Enterprise Environmental Factors Archives - Project Management Knowledge Hub

What are Enterprise Environmental Factors?

Enterprise Environmental Factors are used as inputs to project activities same as Organizational Process Assets. These factors are not under the control of the project team, in spite of being influential towards project direction. This influential factor may negatively or positively impact towards the project success, hence it’s project team’s responsibility to use them under all the project processes to ensure that project is guided and followed under the respective factors accordingly.

PMBOK 5th edition has stated different factors that are used in project activities. Few of them are as follows;

Culture, structure and the governing rules of the performing organization
External factors such as political and marketing conditions
Geographical situation, resources and available facilities
Industry / government standards and policies
Available human resources (skills, knowledge level, etc…)
Company working structure (authorization structure)
Stakeholder engagement (risk tolerance, culture and other behavioral patterns)
Available communication channels and management methodologies
Information databases (commercial, risk related, baselines, etc…)
Personnel authority and administration (staffing plans, employee retention methods, performance appraisals and reviews)
Project Management Information System (an automated tool to collect and share information related to projects)

Organizational Structure on Project Management

Organizational Structure influencing on Project Management

Organizational Structure is a key element that can have a straight / direct impact towards the success of projects. The structure differs from organization to organization and based on the structure, the project management methodology also differs. PMI has identified the organizational structure as an enterprise environment factor that can affect on how the projects need to be conducted. Therefore, according to different organizations, few structures have been identified and categorized under three structural level. They are;

Functional
Matrix (Weak, Balanced and Strong)
Projectized

Functional Organization

These organizations function under different functional level leads such as marketing, finance, human resource, operations, etc… Each department will work on their project tasks independently from other units / departments.

Matrix Organization

These organizational structures reflect a combination of both functional and projectized environments. It has been classified under three different level which are weak, balanced and strong matrix structures based on the authority, power and influence level between the functional and project managers.

Weak Matrix Organization

This structure follows most of the characteristics of a functional structure. Also the level of a project manager is at a coordinator / expediter level which is very low and cannot make decisions.

Balanced Matrix Organization

This structure recognizes the need of a project manager, yet it doesn’t provide the full authority to the respective project manager.

Strong Matrix Organization

This structure has most of the projectized environmental features and have full-time project managers with more authority level.

Projectized Organization

This acts as the complete opposite of the functional structure where the organization functions under project managers who have a great deal of authority and most of the resources are involved in projects’ activities.

Refer below comparison among the identified structures which are compared under three factors namely;

The role of the Project Manager
The authority level of the Project Manager
Resources Availability