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Some differences for project managers…

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Some differences for project managers working in supplier organizations and in owner organizations

By Alan Stretton

Sydney, Australia

 


TWO TYPES OF ORGANIZATIONS THAT UNDERTAKE PROJECTS

 From time to time various writers in the project management literature have distinguished between two types of organizations that undertake projects. I have called these project-based organizations, and production-based organizations. I borrowed from Cooke-Davies 2002 in describing them as such, and from Archibald et al 2012 (who use different descriptors) in defining them (e.g. Stretton 2015b)

  • 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.

Other writers have used different descriptors for these, as will be seen in a moment. However, comparatively little has been written about the very substantial differences for project managers who work in project-based organizations on the one hand, and in production-based organizations on the other.

One author who has done so is Taggart 2015. He describes the above two types of organizations as Supplier Organizations (SOs) and Owner Organizations (OOs) respectively. As is indicated in the title of this article, I propose to mainly use Taggart’s descriptors in the following, mainly because of their handy abbreviations.

Another author who has published work in this area is Lehmann 2016, who describes projects undertaken within these two types of organization as “customer projects”, and “internal projects”, respectively. Lehmann has drawn up a table of differences in the environment and the requirements that project managers are facing with these two different kinds of projects, and I will draw on this in the following enquiry about the nature of these differences, and some consequences.

I also note that my own direct experience has been exclusively in Supplier Organizations, and I will be drawing on this experience to some extent in the following. When it comes to Owner Organizations I can only quote other writers.

But first, we discuss an apparent imbalance in the literature regarding materials on these two types of organization.

APPARENT IMBALANCES IN THE LITERATURE

The project management literature tends to focus on OOs

It appears that the focus of the project management literature is primarily on owner organizations. As Taggart 2015 observed,

Conventionally, either directly or by implication, the project management bodies of knowledge focus on the role of the Owner Organization (OO)……

I had been broadly aware of this since the late 1960s, when I first read Cleland & King’s pioneering book on Systems Analysis and Project Management (Cleland & King 1968). This book was obviously highly relevant to defence-acquisition projects, but had little relevance for my organisation, Civil & Civic, which was a supplier organization in the building and construction domain. I remember thinking at the time that this was probably due to the different application areas being considered.

However, when I later read Kerzner’s classic book Project Management: A systems approach to planning, scheduling and controlling (Kerzner 1979), I began to realise that the focus of both books was on the owner organization.

In contrast, Civil & Civic was a supplier organization, so this recognition gave me some (preliminary) understanding of why a good deal of the material in both books was substantially irrelevant to us.

However, there appear be more project people practicing in SOs than in OOs

The following contention by Taggart really caught my eye.

More…

To read entire paper, click here

 

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.  

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 170 professional articles and papers. Alan can be contacted at [email protected].

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