronics
EngineeringSoftware
Engineering
Mechanical
Engineering
Director of
Projects
Project
Manager 1
Project
Manager 2
Project
Manager 3
Different Matrix Forms
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Different Matrix Forms
In practice there are really different kind of matrix
systems, depending on relative authority of the projectand functional managers.
Functional, lightweightor weak matrixbalance of
authority strongly favors the functional managers.
Balancedor middleweight matrixtraditional matrix
arrangement.
Project,heavyweightor strong matrixbalance of
authority is strongly on the side of project manager.
Weak Matrix Form
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Weak Matrix Form
Delta Manufacturing, Inc.
CEO
Functional
Manager
Functional
Manager
Functional
Manager
Functional
Manager
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Project Coordination
Golden boxes represent staff engaged in project activities
Project Managers role is more of that of a coordinator / expeditor rather than a true project manager.
Staff
Balanced Matrix Form
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Balanced Matrix Form
Delta Manufacturing, Inc.
CEO
Functional
Manager
Functional
Manager
Functional
Manager
Functional
Manager
Staff
Staff
Project
Manager
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Project Coordination
Golden boxes represent staff engaged in project activities.
The need for a project manager is recognized but project manager does not have full authority over
the project and project funding.
Staff
Strong Matrix Form
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Strong Matrix Form
Delta Manufacturing, Inc.
CEO
Functional
Manager
Functional
Manager
Functional
ManagerManager of
Project Managers
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Project
Manager
Project
Manager
Project Coordination
Golden boxes represent staff engaged in project activities.
Project Manager is a dedicated / specialized project manager.
Project
Manager
Matrix Organization Structure
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Matrix Organization Structure
Advantages
Efficient
Strong Project Focus
Easier Post-Project Transition
Flexible
Highly visible project objectives Improved project manager control
over resources
More support from functional organization
Maximum utilization of resources Better coordination
Better horizontal / vertical dissemination of
information compared to functional
Team membership maintain a home
Matrix Organization Structure
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Matrix Organization Structure
Disadvantages
Dysfunctional conflict
Infighting
Stressful
Slow Extra administration required
More than one boss for project team
More complex to monitor / control
Tougher problems with resource allocation
Need extensive policies and procedures
Functional managers may have different
priorities than project manager
Higher potential for conflict
Matrix Organization Structure
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Matrix Organization Structure
According to experts, it takes 3 to 5 years for a matrixsystem to fully mature.
Network / Composite Organization
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Network / Composite Organization
Delta Manufacturing, Inc.
CEO
Functional
Manager
Functional
Manager
Functional
ManagerManager of
Project Managers
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Project
Manager
Project
Manager
Project A Coordination
Golden boxes represent staff engaged in project activities
Project
Manager
Project B Coordination
Corporate downsizing and cost control have combined to produce network
organizations.
In theory, network organization is an alliance of several organizational structures forthe purpose of creating products and services for the customers.
Network Organization
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Network Organization
Advantages
Cost Reduction
High level of expertise
Flexible
Disadvantages
Coordination breakthrough
Loss of control
Conflict
Tight Matrix
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Tight Matrix
It has nothing to do with matrix
organization Refers to locating the project
team offices in the same room
Organizational Structure Influences on Projects
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Organizational Structure Influences on Projects
Project Managers
Authority
Resource
Availability
BudgetOwnership
Project Managers
Role
Project Mgt.
Admin. Staff
Project Managers
Accountability
Project Managers
Skills
Staff Skills
Functional
Organization
Matrix Organization
Weak Balanced
Projectized
Organization
Little or
None
Unlimited Low to
Moderate
Strong
Moderate
to High
High to
Almost Total
Little or
NoneUnlimited Low to
ModerateModerate
to High
High to
Almost Total
FunctionalManager
FunctionalManager
ProjectManager
ProjectManager
Mixed
Part
Time
Part
Time
Full
Time
Full
Time
Full
Time
Part
Time
Part
Time
Part
Time
Full
Time
Full
Time
Part
Time
Part
Time
Full
Time
Full
Time
Full
Time
Wide range
of skills
Wide range
of skills
Wide range
of skillsHighWide range
of skills
Limited Limited High HighMixed
Relative Effectiveness of Organization Structures
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Relative Effectiveness of Organization Structures
Larson and Gobeli studied the relative efficacy of different project management structures. Their
work is based on a sample of more than 1600 project professionals and managers actively involved
in project management within their organization. Among the findings they report are the rated
effectiveness of different structures for product development and construction projects. The resultsindicate a strong preference for either the project team or strong matrix.
Very
Ineffective
Weak
Matrix
Balanced
Matrix
Strong
Matrix
Projectized
Organization
Ineffective
Effective
Very
Effective
Construction
Projects
New Products
Projects
Functional
Organization
Choosing Appropriate Project Management Structure
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Choosing Appropriate Project Management Structure
Project success is directly linked to the
amount of autonomy and authority projectmanagers have over their projects.
Best system balances the needs of the
project with those of the parent
organization.
What project structure should an
organization use? This is a complicated
question with no precise answer.
A number of issues need to be considered
at both the organization and project level.
Organization Considerations
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Organization Considerations
How important is project management to the success
of the firm?
What percentage of core work involves projects?
75% of work involves projectsfully projectized organization.
Both standard products and projectsmatrix organization.
Few projectsfunctional organization.
Temporary task forces could be created on an as-needed basisand the organization could outsource project work.
Resource availability.
Matrix share resources across multiple projects and functional
domains while at the same time creating legitimate projectleadership. For organization, that cannot afford to tie up
critical personnel on individual projects, a matrix system
would appear to be appropriate. An alternative would be to
create a dedicated team but outsource project work when
resources are not available internally.
Project Considerations
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Project Considerations
How much autonomy the project needs in order to be
successfully completed.
Hobbs and Menard identify seven factors that should
influence the choice of project management structure:
Size of project
Strategic importance Novelty and need for innovation
Need for integration (number of departments involved)
Environmental complexity (number of external interfaces)
Budget and time constraints
Stability of resources requirements
The higher the levels of these seven factors, the more
autonomy and authority the project manager and
project team need to be successful. This translates into
using either a dedicated project team or project matrix.
Example: Chaparral Steel
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Example: Chaparral Steel
Example: Chaparral Steel
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p p
A mini steel mill that produces steel bars and beans from scrap metal.
Classifies projects into three categories:
Advanced development projects
High risk endeavors involving creation of breakthrough
product or process.
One or two advanced projects at one point in time.
Dedicated project teams are used.
Platform projects
Medium risk projects involving system upgrades that yield
new products and processes.
Three to five platform projects at one point in time.
Strong matrix is used.
Incremental projects
low risk short term projects that involve minor adjustments in
existing products and processes.
Thirty five to forty five incremental projects at one point in time.
Weak matrix is used.
Organizational Culture
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g
Strong connection between project management
structure, organization culture and project success.
Organization culture refers to a system of shared
norms, beliefs, values and assumptions which binds
people together, thereby creating shared meanings.
Reflects the personality of the organization and canenable us to predict attitudes and behaviors of
organizational members.
Culture is also one of the defining aspects of an
organization that sets it apart from other organizationseven in the same industry.
Organizational Culture
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g
It is important for project managers to
be culture sensitive so that they candevelop strategies and responses that
are likely to be understood and
accepted as well as avoid violating key
norms that would jeopardize theireffectiveness within the organization.
Organizational Culture
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g
Organizational culture often has a
direct influence on project:
A team proposing an unusual or
high-risk approach is more likely
to secure approval in anaggressive or entrepreneurial
organization.
A project manager with
participative style will haveproblems in hierarchical /
bureaucratic organization.
Organizational Culture
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g
Ten primary characteristics which in aggregate, capture
the essence of an organizations culture. These
characteristics exists on a continuum.
Page 73 of Gray and Larson
Member IdentityJob Organization
Team EmphasisIndividual Group
Management FocusTask People
Unit IntegrationIndependent Interdependent
ControlLoose Tight
Risk ToleranceLow High
Reward CriteriaPerformance Other
Conflict ToleranceLow High
Means-ends OrientationMeans Ends
Open System FocusInternal External
Organizational Culture
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g
Culture performs several importantfunctions in an organization
Provides a sense of identity
Helps legitimize the managementsystem
Clarifies and reinforces standards of
behavior
Helps create social order
Organizational Culture
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g
SubcultureOften aligned withinspecific departments or specialty areas.
It is not uncommon for norms, values
and customs to develop within aspecific field or profession such as
marketing, finance, operations, I.T.
CounterculturesReflect differentset of values beliefs and customs often
in direct contradiction with the culture
espoused by top management.
Project Organizational Structure
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Framework
Structural framework
Companys organization chart
Who reports to whom?
Human Resource
How an employee is treated?
Work ethics
Overtime expected?Training emphasis
Internal and External politics
Who has the power?
Where leadership lies?
SymbolicStyle of management
Dress code
Formal vs. informal
Structure
Functional organization
Projectized organization
Matrix organization
Scope
Corporate identity
How does the organization sees itself(leader, follower, environment friendly, etc.)
Corporate vs. individual emphasis
How Business Units integrate?
(share or compete for organization resources)
Risk tolerance (risk taker, risk averter, etc.)
Organizational focus (long-term vs. short-term)
Project / product / company maturity