SUMMARY PM

PROJECT MANAGEMENT NAME: M.UMAIR AHMED BBAM-23-13

Introduction
Projects are one of the principal means by which we change our world. Project management has become one of the most
popular tools for organizations, both public and private, to improve internal operations, respond rapidly to external
opportunities, achieve technological breakthroughs, streamline new product development, and more robustly manage the
challenges arising from the business environment.
One of the features of modern business is the nature of the opportunities and threats posed by external events. Companies face
international competition and the need to pursue commercial opportunities rapidly. First it seemed impossible to perform all
four tasks of the competitive model. But now there are some companies who managed to be fast to market, efficient, cost-
conscious, and customer-focused. This is possible because they developed and committed themselves to project management
as a competitive tool.

What is a project?
Process refers to ongoing, day-to-day activities in which an organization engages while producing goods or services. Processes
use existing systems, properties, and capabilities in a continuous, repetitive manner. Projects take place outside the normal,
process-oriented world of the firm. Project management activities remain unique and separate from the manner in which more
routine, process-driven work is performed. Project work is continuously evolving, establishes its own work rules, and is the
antithesis of repetition in the workplace.

Some definitions of projects:

- A project is a unique venture with a beginning and end, conducted by people to meet established goals within parameters
of cost, schedule, and quality.
- Projects are goal-oriented, involve the coordinated undertaking of interrelated activities, are of finite duration, and are all,
to a degree, unique.
- A project is organized work toward a predefined goal or objective that requires resources and effort, a unique (and
therefore risky) venture having a budget and schedule.

Characteristics of a project:
- Have a specific objective to be completed within certain specifications
- Have defined start and end dates
- Have funding limits
- Consume human and nonhuman resources (money, people, equipment)
- Are multifunctional

“A project is a temporary endeavor undertaken to create a unique product, service, or result.” This definition of PMI shows the
following characteristics of projects:
1. Projects are complex, one-time processes. A project arises for a specific purpose or to meet a stated goal. It’s complex
because it typically requires the coordinated inputs of numerous members of the organization. It’s temporary, because a
project is intended to fulfill a stated goal. It exists only until its goal has been met.
2. Projects are limited by budget, schedule, and resources. Project work requires that members work with limited financial
and human resources for a specified period of time. Projects are ‘resource-constrained’ activities.
3. Projects are developed to resolve a clear goal or set of goals. The project’s goals, or deliverables, define the nature of the
project and that of its team.
4. Projects are customer-focused. The purpose of any project is to satisfy customer needs.

General project characteristics:

1. Projects are ad hoc endeavors with a clear life cycle. Projects are nontraditional; they are activities that are initiated as
needed, operate for a specified time period over a well understood development cycle, and are then disbanded. They’re
temporary organizations.
2. Projects are building blocks in the design and execution of organizational strategies. Projects allow organizations to
implement companywide strategies. They’re the principal means by which companies operationalize corporate-level
objectives.
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3. Projects are responsible for the newest and most improved products, services, and organizational processes. Projects are
tools for innovation. Because they complement (and often transform) traditional process-oriented activities, many
companies rely on projects for going beyond conventional activities. Projects are the stepping-stones by which we move
forward.
4. Projects provide a philosophy and strategy for the management of change. Projects allow organizations to go beyond
simple statements of intent and to achieve actual innovation.
5. Project management entails crossing functional and organizational boundaries. Projects give a perfect example of internal
organizational collaboration bringing people together from various functions across the company. Projects are among the
most common means of promoting collaboration, both across functions and across organizations.
6. The traditional management functions of planning, organizing, motivation, directing, and control apply to project
management. The project manager is most responsible for keeping track of the big picture.
7. The principal outcomes of a project are the satisfaction of customer requirements within the constraints of technical, cost,
and schedule objectives. Projects are defined by their limitations.
8. Projects are terminated upon successful completion of performance objectives. Projects differ from conventional processes
in that they’re defined by limited life cycles.

Differences between process and project management

Process Project
Repeat process or product New process or product
Several objectives One objective
Ongoing One shot – limited life People are
homogenous More heterogeneous
Well-established systems New systems
Certainty of performance, cost, schedule Uncertainty of performance, cost, schedule
Part of line organization Outside of line organization
Bastions of established practice Violates established practice
Supports status quo Upsets status quo

The same factors that make project management a unique undertaking are also among the main reasons why successful project
management is so difficult. For every firm discovering the benefits of projects, many more underestimate the problems involved
in becoming project savvy.

1.3 PROJECT LIFE CYCLES

A project life cycle refers to the stages in a project’s development. Life cycles are important because they
demonstrate the logic that governs a project. They also help us develop our plans for carrying out the project.

Conceptualization refers to the development of the initial goal and

technical specifications for a project.
Planning is the stage in which all detailed specifications,
schematics, schedules, and other plans are developed. During
execution, the actual “work” of the project is performed, the
system developed, or the product created and fabricated. The bulk
of project team labor is performed. Termination occurs when the
completed project is transferred to customers, its resources
reassigned, and the project formally closed out.

The life cycle is relevant only after the project has actually begun.
When we evaluate projects in terms of this life cycle model, we are
given some clues regarding their subsequent resource
requirements; that is, we begin to ask whether we have sufficient
personnel, materials, and equipment to support the project.
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The project life cycle is also a useful means of visualizing the activities required and challenges to be faced during
the life of a project.

Client interest: The level of enthusiasm or concern expressed by the

project’s intended customer. Clients can be either internal to the
organization or external.
Project stake: The amount of corporate investment in the project.
Resources: The commitment of financial, human, and technological
resources over the life of the project.
Creativity: The degree of innovation required by the project,
especially during certain development phases.
Uncertainty: The degree of risk associated with the project.

phase in the context of project management:

1. Enthusiasm: Initial excitement and optimism about the project.

2. Disillusionment: Realization that the project is more challenging than expected.
3. Panic: Urgency and stress arise as problems and delays accumulate.
4. Search for the guilty: Blame is assigned for project failures or setbacks.
5. Punishment of the innocent: Uninvolved or minor contributors are held accountable.
6. Praise and honors for the non-participants: Recognition is often given to those uninvolved or higher-ups.

AGE OF PROJECT MANAGEMENT

These factors combined have led to a new era—often called the "Age of Project Management"—where structured
project management practices are essential for organizations to adapt, innovate, and thrive in the face of these
challenges. Project management acts as a critical tool that enables businesses to handle the pressures of the
modern world and achieve strategic goals efficiently.
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breakdown of the factors depicted in

1. Corporate Downsizing: Many organizations reduce their workforce to cut costs, which increases the need for efficient
project management to maximize productivity with fewer resources.
2. Global Competition: In an increasingly competitive global market, companies are under pressure to deliver high-
quality products and services faster and more cost-effectively. Project management helps streamline processes to stay
competitive.
3. Knowledge Explosion: The rapid advancement of technology and information requires organizations to manage and
utilize new knowledge effectively. Project management is essential for organizing, integrating, and applying this
knowledge efficiently.
4. Small Projects Represent Big Problems: Even small-scale projects can lead to significant issues if not managed
properly. Effective project management ensures that all projects, regardless of size, are executed successfully.
5. Compression of Product Lifecycle: Products have shorter lifecycles, so companies need to innovate and deliver new
products quickly. Project management is crucial for speeding up development timelines and managing frequent product
launches.
6. Increased Customer Focus: As customers demand more personalized products and services, project management
ensures that teams stay focused on delivering solutions that meet customer needs.
7. Rapid Development of Third World and Closed Economies: The integration of developing economies into the
global market introduces new challenges and opportunities. Project management helps navigate these complexities and
enables companies to take advantage of emerging markets.

Project management stimulus

• Increased complexity in deliveries requires a new type

of management .
• ”Downsizing”. Focus on core competence – middle
management is replaced by project management
• Higher change rate in business – increased focus on the
customer.
• Demand for rapid deliveries.
• Some products are only delivered as projects (buildings, ship, oil platforms)
• PMI: 25 % of the worlds GNP (BNP) is managed as projects

Some expensive experiences

• Oil industry:
- Mongstad, Åsgard, Snøhvit
• Construction industry:
- Holmenkollen, Norges Bank, Rikshospitalet, Slottet, Romeriksporten, …
• IT-industry:
• Flexus, Tress90, Felleskjøpet Trondheim (SAP), IBM OS/360,…
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Cost analysis – Norwegian Cont.Shelf

Cost category Start estimate Final cost Overrun

mill USD mill USD %
Projecting/management 122,6 697,0 469
Construction, materials 840,6 2017,9 140
Equipment 333,3 562,6 69
Transport, installation 729,0 1984,4 167
Assembly 105,0 1527,3 1355
Insurance 69,0 131,0 96
Miscellaneous 416,6 377,0 -10
Sum 2614,0 7261,2 178

Overrun causes Norwegian Cont.Shelf

• Insufficient planning
• Insufficient cost control
• Lack of cost awareness
• Assembly work offshore underestimated.
• High quality demands for offshore activity
• Difficult weather conditions
• Situation on vendor market 1970-1980 (tight market).
• Tight market for crane barges (kranlektere) and other special wessels
• New governmental safety instructions
• Law and instructions in general (arbeidsmiljø, havmiljø,..)
• Requirement to purchase Norwegian services and products

Experiences from public IT-projects

• IT-Failures
• Projects not aligned with business plan or IT-strategy.
• Unrealistic goals and ambitions. Lack of understanding of own competence.
• Diffuse lines of responsibility.
• Too big and complex projects. Often ’big bang’ delivery.
• Week project management.
• Lack of resources and capability to manage unexpected events .
• Unclear contracts (scope of work).

• Foundation for plans and estimates too week. High risk.

• Too much focus on technology – too little on organization
• Wrong technology (too old or too new)
• Lack of commitment from top-management
• Continuous change of requirements. Procedures for change management absent.
• Too little attention to out-sourcing possibilities

The Challenges of Complex IT Projects

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Although significant numbers of IT projects are routinely completed successfully, it must be conceded that
the data on IT project success rates provide cause for concern. For example, a recent study on the state
of IT project management in the UK carried out by Oxford University and Computer Weekly reported that
a mere 16% of IT projects were considered successful. Similarly, in another UK survey published by the
BCS, only three out of the more than 500 development projects assessed met the survey’s criteria for
success. Nevertheless, the Standish Group estimates current success rates in the US at around 34%,
which represents a significant improvement on the 16% success rate recorded in their first survey in
1995.

Standish Group International

Chaos-project (USA, 1995):
y 365 respondents, 8380 projects
On software projects:
y 31 % of the projects will be cancelled before completion
y 53 % will cost 189 % of original budget
y Only 16 % will be completed on time and within budget. (only 9 % for big companies)
2004
y 18% failed projects
y 53% Seriously challenged projects

Standish Group (2)

• Success Criteria (points)
• User involvement (19)
• Executive management support (16)
• Clear statement of requirements (15)
• Proper planning (11)
• Realistic expectations (10)
• Smaller project milestones (9)
• Competent staff (8)
• Project team ownership (6)
• Clear vision and objectives (3)
• Hard-working, focused staff (3)

Project management as a profession

• Developed as a systematic (and research based) professional from ca 1950

• DoD, USA: The Polaris-project (9000 subcontractors.)
=> PERT, 1957: stocastic duration on activities,
based on
- thorough time estimates for all activities
- focus on estimate uncertainty, and
- thorough knowledge on the sequence of activities.
• CPM, 1959 (Du Pont): Exact duration, focus on activities and resource allocation. Balance between
time and cost.
• IBM, 1964: Project management tool for IBM 1440.
-network with dependencies and lags between activities (precedence network)
• US Defence has played a major role (US Mil Spec)
• In Norway: The oil industry has been a leading actor in project management.
• PM initiativs in Norway: NORSOK, PS2000
• Computer tools: Artemis, Prima Vera, Super Project. MS Project
• IT-industry: Focus on Project management, despite many bad experiences. Consultancy companies are
leading .
• Professional organization: PMI – Project Management Institute (www.pmi.org):
”not-for-profit project management professional association, with over 100,000 members representing 125
countries.”
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Integrated management of projects

Integrated Management of Projects framework. It emphasizes how projects are influenced by both internal and external factors
and how these factors are managed for successful project implementation. Here's an overview of the elements in the
framework:
1. Customer: At the top, the customer is the focal point,
indicating that project management begins with
understanding customer needs and requirements.
2. Environmental Analysis:
o External Factors: Elements outside the
organization that impact projects, such as market
trends, regulations, and competitive environment.
o Internal Factors: Factors within the organization,
including resources, internal processes, and
corporate culture.
o This analysis aligns with the organization's mission,
goals, and strategies, which help set priorities for
projects.
3. Projects: Projects are central in this framework and are the
means through which organizational goals and strategies are
implemented.
4. System:

o This encompasses the project scope, work breakdown, networks, resources, and cost. These elements form
the technical aspects of project management, ensuring that all project components are identified and
managed effectively.
5. Environment and Culture:
o This includes organization structure, leadership, teams, and partners. These factors address the human and
cultural aspects, highlighting the importance of leadership, teamwork, and partnerships in achieving project
success.
6. Project Implementation: At the base, this represents the actual execution of the project, where all these factors come
together to deliver on customer expectations.

Technical and Sociocultural Dimensions

of project management, symbolized in a yin-yang style to illustrate the balance and interdependence between these two
aspects.

1. Sociocultural Dimension (Upper Half):

• Focuses on the human and interpersonal aspects of project management.

• Includes elements such as:

o Leadership: Guiding the team towards project goals.

o Problem Solving: Addressing challenges and finding solutions.

o Teamwork: Collaborating effectively with others.

o Negotiation: Reaching agreements and managing conflicts.

o Politics: Navigating organizational dynamics and influences.

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o Customer Expectations: Understanding and meeting customer needs.

2. Technical Dimension (Lower Half):

• Focuses on the structured and process-oriented aspects of project management.

• Includes elements such as:

o Scope: Defining the boundaries and deliverables of the project.

o WBS (Work Breakdown Structure): Breaking down the project into manageable tasks.

o Schedules: Planning timelines for task completion.

o Resource Allocation: Assigning resources to tasks efficiently.

o Baseline Budgets: Setting financial parameters for the project.

o Status Reports: Monitoring and reporting project progress.

The yin-yang symbol highlights that both dimensions are crucial and need to be balanced for successful project management.
The sociocultural elements enable effective teamwork and communication, while the technical elements ensure project
organization and efficiency. Both dimensions are interconnected, as technical skills need to be complemented by strong
interpersonal skills to manage projects effectively.

Work Breakdown Structure (WBS) for Multan Metro Bus Project

1. Project Planning & Design

• Feasibility study, environmental assessment, budgeting, approvals.

2. Land Acquisition

• Land surveys, legal clearances, compensation, and acquisition.

3. Infrastructure Development

• Road construction, bridges, drainage, underpasses, and paving.

4. Bus Stations & Terminals

• Design, construction, passenger amenities, ticketing, and safety systems.

5. Electrical & Mechanical Systems

• Power grid, lighting, signals, ventilation, and backup systems.

6. Bus Procurement

• Tendering, bus purchase, quality checks, driver training.

7. Testing & Commissioning

• System testing, trial runs, safety inspections, final approval.

8. Operations & Maintenance

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• Daily operations, maintenance schedules, security, and staff training.

SOFT SIDE

"soft side" refers to the interpersonal and human aspects of managing a project.

"hard side" focuses on processes, tools, methodologies, and measurable aspects like timelines, budgets, and deliverables,

the soft side deals with the following:

1. Leadership and Team Management: Leading, motivating, and managing the project team effectively. It includes
being a good leader, setting a vision, and guiding the team toward project success.
2. Communication: Effective communication is crucial in project management. This involves listening, understanding,
and conveying information clearly to all stakeholders, team members, and clients.
3. Conflict Resolution: Projects often involve diverse teams with differing opinions, priorities, or working styles. The
soft side includes managing and resolving conflicts to keep the project on track.
4. Emotional Intelligence (EQ): The ability to understand and manage your own emotions, as well as those of others.
High EQ is essential for managing stress, maintaining team morale, and building strong relationships.
5. Stakeholder Engagement: Building and maintaining good relationships with stakeholders by understanding their
needs and concerns, and ensuring their involvement in project decisions.
6. Change Management: Projects often face changes in scope, team dynamics, or organizational goals. The soft side
involves helping team members and stakeholders adapt to these changes smoothly.
7. Team Collaboration and Dynamics: Encouraging collaboration and creating a positive working environment that
fosters creativity, teamwork, and high performance.

These soft skills are critical for ensuring that the technical aspects of a project are executed effectively and that the human side of
project management, which impacts morale and productivity, is handled with care.

WHO WAS THE LEADER

an effective leader is someone who possesses a combination of both hard skills (technical and procedural expertise) and soft
skills (interpersonal and emotional intelligence). Here’s how a good leader is typically characterized:

• Visionary and Goal-Oriented

• Communicative
• Motivational and Inspirational
• Decisive
• Emotionally Intelligent
• Problem Solver
• Adaptable
• Ethical and Fair
• Delegator

The control variables in a project

"Project Management Triangle," also known as the "Iron Triangle," which

outlines the three primary constraints in project management: Time
(Schedule), Cost (Budget), and Performance (Scope/Quality). Here's a
breakdown of the control variables in this project management model:

1. Time (Schedule): The due date or schedule by which the project

needs to be completed.
2. Cost (Budget): The budget limit or financial resources available for
the project.
3. Performance (Scope/Quality): The level of performance or quality
required to meet project goals.
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The point where these three variables intersect is labeled as the Target. Achieving the target means finding a balance between
time, cost, and performance, ensuring that the project meets its objectives within the constraints. Adjusting one of these
constraints often impacts the others. For example, if more time is required (due date extended), the budget or performance may
also need adjustment.

Why Project Managers Need to Understand the Strategic Management Process

• Changes in the organization’s mission and strategy

• Project managers must respond to changes with appropriate decisions about future projects and
adjustments to current projects.
• Project managers who understand their organization’s strategy can become effective advocates of projects
aligned with the firm’s mission

The Strategic Management Process: An Overview

• Strategic Management

• Provides the theme and focus of the future direction for the
firm.
• Responding to changes in the external environment—
environmental scanning
• Allocating scarce resources of the firm to improve its
competitive position—internal responses to new action
programs
• Requires strong links among mission, goals, objectives,
strategy, and implementation.

Four of Activities of the Strategic Management Process

1. Review and define the organizational mission.

2. Set long-range goals and objectives.

3. Analyze and formulate strategies to reach

objectives.

4. Implement strategies through projects

Characteristics of Objectives

SPECIFIC Be specific in targeting an obj.

Measurable Established a measurable indicator of progess
ASSIGNABLE Make the obj. assignable to one person for completion
Realistic State what can realistically be done with available
Time related

Project Portfolio Management Problems

• The Implementation Gap
The lack of understanding and consensus on strategy among top management and middle-level (functional) managers
who independently implement the strategy.
• Organization Politics
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Project selection is based on the persuasiveness and power of people advocating the projects.
• Resource Conflicts and Multitasking
The multiproject environment creates interdependency relationships of shared resources which results in the starting,
stopping, and restarting projects.

Benefits of Project Portfolio Management

• Builds discipline into project selection process.
• Links project selection to strategic metrics.
• Prioritizes project proposals across a common set of criteria, rather than on politics or emotion.
• Allocates resources to projects that align with strategic direction.
• Balances risk across all projects.
• Justifies killing projects that do not support organization strategy.
• Improves communication and supports agreement on project goals.

Portfolio of projects by type

Authority regulations, incidents,

customer requirements, etc

To ensure future To improve existing business

business, (quality, efficiency, etc.)

A Portfolio Management System

Selection Criteria
• Financial: payback, net present value (NPV), internal rate of return (IRR)
• Non-financial: projects of strategic importance to the firm.
1. Checklists models
2. Multi-Weighted Scoring Models Use several weighted selection criteria to evaluate project
proposals.

1. Financial Models: The Payback Model

• Measures the time it will take to recover the project

Investment
N=
investment.
• Shorter paybacks are more desirable.
•
•
Emphasizes cash flows, a key factor in business.
Limitations of payback: Annual _ income
1. Ignores the time value of money.
2. Assumes cash inflows for the investment period (and
not beyond).
3. Does not consider profitability.
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2. Financial Models: NPV

The Net Present Value (NPV) model

• Uses management’s minimum desired rate-of-return (discount rate) to compute the present value of all net cash
inflows.
• Positive NPV: the project meets the minimum desired rate of return and is eligible for further consideration

Net Present Value (NPV) and Internal Rate of Return (IRR):

Example Comparing Two Projects
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3. Multi attribute method (weighted scoring method)

Where
n
S = total score for project i
i Si =  sij w j
j =1
s = value for project i, criterium j
ij

w = weight factor for criterium j

j

Project Screening Matrix

Applying a Selection Model

• Project Classification
Deciding how well a strategic or operations project fits the organization’s strategy.
• Selecting a Model
Applying a weighted scoring model to bring projects to closer with the organization’s strategic goals.
Reduces the number of wasteful projects
Helps identify proper goals for projects
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Helps everyone involved understand how and why a project is selected

Project Screening Process

Major Project Proposal/risk analysis

Managing the Portfolio

• Senior Management Input

1. Provide guidance in selecting criteria that are aligned with the organization’s goals
2. Decide how to balance available resources among current projects
• The Priority Team Responsibilities
1. Publish the priority of every project
2. Perform periodic project priority reviews
3. Ensure that the project selection process is open and free of power politics.
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4. Reassess the organization’s goals and priorities

5. Evaluate the progress of current projects

Priority Analysis

Project Portfolio Matrix

Bread-and-butter projects
Involve evolutionary improvements to current products
and services.
Pearls
Represent revolutionary commercial advances using
proven technical advances.
Oysters
Involve technological breakthroughs with high
commercial payoffs.
White elephants
Projects that at one time showed promise but are no
longer viable.

Project Management Structures

• Challenges to Organizing Projects

1. The uniqueness and short duration of projects relative to ongoing longer-term organizational activities
2. The multidisciplinary and cross-functional nature of projects creates authority and responsibility dilemmas.
3. How to transfer the result from the project to the organization
• Choosing an Appropriate Project Management Structure
1. The best system balances the needs of the project
with the needs of the organization.
2. Difficult to change organizational structure => the projects have to adapt to the situation

organizational structure:

1. Functional Organization: Groups employees based on specialized functions or skills, with a clear hierarchy within
each department.
2. Functional Organization (Dedicated Project Teams): Creates project-specific teams within functional departments,
with dedicated staff for the duration of the project.
3. Project Organizational Structure: Teams are structured around individual projects, with a project manager leading
the team, ensuring project-specific focus.
4. Matrix Organization Structure: Combines functional and project structures, where employees report to both
functional managers and project managers simultaneously.

Functional Organization (1)

Functional organization
Different segments of the project are
delegated to respective functional units.
Coordination is maintained through normal
management channels.
Used when the interest of one functional area
dominates the project or one functional area
has a dominant interest in the project’s
success.
Functional Organization of Projects
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Advantages
No Structural Change
Flexibility
In-Depth Expertise
Easy Post-Project Transition
Disadvantages
Lack of Focus
Poor Integration
Slow
Lack of Ownership

Functional Organization (Dedicated Project Teams)

Organizing Projects: Dedicated Teams

Teams operate as separate units under the leadership of a full-time project manager.
In a projectized organization where projects are the dominant form of business, functional departments are responsible
for providing support for its teams.
Advantages
Simple
Fast
Cohesive
Cross-Functional Integration
Disadvantages
Expensive
Internal Strife
Limited Technological Expertise
Difficult Post-Project Transition

Project Organizational Structure

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Matrix Organization Structure

Organizing Projects: Matrix Structure
Hybrid organizational structure (matrix) is overlaid on the normal functional structure.
Two chains of command (functional and project)
Project participants report simultaneously to both functional and project managers.
Matrix structure optimizes the use of resources.
Allows for participation on multiple projects while performing normal functional duties.
Achieves a greater integration of expertise and project requirements.
Who decides?
Project Manager Negotiated Issues Functional Manager
Functional (also Weak or Lightweight) Form
Matrices in which the authority of the functional manager predominates and the project manager has indirect authority.
Balance (or Middleweight) Form
The traditional matrix form in which the project manager sets the overall plan and the functional manager determines how work to be
done.
Strong (Heavyweight) Form
Resembles a project team in which the project manager has broader control and functional departments act as subcontractors to the
project.
Advantages
Efficient
Strong Project Focus
Easier Post-Project Transition
Flexible
Disadvantages
Dysfunctional Conflict
Infighting
Stressful
Slow

Network Organizations

An alliance of several organizations for the purpose of creating products or services.

A “hub” or “core” firm with strong core competencies outsources key activities to a collaborative cluster of satellite
organizations.
Different companies makes a temporarily organization for solving a specific challenge
Tight or loose network
1. Formal temporarily organization
2. Open source community

Organizational Culture
Organizational Culture Defined
• A system of shared norms, beliefs, values, and assumptions which bind people together, thereby creating shared
meanings.
• The “personality” of the organization that sets it apart from other organizations.
1. Provides a sense of identify to its members.
2. Helps legitimize the management system of the organization.
3. Clarifies and reinforces standards of behavior

Key Dimensions Defining an Organization's Culture

through a series of scales. Each dimension represents an aspect of organizational culture, with opposite characteristics on each
end. Here’s an explanation of each dimension:
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1. Member Identity:
o Ranges from Job-focused (where employees identify with their job or profession) to Organization-focused
(where employees identify with the organization as a whole).
2. Team Emphasis:
o Ranges from Individual (emphasizing individual contributions) to Group (emphasizing teamwork and
collective efforts).
3. Management Focus:
o Ranges from Task-focused (prioritizing task
completion and productivity) to People-focused
(prioritizing employee well-being and
development).
4. Unit Integration:
o Ranges from Independent (where departments or
units operate separately) to Interdependent (where
departments collaborate and work cohesively).
5. Control:
o Ranges from Loose (with minimal supervision and
autonomy) to Tight (with strict oversight and
control over employee actions).
6. Risk Tolerance:
o Ranges from Low (an aversion to risk, preferring
stability) to High (a tolerance for risk, encouraging
innovation and experimentation).
7. Reward Criteria:
o Ranges from Performance-based (where rewards
are tied to achievements and results) to Other
(where rewards are based on factors other than
performance, such as seniority).
8. Conflict Tolerance:
o Ranges from Low (discouraging conflict and maintaining harmony) to High (accepting and even
encouraging conflict as a means of improving ideas and solutions).
9. Means-Ends Orientation:
o Ranges from Means (focusing on the processes used to achieve results) to Ends (focusing on the outcomes
or results themselves).
10. Open-System Focus:

• Ranges from Internal (emphasizing internal factors and stability) to External (emphasizing adaptability to external
changes and influences).

These dimensions help define an organization’s culture and determine its overall approach to work, collaboration, management,
and risk. The balance along these scales shapes the organization’s identity, how it operates, and how it is perceived by employees
and outsiders.