Wednesday, June 28, 2006

Integration of Organization Strategy with Projects

Integration of Organization Strategy with Projects
Nowadays, increasing continually of competitors and new demand of the new market, business has been forced to downsize and decentralize operations. Linking all projects to the strategic direction of the organization is crucial to success. Every project should contribute to the organization’s strategic plan, which is designed to meet the future needs of its customers.
The strategic management process is the process of assessing “what we are” and deciding and implementing “What we intend to be and how we are going to get there.” Strategy describes how an organization intends to compete with the resources available in the existing and perceived future environment, including four activities:

1: Reviewing and defining the organization mission


2:Setting organization objectives


3:Analyzing and formulating strategy


4:Implementing strategy

The components of strategic management are closely linked, and all are directed toward the future success of the organization. Strategic management requires strong links among mission, goals, objectives, strategy and implementation.
For example: I have one fruit farm, our main products are: longan and mango. Our capacity, we have around 100 ton (longan) and 45 ton (mango) per year. The problem is the price of longan and mangos decrease so many sines 2003. Now, our farm lost profit and we need to change the situation. We couldn’t improve the price, because the price was designed by the market. Our missions are: improve profit and competition.
We looking some plans to improve our profits, such as: change to grow new plant, combine another business, change the farm’s structure; reduce number of worker to reduce the cost, or sale our farm to do new business, etc.
With the first plan: How is this plan feasibility? How to change our product? How long for investment? NPV, IRR? Etc.
Other plans also like that.
We can apply Project screening Matrix to select one plan that convenient with our current situation.
With this example, we know that: how to distinguish our farm goals, missions, objectives and strategies. Different plan will have different contribution with our farm strategy, how to link that project with our strategy and its influence with our goals.