2.2 Project Management and Organization Levels

Project Management and organization levels

Organizations have various levels of management:

  • Strategic level
    Focus is the organization as a whole and devised and overseen by senior management (example: adding 3.4% to market share within the next two years)
  • Tactical level
    Focus is on major divisions/functions and is carried out by middle management and are carried out to meet strategic level plan goals (example: Marketing plans for the 3.4% market share increase)
  • Operational level
    Focused is departmental to individual and is carried out by middle to supervisor level and is a component of tactical management (example: Increasing rate of marketing email delivery to 97.4% by the end of the year)

The reasons projects are initiated can be internal (strategic planning/direction, improvement of existing structures, etc.), or external (market demand/opportunity/threat, customer requests/orders/complaints, industry trends, governmental/legal/professional requirements).

Projects are created to fulfill goals set at all organization levels. As discussed in the Introduction chapter, PM[1]I® has done an excellent job in defining management from a perspective of project management for all of the above mentioned levels and relationship between them is explained in the following graph.

[1] PMI is a registered trademark of the Project Management Institute, Inc.

pmbok guide illustration

The following table summarizes differences among these levels of management:

pmbok guide project management

Table 2-1: Comparative Overview of Project, Program, and Portfolio Management 

“Many organizational structures include strategic, middle management, and operational levels. The project manager may interact with all three levels depending on factors such as:

  • Strategic importance of the project,
  • Capacity of stakeholders to exert influence on the project,
  • Degree of project management maturity,
  • Project management systems, and
  • Organizational communications.

This interaction determines project characteristics such as:

  • Project manager’s level of authority,
  • Resource availability and management,
  • Entity controlling the project budget,
  • Project manager’s role, and
  • Project team composition.[2]

The focus of the PMBOK[3]® Guide is on individual and stand-alone projects[4].  In regards to organizational levels and types of project-related structures (i.e. portfolios and programs) the ultimate test for a portfolio, program, or project’s success is whether it did contribute to its respective strategic initiative.  For instance your organization after years of preparation enters into the Far East market through a Foreign Direct Investment (FDI) agreement with a major manufacturing firm in Taiwan.  You are a mid-level project manager and were tasked to set up a computerized inventory control structure for the new plant slated to open by the end of the year.  The tie between this project and the strategic initiative (expanding into a large market in order to enjoy economy of scale in orders and marketing) your project must maximize the synergy between your host office’s inventory control systems and that of the newly built plant in Taiwan.

As the strategic goal is refined to lower grain level tactical and operational targets it loses more and more of its original intent (i.e. becomes more local and operational-oriented)  Therefore, since you were never briefed on the strategic goals of your project and most of the goals set for you are at division level; after your deployment to Taiwan you bought into the idea of building a quick-and-dirty inventory management system with as little investment as possible (under the pressure from the local managers focused on their operational goals).

You end up building a computerized inventory control system that is cost less than the original estimate and is delivered earlier than planned because of the reduced scope and complexity.  As far as your immediate manager in the headquarters and local managers in Taiwan are concerned your project was a major success.  However, since integration of the system in Taiwan with the inventory control structure used by your host office was not on your agenda the strategic goals for your project (despite meeting local office’s goals) were not met at all[5].

Orchestrating operations, portfolios, programs and projects as the above story demonstrates is a challenging and complex task and as such in recent years there has been a growing number of organizations that have setup organizational units that ensure the projects are aligned with strategic goals and fall into their respective place with respect to operations, programs, and portfolios.

These units are often called Project Management Office (PMO) and depending on how mature their organizations are in project management and/or the preferred level of control over projects the PMO can assume one of the following three roles:


  • Supportive: The PMO office plays and advisory role and doesn’t control the organization’s projects. It assists projects by providing them with templates, access to previous projects archive, white papers, etc.  The degree of control over projects is low.
  • Controlling: In addition to supporting the projects with standards and resources, the PMO office controls projects by mandating project management methodologies and product life cycles, adherence to specific standards, etc. The PMO maintains a high-level control over projects but does not govern their day to day operations.  The degree of control over projects is moderate.
  • Directive: At this level projects are managed directly by the PMO office. The degree of control over projects is high.

As mentioned in the Introduction chapter, PMI®[6] has a number of foundational standards specifically designed to address management of projects within the broader organizational context.

[1] Project Management Institute, The Standard for Program Management, Third Edition, Project Management Institute, Inc., 2013, Table 1-1, Page 8

[2] Project Management Institute, A Guide to Project Management Body of Knowledge (PMBOK Guide) –Fifth Edition, Project Management Institute, Inc., 2013, Page 26

[3] PMBOK is a registered trademark of the Project Management Institute, Inc.

[4] As mentioned previously, PMBOK Guide serves as a platform for the Project Management Institute’s foundational standards such as Program Management, Portfolio Management, and Organizational Maturity Model (OPM3).

[5] The Theory Of Constraints (TOC) the invention of the late management guru Dr. Eliyahu (Eli) Goldratt is an EXCELLENT source for studying the local optima vs. strategic level operations.

[6] PMI is a registered trademark of the Project Management Institute, Inc.

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