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Commonalities and Differences

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Some commonalities and differences between managing in production-based and in project-based organizations

By Alan Stretton

Sydney, Australia

 



INTRODUCTION

In a recent issue of this journal (Stretton 2017e) I discussed some differences for project managers between those who work in Supplier Organizations (SOs) and those who work in Owner Organizations (OOs), using descriptors by Taggart 2015. That article began by pointing out that the project management literature tends to focus on OOs. However, according to Taggart 2015 and Lehmann 2016, there appear be more project people practicing in SOs than in OOs. In light of this, it would appear that project management in SOs does not get the coverage in the literature that its importance in terms of numbers of project managers involved in them appears to warrant. That article was a contribution to helping redress this imbalance.

This article is a further contribution in this context. My previous article tended to focus on how differences between the situations in these two types of organizations affect what project managers actually do, and how they operate. In this article I will move from project managers per se to look at differences, and some commonalities, in two key management processes – namely strategic planning / management, and operational management – between the two types of organisations.

In Stretton 2017e I also noted that I have previously described SOs as project-based organizations, and OOs as production-based. In using these descriptors, I borrowed from Cooke-Davies 2002 in describing them as such, and from Archibald et al 2012 (who use different descriptors) in defining them as follows.

  • Project-based organizations derive most (if not all) of their revenue and/or other benefits from creating and delivering projects / programs to external customers.
  • Production-based organizations derive most (if not all) of their revenue and/or benefits from producing and selling products and services. They utilize projects to create new, or improve existing, products and services; enter new markets; or otherwise improve or change their organizations.

In this article, I will use the latter terminologies in discussing the following:

  • Commonalities and differences in strategic planning between production-based and project-based organizations
  • Commonalities and differences in operational management between production-based and project-based organizations
  • Differences between strategic management and operations management in both types of organizations

COMMONALITIES AND DIFFERENCES IN STRATEGIC PLANNING BETWEEN PRODUCTION-BASED AND PROJECT-BASED ORGANIZATIONS

Apparent commonalities

Production-based organizations derive most (if not all) of their revenue and/or benefits from producing and selling products and services. Therefore their strategic planning processes are concerned with securing the future for the products and services they produce and sell.

But project-based organizations are also concerned with securing the future of their project management services. So their strategic planning processes have a good deal in common.

On a personal note, I had seven years experience in the strategic planning group for Lend Lease Corporation, which was the holding company for (then) ten operational companies – some project-based, and some production-based. This could be seen as implying that Lend Lease was, at least in part, a production-based organization. But the main thrust of the Lend Lease operations was project-based, and the internal mixture was not a problem. We had no conflict between the strategic management of the operating companies that I can recall.

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Editor’s note: Alan Stretton, PhD (Hon), Life Fellow of AIPM (Australia), is a pioneer in the field of professional project management and one of the most widely recognized voices in the practice of program and project management.   Long retired, Alan is still tackling some of the most challenging research and writing assignments; he is a frequent contributor to the PM World Journal. See his author profile below.



About the Author


Alan Stretton, PhD

Faculty Corps, University of Management
and Technology, Arlington, VA (USA)
Life Fellow, AIPM (Australia)

 


Alan Stretton
is one of the pioneers of modern project management. He is currently a member of the Faculty Corps for the University of Management & Technology (UMT), USA. In 2006 he retired from a position as Adjunct Professor of Project Management in the Faculty of Design, Architecture and Building at the University of Technology, Sydney (UTS), Australia, which he joined in 1988 to develop and deliver a Master of Project Management program.   Prior to joining UTS, Mr. Stretton worked in the building and construction industries in Australia, New Zealand and the USA for some 38 years, which included the project management of construction, R&D, introduction of information and control systems, internal management education programs and organizational change projects. He has degrees in Civil Engineering (BE, Tasmania) and Mathematics (MA, Oxford), and an honorary PhD in strategy, programme and project management (ESC, Lille, France). Alan was Chairman of the Standards (PMBOK) Committee of the Project Management Institute (PMI®) from late 1989 to early 1992. He held a similar position with the Australian Institute of Project Management (AIPM), and was elected a Life Fellow of AIPM in 1996. He was a member of the Core Working Group in the development of the Australian National Competency Standards for Project Management. He has published over 180 professional articles and papers. Alan can be contacted at alanailene@bigpond.com.au.

To see more works by Alan Stretton, visit his author showcase in the PM World Library at http://pmworldlibrary.net/authors/alan-stretton/.