2.2 Importance of Linking Corporate and Project Strategies

"Many of the key components of the strategic planning process, such as internal analysis, organizational structures, and control systems have strong links to project management processes and activities, and thereby strongly influence intended corporate and business strategies" (Jamieson and Morris, 2004, p. 177).

"The larger or more significant the project, the more important it is that the link to corporate strategy be established. No one in her right mind will commit significant corporate resources and funds to a project that does little or nothing to further corporate objectives" (Hartman, 2000, p. 37).

The elements of strategy that are addressed by the initiation of a project, or a number of projects, are often of great importance to achieving the strategic goals. The type of projects that are used at the cutting edge of strategic implementation include business process re-engineering or process improvement, marketing activities oriented towards specific objectives, business-wide (and increasingly supply chain-wide) information technology introduction, mergers, and so on. There are also many smaller projects that exist within organizations that are also supporting the strategic change initiated by the larger projects. These types of projects might be minor office refurbishments, small scale office reorganizations, or changes in operating procedures. What is important to recognize is that the success of all these projects collectively is fundamental to achieving the strategic objectives of the organization. Examples of corporate (or business) strategic goals which may shape project strategy are:

• Maintenance of a set share of the market
• Increased growth or profits
• Social or environmental responsibility
• Improved efficiency
• Diversification or concentration

See the figure below for a schematic representation of the linkage between corporate and project strategy.

Figure 2.1 Linking Corporate and Project Strategy
Copyright ©1999 R. J. Turner. Handbook of Project-Based Management. 2nd ed. Berkshire, England: McGraw-Hill UK. This material is used with permission from McGraw Hill UK.

Project strategy is influenced by a number of factors. The project inputs will come from the external environment in which the project "lives" and will determine to a large extent the design of the internal project processes needed to achieve the project deliverables. The external environmental factors that will influence the project are more likely identical to the strategic factors that led to the project being initiated. These external factors must be reexamined at the early stages of the project front-end definition work when the project specific strategy is being formulated to see if conditions in the external environment have changed. Because there are many types of project there is no single best strategy that is suitable for all projects. The project strategy adopted is dependent on the type of project, its objectives, the constraints that apply and the opportunities that exist for its execution. The project strategy should be encapsulated in a Project Strategy Plan (also often called the Project Execution Plan). This formalizes the strategic decision making process and allows the project strategy to be communicated to the project team and appropriate stakeholders. However, this communication is a two-way process and those receiving the plan should be given the opportunity to question the contents of the plan, and then be asked to "buy into" the strategy proposed.