Organizational context - Revision history

S210284: /* Centralization */

2022-03-22T14:41:36Z

Centralization

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	=== Centralization ===		=== Centralization ===

	Centralization refers to the organizational setup regarding the allocation of authority to the top managers to make decisions. This concept is related to the vertical differentiation which distinguish organizational members based on the level of authority that each member can have. Authority enables freedom for an individual to make a decision about certain things. Commonly, top managers in an organization hold the highest authority to make decisions for the organizational activities because they are perceived to be knowledgeable about the business and skillful in managing the organizational value creation process. A study claims that managerial self-efficacy influences managers' organizational attainments both directly and through its effects on their goal setting and analytic thinking <ref name="Wood1989" /> . Thus, to an extent, the performance of an organization can infer how well the organizational members make decisions, or in another word, exercising authority.		Centralization refers to the organizational setup regarding the allocation of authority to the top managers to make decisions. This concept is related to the vertical differentiation which distinguish organizational members based on the level of authority that each member can have. Authority enables freedom for an individual to make a decision about certain things. Commonly, top managers in an organization hold the highest authority to make decisions for the organizational activities because they are perceived to be knowledgeable about the business and skillful in managing the organizational value creation process. A study claims that managerial self-efficacy influences managers' organizational attainments both directly and through its effects on their goal setting and analytic thinking<ref name="Wood1989" /> . Thus, to an extent, the performance of an organization can infer how well the organizational members make decisions, or in another word, exercising authority.

	Moreover, as organization always comprises of more than one person and one activity, it is difficult that one person can oversee all the activities and make all the decisions there are in the value creation process. This raised the issue of how much centralization, or decentralization, an organization should implement in order to have the right people making the right decisions. Decentralization refers to the allocation of authority to the organizational members in the lower levels of the hierarchy. A decentralized organization is when the lower-level employees have the authority to make decisions and perform activities. The outcome of the decisions made by those who have authority can affect the organization effectiveness because all organizational activities utilize the organization's resources. This reflects to the sharing of responsibility and accountability among the organizational members. The more authority given to an individual, the more accountability that the individual needs to hold.		Moreover, as organization always comprises of more than one person and one activity, it is difficult that one person can oversee all the activities and make all the decisions there are in the value creation process. This raised the issue of how much centralization, or decentralization, an organization should implement in order to have the right people making the right decisions. Decentralization refers to the allocation of authority to the organizational members in the lower levels of the hierarchy. A decentralized organization is when the lower-level employees have the authority to make decisions and perform activities. The outcome of the decisions made by those who have authority can affect the organization effectiveness because all organizational activities utilize the organization's resources. This reflects to the sharing of responsibility and accountability among the organizational members. The more authority given to an individual, the more accountability that the individual needs to hold.
	[[File:Centralization_Decentralization.jpg\|400px\|thumb\|right\|Brief comparison between centralization and decentralization]]		[[File:Centralization_Decentralization.jpg\|400px\|thumb\|right\|Brief comparison between centralization and decentralization]]

	Centralization and decentralization are on the opposite ends of the authority spectrum. A highly-centralized organizations will have most of the decisions made by the top managers. They can gain the advantage of top managers being able to control of most of the aspects in the organization. However, if there are too many decisions to be made, one manager may only be able to comprehend a partial amount of them effectively given his cognitive limit. Thus, the cognitive limits of those who hold the authority will determine how comprehensive the organization is in making strategic decisions <ref name="Fredrickson1986" />, affecting the organizational effectiveness. On the contrary, a highly-decentralized organization gains the advantage of high flexibility and responsiveness. This is because lower-level managers can make decisions at the point of where the decision problem is created. A study also suggested that a decentralized structure accommodates the organizational members' cognitive limitations <ref name="Fredrickson1986" />. Therefore, all of the decisions can be made more efficiently in a more decentralized organization because they are divided among the individuals and so each individual can utilize his cognitive ability on a more focus scope. However, decentralization can lead to a more difficult coordination among the organization as more individuals are making decisions on their own behalf.		Centralization and decentralization are on the opposite ends of the authority spectrum. A highly-centralized organizations will have most of the decisions made by the top managers. They can gain the advantage of top managers being able to control of most of the aspects in the organization. However, if there are too many decisions to be made, one manager may only be able to comprehend a partial amount of them effectively given his cognitive limit. Thus, the cognitive limits of those who hold the authority will determine how comprehensive the organization is in making strategic decisions<ref name="Fredrickson1986" />, affecting the organizational effectiveness. On the contrary, a highly-decentralized organization gains the advantage of high flexibility and responsiveness. This is because lower-level managers can make decisions at the point of where the decision problem is created. A study also suggested that a decentralized structure accommodates the organizational members' cognitive limitations<ref name="Fredrickson1986" />. Therefore, all of the decisions can be made more efficiently in a more decentralized organization because they are divided among the individuals and so each individual can utilize his cognitive ability on a more focus scope. However, decentralization can lead to a more difficult coordination among the organization as more individuals are making decisions on their own behalf.

	== Organizational context in project management ==		== Organizational context in project management ==

S210284: /* Differentiation */

2022-03-22T14:41:20Z

Differentiation

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	=== Differentiation ===		=== Differentiation ===

	Differentiation is the process by which an organization allocates people and resources to organizational tasks and establishes the task and authority relationships that allow the organization to achieve its goals <ref name="Jones2013" />. Differentiation implementation results in the organizational chart with two dimensions: horizontal and vertical.		Differentiation is the process by which an organization allocates people and resources to organizational tasks and establishes the task and authority relationships that allow the organization to achieve its goals<ref name="Jones2013" />. Differentiation implementation results in the organizational chart with two dimensions: horizontal and vertical.

	Vertical differentiation refers to the way an organization designs its hierarchy of authority and creates reporting relationships to link organizational roles and subunits <ref name="Jones2013" />. When it comes to authority, it is about the individual's possession of power and control. Generally, the top level managers hold more authority as they direct and control the activities in the organization while lower level employees have less authority and their roles emphasize more on the execution of tasks and activities. Thus, the vertical differentiation reflects on the individual's cognitive limitations. So, the more member an organization has, the more probability that the vertical differentiation is high.		Vertical differentiation refers to the way an organization designs its hierarchy of authority and creates reporting relationships to link organizational roles and subunits<ref name="Jones2013" />. When it comes to authority, it is about the individual's possession of power and control. Generally, the top level managers hold more authority as they direct and control the activities in the organization while lower level employees have less authority and their roles emphasize more on the execution of tasks and activities. Thus, the vertical differentiation reflects on the individual's cognitive limitations. So, the more member an organization has, the more probability that the vertical differentiation is high.

	On the other hand, Horizontal differentiation refers to the way an organization groups organizational tasks into roles and roles into subunits (functions and divisions) <ref name="Jones2013" />. The subunits are established based on the task which suits the expertise of their members. They can be established in two forms: functions and divisions. A function is a subunit composed of individuals with similar professional background and set of knowledge and skills who work on specialized tasks. As the subunits are only focused on their scope of work, it induces the learning process and improving the individual's knowledge and skills. On the other hand, a division is a subunit composed of individuals who have different backgrounds with different knowledge and skills set, working collectively to create a specific output. Thus, subunits in the form of divisions can be beneficial for performing complex tasks or innovative projects. Overall, horizontal differentiation can lead to improvements in the organizational capabilities as well as the control over organizational activities <ref name="Jones2013" />. Moreover, when subunits are to be established, the work procedures, authority and responsibility of the individuals are explicitly specified. Thus, the number of different subunits that an organization possesses can reflect the organization’s complexity <ref name="Jones2013" />.		On the other hand, Horizontal differentiation refers to the way an organization groups organizational tasks into roles and roles into subunits (functions and divisions)<ref name="Jones2013" />. The subunits are established based on the task which suits the expertise of their members. They can be established in two forms: functions and divisions. A function is a subunit composed of individuals with similar professional background and set of knowledge and skills who work on specialized tasks. As the subunits are only focused on their scope of work, it induces the learning process and improving the individual's knowledge and skills. On the other hand, a division is a subunit composed of individuals who have different backgrounds with different knowledge and skills set, working collectively to create a specific output. Thus, subunits in the form of divisions can be beneficial for performing complex tasks or innovative projects. Overall, horizontal differentiation can lead to improvements in the organizational capabilities as well as the control over organizational activities<ref name="Jones2013" />. Moreover, when subunits are to be established, the work procedures, authority and responsibility of the individuals are explicitly specified. Thus, the number of different subunits that an organization possesses can reflect the organization’s complexity<ref name="Jones2013" />.
	[[File:Differentiation.jpg\|400px\|thumb\|right\|Organizational chart configured by differentiations]]		[[File:Differentiation.jpg\|400px\|thumb\|right\|Organizational chart configured by differentiations]]

	Overall, the vertical and horizontal differentiations are about constructing a structured relationship network among the organizational members. As much differentiations can help shape the organizational capabilities, they can also render out the organizational effectiveness in the value-creation process as well. This is because more work is needed to be done to ensure conformity in all the aspects given the differences among the members. Therefore, differentiations can be seen as one of the sources for organizational complexity <ref name="Hall1972" />, and thus can create difficulties for an organization to achieve its goals. However, a study suggested that differentiations can promote higher control over the organization <ref name="Ouchi1977" />. When looking at the horizontal perspective, tasks of same specialty are groups and so they can be monitored by a specific control measure. As result, the study shows that the control measures for the activities are shown to be more completed as differentiation increases. Overall, it is important that an organization implement vertical and horizontal differentiations at the level that facilitate the work process towards the goals.		Overall, the vertical and horizontal differentiations are about constructing a structured relationship network among the organizational members. As much differentiations can help shape the organizational capabilities, they can also render out the organizational effectiveness in the value-creation process as well. This is because more work is needed to be done to ensure conformity in all the aspects given the differences among the members. Therefore, differentiations can be seen as one of the sources for organizational complexity<ref name="Hall1972" />, and thus can create difficulties for an organization to achieve its goals. However, a study suggested that differentiations can promote higher control over the organization<ref name="Ouchi1977" />. When looking at the horizontal perspective, tasks of same specialty are groups and so they can be monitored by a specific control measure. As result, the study shows that the control measures for the activities are shown to be more completed as differentiation increases. Overall, it is important that an organization implement vertical and horizontal differentiations at the level that facilitate the work process towards the goals.

	=== Centralization ===		=== Centralization ===

S210284: /* Organizational Theory */

2022-03-22T14:40:58Z

Organizational Theory

S210284: /* Organization */

2022-03-22T14:40:26Z

Organization

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	== Organization ==		== Organization ==

	An organization is a tool people use to coordinate their actions to obtain something they desire or value - that is, to achieve their goals <ref name="Jones2013" />. In practical sense, an organization comprises of people who put individual contribution to create a value proposition, in form of a product or service, which satisfy the demand of the society. Thus, an organization in itself is merely a conceptual body of the systematic way of how human interacts with each other to achieve something in common. This highlights the importance of how one person in an organization is related to the other and how the collaborations are managed in order to create the desired output. These interrelations and the working procedures can be engineered to promote effectiveness in the organization's value creation process through the concept of organizational theory and design.		An organization is a tool people use to coordinate their actions to obtain something they desire or value - that is, to achieve their goals<ref name="Jones2013" />. In practical sense, an organization comprises of people who put individual contribution to create a value proposition, in form of a product or service, which satisfy the demand of the society. Thus, an organization in itself is merely a conceptual body of the systematic way of how human interacts with each other to achieve something in common. This highlights the importance of how one person in an organization is related to the other and how the collaborations are managed in order to create the desired output. These interrelations and the working procedures can be engineered to promote effectiveness in the organization's value creation process through the concept of organizational theory and design.

	== Organizational Theory ==		== Organizational Theory ==

S210284: /* Main Idea */

2022-03-22T14:40:17Z

Main Idea

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	== Main Idea ==		== Main Idea ==

	As the business environment becomes more fluid and complex, many kinds of challenges arise for an organization to compete and survive in the market. Organizations overcome these challenges by continuously optimizing their resources, improving their operations, and more. These activities are carried out in different style from short-small specialized projects to large-extensive development programs. Generally, all kinds of work requires efforts of a project team and other resources to generate output. Thus, in project management perspective, the project cannot be finished by itself but it requires the project team to perform the work collaboratively to produce the desired project deliverables. The effectiveness of the project team in doing a project can then dictate the quality of the project outcomes. This indicates that the project team members and the project manager are the key to a project success <ref name="Gido2014" /> and it is important to consider this aspect when doing any projects.		As the business environment becomes more fluid and complex, many kinds of challenges arise for an organization to compete and survive in the market. Organizations overcome these challenges by continuously optimizing their resources, improving their operations, and more. These activities are carried out in different style from short-small specialized projects to large-extensive development programs. Generally, all kinds of work requires efforts of a project team and other resources to generate output. Thus, in project management perspective, the project cannot be finished by itself but it requires the project team to perform the work collaboratively to produce the desired project deliverables. The effectiveness of the project team in doing a project can then dictate the quality of the project outcomes. This indicates that the project team members and the project manager are the key to a project success<ref name="Gido2014" /> and it is important to consider this aspect when doing any projects. This article provides a brief overview of the Organizational Theory and Design and discusses its application of managing the organizational context in project management as well as how projects can contribute to organizational effectiveness.

	== Organization ==		== Organization ==

S210284: /* Centralization */

2022-03-22T14:35:47Z

Centralization

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	Moreover, as organization always comprises of more than one person and one activity, it is difficult that one person can oversee all the activities and make all the decisions there are in the value creation process. This raised the issue of how much centralization, or decentralization, an organization should implement in order to have the right people making the right decisions. Decentralization refers to the allocation of authority to the organizational members in the lower levels of the hierarchy. A decentralized organization is when the lower-level employees have the authority to make decisions and perform activities. The outcome of the decisions made by those who have authority can affect the organization effectiveness because all organizational activities utilize the organization's resources. This reflects to the sharing of responsibility and accountability among the organizational members. The more authority given to an individual, the more accountability that the individual needs to hold.		Moreover, as organization always comprises of more than one person and one activity, it is difficult that one person can oversee all the activities and make all the decisions there are in the value creation process. This raised the issue of how much centralization, or decentralization, an organization should implement in order to have the right people making the right decisions. Decentralization refers to the allocation of authority to the organizational members in the lower levels of the hierarchy. A decentralized organization is when the lower-level employees have the authority to make decisions and perform activities. The outcome of the decisions made by those who have authority can affect the organization effectiveness because all organizational activities utilize the organization's resources. This reflects to the sharing of responsibility and accountability among the organizational members. The more authority given to an individual, the more accountability that the individual needs to hold.
	[[File:Centralization_Decentralization.jpg\|400px\|thumb\|right\|~~Organizational chart configured by differentiations~~]]		[[File:Centralization_Decentralization.jpg\|400px\|thumb\|right\|Brief comparison between centralization and decentralization]]

	Centralization and decentralization are on the opposite ends of the authority spectrum. A highly-centralized organizations will have most of the decisions made by the top managers. They can gain the advantage of top managers being able to control of most of the aspects in the organization. However, if there are too many decisions to be made, one manager may only be able to comprehend a partial amount of them effectively given his cognitive limit. Thus, the cognitive limits of those who hold the authority will determine how comprehensive the organization is in making strategic decisions <ref name="Fredrickson1986" />, affecting the organizational effectiveness. On the contrary, a highly-decentralized organization gains the advantage of high flexibility and responsiveness. This is because lower-level managers can make decisions at the point of where the decision problem is created. A study also suggested that a decentralized structure accommodates the organizational members' cognitive limitations <ref name="Fredrickson1986" />. Therefore, all of the decisions can be made more efficiently in a more decentralized organization because they are divided among the individuals and so each individual can utilize his cognitive ability on a more focus scope. However, decentralization can lead to a more difficult coordination among the organization as more individuals are making decisions on their own behalf.		Centralization and decentralization are on the opposite ends of the authority spectrum. A highly-centralized organizations will have most of the decisions made by the top managers. They can gain the advantage of top managers being able to control of most of the aspects in the organization. However, if there are too many decisions to be made, one manager may only be able to comprehend a partial amount of them effectively given his cognitive limit. Thus, the cognitive limits of those who hold the authority will determine how comprehensive the organization is in making strategic decisions <ref name="Fredrickson1986" />, affecting the organizational effectiveness. On the contrary, a highly-decentralized organization gains the advantage of high flexibility and responsiveness. This is because lower-level managers can make decisions at the point of where the decision problem is created. A study also suggested that a decentralized structure accommodates the organizational members' cognitive limitations <ref name="Fredrickson1986" />. Therefore, all of the decisions can be made more efficiently in a more decentralized organization because they are divided among the individuals and so each individual can utilize his cognitive ability on a more focus scope. However, decentralization can lead to a more difficult coordination among the organization as more individuals are making decisions on their own behalf.

S210284: /* Bibliography */

2022-03-22T14:34:36Z

Bibliography

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	One main limitation of applying the organizational theory to any organization is that there is no universal solution for designing the organizational structure that ensure the project success. As projects are executed by people, the uniqueness of the individuals contributes to the complexity of the project. Although the organization structure is designed according to theory but there are still some elements which cannot be fully controlled, namely, the individual's moral, the innovation progress of the competitors, the availability of the resources in the environment, etc. Therefore, designing the organizational structure is a continuous process as the organization is affected by the changes in the environment which are unpredictable and uncontrollable.		One main limitation of applying the organizational theory to any organization is that there is no universal solution for designing the organizational structure that ensure the project success. As projects are executed by people, the uniqueness of the individuals contributes to the complexity of the project. Although the organization structure is designed according to theory but there are still some elements which cannot be fully controlled, namely, the individual's moral, the innovation progress of the competitors, the availability of the resources in the environment, etc. Therefore, designing the organizational structure is a continuous process as the organization is affected by the changes in the environment which are unpredictable and uncontrollable.

	== Bibliography ==		== Annotated Bibliography ==

	'''Jones, G. R. (2013). Organizational theory, design, and change (pp. 31-33). Boston: Pearson.'''		'''Jones, G. R. (2013). Organizational theory, design, and change (pp. 31-33). Boston: Pearson.'''

S210284: /* Organizational Design */

2022-03-22T14:33:39Z

Organizational Design

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	Moreover, as organization always comprises of more than one person and one activity, it is difficult that one person can oversee all the activities and make all the decisions there are in the value creation process. This raised the issue of how much centralization, or decentralization, an organization should implement in order to have the right people making the right decisions. Decentralization refers to the allocation of authority to the organizational members in the lower levels of the hierarchy. A decentralized organization is when the lower-level employees have the authority to make decisions and perform activities. The outcome of the decisions made by those who have authority can affect the organization effectiveness because all organizational activities utilize the organization's resources. This reflects to the sharing of responsibility and accountability among the organizational members. The more authority given to an individual, the more accountability that the individual needs to hold.		Moreover, as organization always comprises of more than one person and one activity, it is difficult that one person can oversee all the activities and make all the decisions there are in the value creation process. This raised the issue of how much centralization, or decentralization, an organization should implement in order to have the right people making the right decisions. Decentralization refers to the allocation of authority to the organizational members in the lower levels of the hierarchy. A decentralized organization is when the lower-level employees have the authority to make decisions and perform activities. The outcome of the decisions made by those who have authority can affect the organization effectiveness because all organizational activities utilize the organization's resources. This reflects to the sharing of responsibility and accountability among the organizational members. The more authority given to an individual, the more accountability that the individual needs to hold.
			[[File:Centralization_Decentralization.jpg\|400px\|thumb\|right\|Organizational chart configured by differentiations]]

	Centralization and decentralization are on the opposite ends of the authority spectrum. A highly-centralized organizations will have most of the decisions made by the top managers. They can gain the advantage of top managers being able to control of most of the aspects in the organization. However, if there are too many decisions to be made, one manager may only be able to comprehend a partial amount of them effectively given his cognitive limit. Thus, the cognitive limits of those who hold the authority will determine how comprehensive the organization is in making strategic decisions <ref name="Fredrickson1986" />, affecting the organizational effectiveness. On the contrary, a highly-decentralized organization gains the advantage of high flexibility and responsiveness. This is because lower-level managers can make decisions at the point of where the decision problem is created. A study also suggested that a decentralized structure accommodates the organizational members' cognitive limitations <ref name="Fredrickson1986" />. Therefore, all of the decisions can be made more efficiently in a more decentralized organization because they are divided among the individuals and so each individual can utilize his cognitive ability on a more focus scope. However, decentralization can lead to a more difficult coordination among the organization as more individuals are making decisions on their own behalf.		Centralization and decentralization are on the opposite ends of the authority spectrum. A highly-centralized organizations will have most of the decisions made by the top managers. They can gain the advantage of top managers being able to control of most of the aspects in the organization. However, if there are too many decisions to be made, one manager may only be able to comprehend a partial amount of them effectively given his cognitive limit. Thus, the cognitive limits of those who hold the authority will determine how comprehensive the organization is in making strategic decisions <ref name="Fredrickson1986" />, affecting the organizational effectiveness. On the contrary, a highly-decentralized organization gains the advantage of high flexibility and responsiveness. This is because lower-level managers can make decisions at the point of where the decision problem is created. A study also suggested that a decentralized structure accommodates the organizational members' cognitive limitations <ref name="Fredrickson1986" />. Therefore, all of the decisions can be made more efficiently in a more decentralized organization because they are divided among the individuals and so each individual can utilize his cognitive ability on a more focus scope. However, decentralization can lead to a more difficult coordination among the organization as more individuals are making decisions on their own behalf.

S210284: /* Bibliography */

2022-03-22T14:09:29Z

Bibliography

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	'''Jones, G. R. (2013). Organizational theory, design, and change (pp. 31-33). Boston: Pearson.'''		'''Jones, G. R. (2013). Organizational theory, design, and change (pp. 31-33). Boston: Pearson.'''

	The book discusses three main aspects in managing an organization: organization theory, organizational design, and organizational changes. Each of the three aspects comprises of many elements which altogether form an organization entity as well as the environment that the organization is in. As the organization theory, design, and change are conceptual and difficult to be measured, the book provides many business case studies to illustrate how the three aspects are manifested in the form of organizational performance. Implication ideas of the theories and concepts from the three aspects are also provided throughout the book.		The book discusses three main aspects in managing an organization: organization theory, organizational design, and organizational changes. Each of the three aspects comprises of many elements which altogether form an organization entity as well as the environment that the organization is in. As the organization theory, design, and change are conceptual and difficult to be measured, the book provides many business case studies to illustrate how the three aspects are manifested in the form of organizational performance. Implication ideas of the theories and concepts from the three aspects are also provided throughout the book.

	'''Pinto, J. K. (2000). Understanding the role of politics in successful project management. International Journal of Project Management, 18(2), 85-91.'''		'''Pinto, J. K. (2000). Understanding the role of politics in successful project management. International Journal of Project Management, 18(2), 85-91.'''

	The paper discusses how organizational politics play a part in managing a project. It examines the three modes of power: authority, status, and influence. These factors are one of the key problems for project managers in managing projects in organizations. Thus, the paper provides some practical implications of project politics which enable project managers to oversee the behavioral side of the project. It suggests that successful project managers are aware that politics, used judiciously, can have an extraordinarily positive impact on the implementation of their projects.		The paper discusses how organizational politics play a part in managing a project. It examines the three modes of power: authority, status, and influence. These factors are one of the key problems for project managers in managing projects in organizations. Thus, the paper provides some practical implications of project politics which enable project managers to oversee the behavioral side of the project. It suggests that successful project managers are aware that politics, used judiciously, can have an extraordinarily positive impact on the implementation of their projects.

	'''Winter, M., & Szczepanek, T. (2008). Projects and programmes as value creation processes: A new perspective and some practical implications. International Journal of Project Management, 26(1), 95-103.'''		'''Winter, M., & Szczepanek, T. (2008). Projects and programmes as value creation processes: A new perspective and some practical implications. International Journal of Project Management, 26(1), 95-103.'''

	The paper presents a collective finding about the need of the industry for a more strategic approach to project management which focus more on delivering value and benefits to organizations. The paper refers to Richard Normann’s work about the idea of including value as another core aspect to the triple constraint model. Overall, a new conceptual framework is proposed to implement project and program as value creation process.		The paper presents a collective finding about the need of the industry for a more strategic approach to project management which focus more on delivering value and benefits to organizations. The paper refers to Richard Normann’s work about the idea of including value as another core aspect to the triple constraint model. Overall, a new conceptual framework is proposed to implement project and program as value creation process.

S210284 at 14:09, 22 March 2022

2022-03-22T14:09:17Z

← Older revision		Revision as of 14:09, 22 March 2022
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	One main limitation of applying the organizational theory to any organization is that there is no universal solution for designing the organizational structure that ensure the project success. As projects are executed by people, the uniqueness of the individuals contributes to the complexity of the project. Although the organization structure is designed according to theory but there are still some elements which cannot be fully controlled, namely, the individual's moral, the innovation progress of the competitors, the availability of the resources in the environment, etc. Therefore, designing the organizational structure is a continuous process as the organization is affected by the changes in the environment which are unpredictable and uncontrollable.		One main limitation of applying the organizational theory to any organization is that there is no universal solution for designing the organizational structure that ensure the project success. As projects are executed by people, the uniqueness of the individuals contributes to the complexity of the project. Although the organization structure is designed according to theory but there are still some elements which cannot be fully controlled, namely, the individual's moral, the innovation progress of the competitors, the availability of the resources in the environment, etc. Therefore, designing the organizational structure is a continuous process as the organization is affected by the changes in the environment which are unpredictable and uncontrollable.

			== Bibliography ==

			'''Jones, G. R. (2013). Organizational theory, design, and change (pp. 31-33). Boston: Pearson.'''
			The book discusses three main aspects in managing an organization: organization theory, organizational design, and organizational changes. Each of the three aspects comprises of many elements which altogether form an organization entity as well as the environment that the organization is in. As the organization theory, design, and change are conceptual and difficult to be measured, the book provides many business case studies to illustrate how the three aspects are manifested in the form of organizational performance. Implication ideas of the theories and concepts from the three aspects are also provided throughout the book.

			'''Pinto, J. K. (2000). Understanding the role of politics in successful project management. International Journal of Project Management, 18(2), 85-91.'''
			The paper discusses how organizational politics play a part in managing a project. It examines the three modes of power: authority, status, and influence. These factors are one of the key problems for project managers in managing projects in organizations. Thus, the paper provides some practical implications of project politics which enable project managers to oversee the behavioral side of the project. It suggests that successful project managers are aware that politics, used judiciously, can have an extraordinarily positive impact on the implementation of their projects.

			'''Winter, M., & Szczepanek, T. (2008). Projects and programmes as value creation processes: A new perspective and some practical implications. International Journal of Project Management, 26(1), 95-103.'''
			The paper presents a collective finding about the need of the industry for a more strategic approach to project management which focus more on delivering value and benefits to organizations. The paper refers to Richard Normann’s work about the idea of including value as another core aspect to the triple constraint model. Overall, a new conceptual framework is proposed to implement project and program as value creation process.

	== References ==		== References ==

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	== Organizational Theory ==		== Organizational Theory ==

	Organizational theory is the study of how organizations function and how they affect and are affected by the environment in which they operate <ref name="Jones2013" />. It is essentially the value creation process of the organization by which the organization captures the business opportunity in its environment as convert it into a value proposition to the society. This value proposition could be in the form of products or services. The process of value creation has three stages: input, conversion, and output.		Organizational theory is the study of how organizations function and how they affect and are affected by the environment in which they operate<ref name="Jones2013" />. It is essentially the value creation process of the organization by which the organization captures the business opportunity in its environment as convert it into a value proposition to the society. This value proposition could be in the form of products or services. The process of value creation has three stages: input, conversion, and output.

	[[File:Organization_value_creation.jpg\|300px\|thumb\|right\|Organization's Value Creation Process <ref name="Jones2013" />]]		[[File:Organization_value_creation.jpg\|300px\|thumb\|right\|Organization's Value Creation Process<ref name="Jones2013" />]]

	By going through the stages, the organizational values are created consecutively and how much value is created at each stage is determined by the how effective the organization is in managing each stage. Specifically, the conversion stage contributes to the amount of value created as it determines how the final product or service is created and fit into the value proposition for the customers. As the value proposition is delivered to the customers, its value is realized by the customers. And so, this value realization process induces changes in the environment. The organization receive capital resources, knowledge, and experience from their delivery by which these resources are circled back to the organizational input stage again to repeat the value creation process. The quality of products or services will be subjected to the effectiveness the organization is in process of value creation which affects how well the value proposition meet the customer's expectation. Moreover, the organization's abilities to respond to the environmental changes can also contribute to its success as it links back to the value realization process on the customers' side.		By going through the stages, the organizational values are created consecutively and how much value is created at each stage is determined by the how effective the organization is in managing each stage. Specifically, the conversion stage contributes to the amount of value created as it determines how the final product or service is created and fit into the value proposition for the customers. As the value proposition is delivered to the customers, its value is realized by the customers. And so, this value realization process induces changes in the environment. The organization receive capital resources, knowledge, and experience from their delivery by which these resources are circled back to the organizational input stage again to repeat the value creation process. The quality of products or services will be subjected to the effectiveness the organization is in process of value creation which affects how well the value proposition meet the customer's expectation. Moreover, the organization's abilities to respond to the environmental changes can also contribute to its success as it links back to the value realization process on the customers' side.

	Given that the changes in the organizational environment is uncontrollable, and also affected by the organization itself, it is important for the organization to understands the elements of its value creation process and manage them accordingly. Organization theory is then developed to help managers in the organization understand, diagnose, and respond to emerging organizational needs and problems <ref name="Daft2010" /> and become more effective in the value creation process.		Given that the changes in the organizational environment is uncontrollable, and also affected by the organization itself, it is important for the organization to understands the elements of its value creation process and manage them accordingly. Organization theory is then developed to help managers in the organization understand, diagnose, and respond to emerging organizational needs and problems<ref name="Daft2010" /> and become more effective in the value creation process.

	=== Organizational Environment ===		=== Organizational Environment ===

	The organizational environment is the set of pressures and forces surrounding an organization that have the potential to affect the way it operates and its ability to acquire scarce resources <ref name="Jones2013" />. It can be distinguished into two levels: specific environment and general environment. Specific environment consists of forces from the organization's external stakeholders that directly affect an organization’s value creation process, namely customers, distributors, unions, competitors, suppliers, and government. These stakeholders are involved in how organizational activities are carried out and how efficient and effective the processes are in doing so. A stakeholder can contribute positively to the value creation process, as well as obstruct. For example, suppliers are likely to work coherently with an organization as they both desire similar inducement, for instance, profits from more sales. On the contrary, government, for example, can interfere the way the business is conducted because they have the objective of regulating and controlling the society. Overall, an organization should engage and work closely with the stakeholders in the specific environment to ensure its ability to perform its value creation process.		The organizational environment is the set of pressures and forces surrounding an organization that have the potential to affect the way it operates and its ability to acquire scarce resources<ref name="Jones2013" />. It can be distinguished into two levels: specific environment and general environment. Specific environment consists of forces from the organization's external stakeholders that directly affect an organization’s value creation process, namely customers, distributors, unions, competitors, suppliers, and government. These stakeholders are involved in how organizational activities are carried out and how efficient and effective the processes are in doing so. A stakeholder can contribute positively to the value creation process, as well as obstruct. For example, suppliers are likely to work coherently with an organization as they both desire similar inducement, for instance, profits from more sales. On the contrary, government, for example, can interfere the way the business is conducted because they have the objective of regulating and controlling the society. Overall, an organization should engage and work closely with the stakeholders in the specific environment to ensure its ability to perform its value creation process.

	General environment, on the other hand, consists of six intangible forces which rules over the specific environment and affect the ability of organizations to obtain resources <ref name="Jones2013" />. The forces and their typical constituting elements are as discussed below:		General environment, on the other hand, consists of six intangible forces which rules over the specific environment and affect the ability of organizations to obtain resources<ref name="Jones2013" />. The forces and their typical constituting elements are as discussed below:
	[[File:Organization_environment_forces.jpg\|400px\|thumb\|right\|Organizational Environment <ref name="Jones2013" />]]		[[File:Organization_environment_forces.jpg\|400px\|thumb\|right\|Organizational Environment<ref name="Jones2013" />]]

	* '''Demographic and cultural forces''': The forces include the characteristics of the society and its people, namely, age, lifestyle, values and norms, etc. They have the potential to create heavy influence to organization's customers as it is directly related to the perception and preference of the individuals.		* '''Demographic and cultural forces''': The forces include the characteristics of the society and its people, namely, age, lifestyle, values and norms, etc. They have the potential to create heavy influence to organization's customers as it is directly related to the perception and preference of the individuals.
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	The general forces are shared among the society that accommodates the organization and its business environment. Therefore, the general environment is dynamic in nature and beyond organization's control. Organizations are able to influence the forces to make them become in favor to their business through the value creation process, but it is only to a limited extent. This raises the issue of environmental uncertainty which can render the organization's ability to obtain resources.		The general forces are shared among the society that accommodates the organization and its business environment. Therefore, the general environment is dynamic in nature and beyond organization's control. Organizations are able to influence the forces to make them become in favor to their business through the value creation process, but it is only to a limited extent. This raises the issue of environmental uncertainty which can render the organization's ability to obtain resources.

	Furthermore, given that specific forces are a part of a society which holds general forces, it implies that general forces are presiding over the specific forces. This relationship among the forces creates environmental complexity for the organization. The more interrelationships there are among the forces, the more effort is needed to manage them. A study suggests that uncertainty and the degree of the complexity and dynamics of the environment should not be considered as constant features in an organization <ref name="Duncan1972" />. Therefore, organizations need to assess these factors continuously and adapt to the changes to retain its effectiveness.		Furthermore, given that specific forces are a part of a society which holds general forces, it implies that general forces are presiding over the specific forces. This relationship among the forces creates environmental complexity for the organization. The more interrelationships there are among the forces, the more effort is needed to manage them. A study suggests that uncertainty and the degree of the complexity and dynamics of the environment should not be considered as constant features in an organization<ref name="Duncan1972" />. Therefore, organizations need to assess these factors continuously and adapt to the changes to retain its effectiveness.

	=== Organizational Effectiveness ===		=== Organizational Effectiveness ===
	[[File:Organization_effectiveness_measure.jpg\|450px\|thumb\|right\|Approaches to Measuring Organizational Effectiveness <ref name="Jones2013" />]]		[[File:Organization_effectiveness_measure.jpg\|450px\|thumb\|right\|Approaches to Measuring Organizational Effectiveness<ref name="Jones2013" />]]

	The survival of an organization depends on how effective the organization is in obtaining the scarce resources, from the environment of which it is in, and creating value. Thus, an effective organization is the one that can implement one or more of the following approaches<ref name="Jones2013" />:		The survival of an organization depends on how effective the organization is in obtaining the scarce resources, from the environment of which it is in, and creating value. Thus, an effective organization is the one that can implement one or more of the following approaches<ref name="Jones2013" />:
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	=== Stakeholders ===		=== Stakeholders ===

	[[File:Stakeholders_identification.jpg\|450px\|thumb\|right\|Traditional Stakeholders of Organization <ref name="Jones2013" />]]		[[File:Stakeholders_identification.jpg\|450px\|thumb\|right\|Traditional Stakeholders of Organization<ref name="Jones2013" />]]
	For an organization to be able to create value, it needs the resources and instructions in order to do so. Here, this is where stakeholders play an important role in driving the organization. Stakeholders are the people who have an interest, claim, or stake in an organization, in what it does, and in how well it performs <ref name="Jones2013" />. They participate in the organization with the aim to gain inducements through making contributions to the organizational activities, based on their roles and abilities. There are many types of stakeholders, of which they contribute to the organization through different means with expectation for different inducements. Generally, the stakeholders of an organization can be distinguished into two main groups based on their involvement in the organizational value creation process: inside stakeholder and outside stakeholder. The inside stakeholders include shareholder, managers, and workforce who are directly involved in carrying out the value creation process. On the other hand, the outside stakeholders include all entities which are a part of the organizational environment and perceived to be affected by the organization's activity.		For an organization to be able to create value, it needs the resources and instructions in order to do so. Here, this is where stakeholders play an important role in driving the organization. Stakeholders are the people who have an interest, claim, or stake in an organization, in what it does, and in how well it performs<ref name="Jones2013" />. They participate in the organization with the aim to gain inducements through making contributions to the organizational activities, based on their roles and abilities. There are many types of stakeholders, of which they contribute to the organization through different means with expectation for different inducements. Generally, the stakeholders of an organization can be distinguished into two main groups based on their involvement in the organizational value creation process: inside stakeholder and outside stakeholder. The inside stakeholders include shareholder, managers, and workforce who are directly involved in carrying out the value creation process. On the other hand, the outside stakeholders include all entities which are a part of the organizational environment and perceived to be affected by the organization's activity.

	As each stakeholder is motivated to put in contributions by their own set of self-interests and personal goals. The organization must be monitored by the management body to ensure that all the stakeholders are working in an effective and efficient way while not putting their personal agendas over the common goal. For example, an organization that operates in a very dynamic environment should continuously search for ways to coordinate their employees to keep their ability to create value for the organization at a desired level. As shareholders evaluate an organization by the return they receive on their investment <ref name="Jones2013" />, the top management body should motivate the stakeholders with new proposition of inducements that fit the changing situations as well.		As each stakeholder is motivated to put in contributions by their own set of self-interests and personal goals. The organization must be monitored by the management body to ensure that all the stakeholders are working in an effective and efficient way while not putting their personal agendas over the common goal. For example, an organization that operates in a very dynamic environment should continuously search for ways to coordinate their employees to keep their ability to create value for the organization at a desired level. As shareholders evaluate an organization by the return they receive on their investment<ref name="Jones2013" />, the top management body should motivate the stakeholders with new proposition of inducements that fit the changing situations as well.

	== Organizational Design ==		== Organizational Design ==