This chapter examined two major characteristics of the parent organization that affect the implementation and completion of projects. The first is the formal structure of the organization and how it chooses to organize and manage projects. Although the individual project manager may have very little say as to how the firm chooses to manage projects, he or she must be able to recognize the options available as well as the inherent strengths and weaknesses of different approaches.

Three basic project management structures were described and assessed as to their weaknesses and strengths. Only under unique circumstances can a case be made for managing a project within the normal functional hierarchy. When thinking only in terms of what is best for the project, the creation of an independent project team is clearly favored. However, the most effective project management system appropriately balances the needs of the project with those of the parent organization. Matrix structures emerged out of the parent organization's need to share personnel and resources across multiple projects and operations while creating legitimate project focus. The matrix approach is a hybrid organizational form that combines elements of both the functional and project team forms in an attempt to realize the advantages of both. Matrix management, while good in theory, has often proven difficult to implement. Many firms have abandoned a matrix after several years of experimentation, citing it as a totally unworkable structure prone to anarchy. Others have found it to be quite effective. These mixed results may, in part, be attributable to the fact that there are different kinds of matrices depending on the relative influence of the functional managers and the project managers.

The second major characteristic of the parent organization that was discussed in this chapter is the concept of organizational culture. Organizational culture is the pattern of beliefs and expectations shared by an organization's members. Culture includes the behavioral norms, customs, shared values, and the "rules of the game" for getting along and getting ahead within the organization. It is important for project managers to be "culture sensitive" so that they can develop strategies and responses that are likely to be understood and accepted as well as avoid violating key norms that would jeopardize their effectiveness within the organization.

The interaction between project management structure and organizational culture is a complicated one. We have suggested that in certain organizations, culture encourages the implementation of projects. In this environment the project management structure used plays a less decisive role in the success of the project. Conversely, for other organizations in which the culture stresses internal competition and differentiation, just the opposite may be true. The prevailing norms, customs, and attitudes inhibit effective project management, and the project management structure plays a more decisive role in the successful implementation of projects. At a minimum, under adverse cultural conditions, the project manager needs to have significant authority over the project team; under more extreme conditions firms should use dedicated project teams to complete critical projects. In both cases, the managerial strategy should be to insulate project work from the dominant culture so that a more positive "subculture" can emerge among project participants.

The project management structure of the organization and the culture of the organization are major elements of the environment in which a project is initiated. Subsequent chapters will examine how project managers and professionals work within this environment to successfully complete projects.

The emergence of network organizations consisting of different companies working together to produce new products and services is reshaping the project management landscape. It is rare to find significant projects being done 100 percent internally. The key is being able to coordinate the efforts of participants from other organizations.