Organizing for Uncertainties in a Dynamic Market - Assignment Example

? Organizing for uncertainties in a dynamic market affiliation Organizing for uncertainties in a dynamic market Part I Project portfolios in dynamic environments: Organizing for uncertainty By Yvan, P. (2012). University of Montreal In the article the author put across the importance of a dynamic environment to a project. Dynamic environment refers to a type of an environment with a lot of potential in terms of business success. Dynamic environments refer to the type of business whereby there is a lot of opportunities to venture in or base projects in. According to Yvan (2012) the success of any business greatly relies on the type of environment it ventures into. The author further argues that dynamic environment provide the best opportunistic environment in the corporate world. However, dynamic environments need proper management since they are accompanied by many uncertainties. Many project portfolios fail due to dynamic environment. The article describes how dynamic environments can easily destroy a project portfolio. From the evidence provided in the article, one project out of five ventured in a dynamic environment have failed due to poor management. Coming up with project portfolios require a lot of consideration with the type environment a project location is based. The issue behind dynamic environment is the management of the uncertainties presented by this environment. In words by Yvan (2012) the richness in opportunities the dynamic environment presents are the same uncertainties resented by the same environment. Characteristics in a dynamic environment include high level of profits in one season while the fate of other financial years is unknown. This uncertainty makes it essential to have programs and strategies to manage their project portfolio. To curb this problem the article involves the use of dynamics capabilities frameworks. These frameworks are aimed at studying project portfolios in dynamic environments. Apart from studying the frameworks provides recommendations and lessons learnt from the study of project portfolios. From these frameworks organizations are able to generate efficient project portfolios to suit the dynamic environment. Additionally, organizations have the ability to manage the continuity of their projects in this environment. The dynamic capabilities frameworks are aimed to achieve three prospects: Provision of a better understanding on the management of projects facing uncertainties. Analyzing the relationship between the measures put in place by organizations to minimize the impact caused by uncertainties and the sources of uncertainty in dynamic environments. Provide recommendations and possible improvements in the standards and models of project portfolios. From the author of the article these three objectives can secure an organization’s assets in any case of an occurrence of an uncertainty. If the assets are not completely secured they effects of the uncertainties are also minimized. Project managers are therefore advised on how to ensure a proper implementation of the dynamic capabilities frameworks. In some cases these frameworks only involves means of insurance in any occurrence of risk. In the dynamic environment, the frameworks are more important since projects require total quality management. According to Yvan (2012) the completion of projects depends mainly on the ability of the project manager to foresee the transition from and to each face of the project. This is made easier by the implementation of the dynamic capabilities framework. From the article, there are claims that project management in dynamic environments. Organization and project doing enough to ensure that project portfolio are being managed effectively. This is after many approaches have been developed. Do project managers have the intent of making projects suitable for the dynamic environment? Having successful projects portfolio also includes having proper organizing mechanisms in the organization. Proper organization mechanisms include the methods of operation an organization uses in carrying out any project. From the article, there is the inclusion of how important efficient organization mechanisms should be. According to Yvan (2012) these mechanisms are used to streamline the operations of a project throughout its operations till its completion. In terms of uncertainty, this process and the mechanisms applied play a major role in minimizing the risks involved. If organizations have well managed organization mechanisms, the risk that a company may occur are significantly reduced. If the rate in which organization manages its operations is increased, the outcome in terms of prevention of uncertainties would be significant. These projects facing uncertainties should be monitored in way in which any developments or changes can be noted before occurrence of loses. The monitoring of data should be done by the project manager. Progress of the project mostly bases its findings on time allocated for completion of the project and the quality of the project. In many organizations, this process is outsourced so as to allow for transparent and accurate results. This is according to the article which claims that internal management of performance data can be easily manipulated or influenced. If there is proper management and collection of date, project facing the risk of uncertainties will be secured. In words by Yvan (2012) data collection is the most efficient and accurate measure for performance. From the article, there is a real picture of having projects in a dynamic environment. The article highlights major changes and scenarios that organization should apply in order to achieve top level efficiency in their projects. The author of the article has a great relation and understanding the dynamic environment and how to find possible solutions. The author shows their ability to come up with proper analysis of the dynamic environment. From the analysis the author provides the required information regarding the state of the uncertainties present in the dynamic market. The main recommendation from the author is that project managers should organize the operation of their projects to cope with potential uncertainties (Yvan, 2012). The article advocates for forecasting and assumptions as the best way to get through a dynamic environment. Yvan (2012) argues that forecasting can be used to position an organization in the required position for prosperity. However, there are limitations of this methodology which are more severe than any other uncertainty. The author argues that if a project portfolio is to be based on forecast and assumptions, the management of the operations should be outstanding. He further argues that forecasting is more suitable if it can be related to prior success. On the other hand, assumptions should be made through experience. Additionally, before coming up with assumptions, project managers should conduct a thorough market research on the logic of the assumptions made. The author also provides other methodologies which revolve around management and organization structure which may be used to prepare for uncertainties. The most important factor in project management according to the author is an effective human resource team. This team is referred as the implementing team which has on its mandate the duty to carry out instructions and strategies. A good relation with the human resource translates to an effective project management strategies. Part II Organizing for uncertainties in a dynamic market Introduction The modern corporate environment has been described as a dynamic environment. The unpredictable occurrences in the environment have made it difficult to completely insure companies from risks and uncertainties. The situation has been made even more difficult by the increase of competition levels. Every organization is thriving to get a comfortable competitive advantage. For this reason they venture into unknown business places to increase the width of their operations. With many operation ventures organizations are easily exposed to uncertainties which make it difficult of them to manage. In a dynamic environment, strategies to govern uncertainties greatly depend on the ability of managers’ prowess. With experienced and efficient mangers, project undertaken in dynamic market can prosper till their completion. According to Porter (2004) proper project management greatly depends on the project manager an organization employs. Project portfolios in dynamic environments are referred to as agents to weaken risk mitigation strategies. However, the scenarios can be turned around to produce successful project portfolios. The dynamic environments are characterized by great changes and turbulence which makes it difficult for organization to gain stability. In an argument by Johnson et.al (2008) organization venturing into dynamic environments for their first project are likely to fail before the first quarter of the financial year. This is mostly influenced by the turbulence nature of the dynamic environment. This paper will focus on how to manage project portfolios in the dynamic environment. Additionally, it will provide recommendations on how to successfully mange project portfolios in this type of environment. For provision of evidence, the paper will provide results and findings from researched sources. Generally, the paper will provide a general outlook on how to manage an organization for uncertainties. Literature review From the literature featured in this paper there is a general opinion that uncertainties are generated from poor management. According to the Strategic Direction (2007), poor management causes a situation in which an organization does have control in the operations in a country. The same sentiments are shared by Porter (2004) who argues that sub-standard managing systems are responsible for the uncertainties organizations face threat from. In organizing for uncertainties organizations should employ the use of experienced managers to foresee projects till completion. In dealing with uncertainties, competency, accuracy and proper operation management is the key to success (Slack & Parent, 2005). The author further claims that this only achievable if there is proper planning of operation before any project kicks off. The sources used in the paper also share the advice that all organizations should use the dynamic capabilities frameworks. From the frameworks there is always the urgency of dealing with the uncertainties presented by the dynamic environment. According to Grant (2005) the role of the dynamic capabilities frameworks is very significant especially to new organizations. The framework not only safeguards the assets in the organization but also builds the confidence of an organization to venture into more profitable projects. In an argument by Griffin (2010), the framework and other safeguarding strategies are the key to a successful project. With insured operations, projects are well managed and well operational. From all the reviewed there is the assumption that the external environment in the corporate world can be referred to as a dynamic environment. All factors in the external environment can be used for or against the success of a project portfolio. The example used by Griffin (2010) is the legal factors. If an organization adheres to the rule and regulations from the government, it is likely that it will have a comfortable venture in an environment. It would be even worse if an organization fails to respect the rule of law (Landstrom, 2010). The dynamic environment is the best market for an organization to venture in. For project portfolios, the dynamic environment is provides the best way to capture success. From the literature reviews, one can base an argument that proper management in the dynamic environment can transform the uncertainties to profit chances. As much as the dynamic environment faces opposition, organizations are responsible for the failures in this type of the environment (Slack & Parent, 2005). However, the uncertainties in the dynamic market are more severe and unpredictable it should be the duty of an organization to manage their operation s in consideration of uncertainties. Methodology Dynamic environment methodologies vary due to location and the type of operation san organization undertakes. When coming up with methodologies in the dynamic environment, performance is the determinant. The success of project portfolios in a dynamic environment helps generate the methodology used to research on the particular project. According to Cleden (2009) generating methodologies to measure the performance of project portfolios cannot be generalized until their completion. However, the management of the project portfolios can also be used to measure the success or failure of a project. Additionally, in running project portfolios organizing for uncertainties is also a significant determinant. Other determinants are the human resource employed, the financial management of that particular project and the adherence to the time allowance set aside for the project. If a project portfolio is successful its operations can be used as an example to foresee the operation of other projects. If a project has a good human resource force to carry out its operations it has a high chance to succeed. According to William (2003), the human resource force involved in the project is the greatest determinant of success. Apart from a good human resource, the welfare of the staff involved in a project should be very well considered. This is viewed as a move to manage the uncertainties which may be posed by the human resource. Many methodologies have been generated on how efficiently manage human resources. In an argument by Grant (2005) having issues with the human resource is the worst issue that may face an organization in the dynamic market. In managing organizations for uncertainties financial management is very crucial. A good project portfolio also requires an outstanding financial management. This ensures a smooth continuity of all faces of the project. Many organizations fail on many projects due to poor financial management. For new companies in a dynamic environment, poor financial management can easily lead to the extinction of the company (Strategic direction, 2007). Uncertainties posed by poor financial management affect more of a company than just one project portfolio. A good financial management program for a dynamic environment should be elastic so as to incorporate the minimal adjustments throughout the project. It is important in project management to allocate room for adjustment. Adjustment not included in the project’s financial budget can easily lead to failure of a project. The energetic and always evolving dynamic environment provides a lot of ideas during the course of the project. To remain significant in this market, the changes should be made. It is for this reason that methodologies generated for financial planning advocate for elasticity in the financial management. In many methodologies, the issue of finance and continuity of a project are outsourced. Outsourcing makes it easier to analyze the performance of the incorporated company. Additionally, outsourcing enables the sharing of risks caused by the threats by the uncertainties in the environment. According to Johnson, et.al (2008) outsourcing in project portfolios is the best thing an organization can venture in. the author argues that outsourcing provides more than security but also expertise. However, organizations are advised to be very demanding and careful when selecting firms to outsource operations from. Porter (2004) says that organizations should enter into partnerships with firms under the basis of merit and experience. In curbing uncertainties in the dynamic environment, organizations should be able to come with accurate environmental analysis and accurate forecasting. If the two aspects are achieved the probability of an organization being affected by an uncertainty will be reduced significantly. From forecasting and environmental analysis, several assumptions are employed: Predictions and assumptions are virtually likely to be inadequate or ambiguous if they do not cover widely across likely future developments in areas such as values and lifestyles, economics, demography, law and regulation, technology and institutional change. The most likely futures are defined mostly by human judgment, imagination and creativity. The objective behind the definition of alternative futures is to determine how to create an improved future that would materialize if we maintain and essentially kept doing what is being done currently. In the methodology of forecasting and assumptions, results from related ventures are highly valued. In an argument by Slack & Parent (2005) forecasting is widely connected to human activity. However, errors incurred during forecasting and assumptions can cost an organizations can cost an organization a lot more than just project portfolios. Landstrom (2010) an organization that has no experience in a dynamic environment should by all means avoid forecasting outcomes of the market. The author argues that companies with vast experience both in the market and in forecasting as the best placed to forecast future events. In forecasting and assumptions organizations should however not completely on the occurrence of the forecasted events. In words by Cleden (2009) there is an equal probability that the forecasted events won’t occur or will occur. In the modern century many projects portfolios use forecasting since it is the best method to formulate strategies and organizing for uncertainties. However, this methodology is not used by many organizations since they the risks involved are known and direct. Many project managers avoid using assumptions and forecasting. According to Robbins (2008) a project portfolio based on forecasting and assumptions depends on one probability which is occurrence of the forecasted event. With the modern corporate environment this risk may have fatal consequences to an organization. In regard to the topic, forecasting is a good management move to safeguard a company from uncertainties but if the assumptions are accurate or close to accurate. From obtained results, many organizations with projects in a dynamic environment prefer forecasting in regards from other completed projects. From the findings, majority of organization which used forecasting had used the methodology before. From prior using of the methodology they had achieved success from the forecasting. Forecasting methodology also varies from the type of organization. For example, educational institutions are best situated to use forecasting because they can base this methodology from their success. In these organizations, the success of the company greatly depends on the success of the organization in previous projects. This makes forecasting easier and realistic. According to Griffin (2010) organizations which greatly relies on their success, have easier ways for managing for uncertainties. The scenario is different on other organizations which do not depend on the profit of other project portfolios for their success. These companies depend greatly on the above assumptions and forecasting. From the above methodologies there is a conclusion that dynamic environments have greater risks as compared to other business environments. However, with proper management dynamic environments do not pose much threat on project portfolios. Yvan (2012) claims that the proper way of dealing with threats in a dynamic environment is by managing organizations for uncertainties. This way, organizations cannot be caught off guard any case of occurrence o any risk. Efficient project management can be successful regardless the environment a project portfolio is ventured. Findings, results and discussions There has been mixed results from different methodologies applied to solve the issue posed by the dynamic environments. It has been researched that many organization feel more secure when venturing into the dynamic environment. This is because of the energetic nature of this environment. In other findings, new and young companies avoid the dynamic environment before they have completely settled in a new environment. In an argument by Yang (2012) the comfort of the dynamic market depends on the comfort of an organization operating in the environment. The author argues that the confidence displayed by an organization should be in line with their strategies they use. Organizations with vast experience and outstanding strategies have the confidence to venture into any market regardless of their natural occurrence. In project portfolios, the environment matters depending on the strategies behind the project. Organizing for uncertainties is regarded the best strategies in ensuring continuity and completion of a project. The advantage of this strategy is the fact that the future of the project is known. Having a known future helps in planning and coming up with alternative options in case of uncertainties. In dealing with uncertainties in the dynamic market Hokinson (2008) suggests that setting priorities for sensitive events is important. With set priorities project managers are well informed on what issue to tackle first or sensitize. In words by William (2003) sensitizing important issues in project portfolios may be simplest of ways to organize for uncertainties. It is also important for organization to take advantage of the energetic nature of the dynamic environment to create profitable opportunities. There are few environments in the corporate world with the profitable capabilities of the dynamic environment. It is for this reason that organizations are advised to venture into this market but with proper management systems. With a proper staff, experienced project managers, competent department heads and well organized systems, there is high likely hood of a project portfolio to reach full potential in a dynamic environment (Grant, 2005). References Cleden, D. (2009). Managing project uncertainty. London: Gower Publishing. Grant, R. (2005) Contemporary Strategy Analysis (5th edition) Oxford: Blackwell Griffin, R. (2010). Management, London: Cengage Learning. Hokinson, R. (2008). Competing for advantage. London: Cengage Learning. Johnson, G., Scholes, K., and Whittington, R (2008). Exploring Corporate Strategy: Case and Text, (8th edition). Harlow: Prentice Hall Landstrom, H. (2010). Historical foundation of entrepreneurial research. Cheltenham: Edward Edgar publishing. Porter, M., (2004) Competitive Strategy Techniques for Analyzing Industries and Competitors, New York: Free Press Robbins, S. (2008). Organizational behavior: global and South African perspectives. Johannesburg: Pearson South Africa. Slack, T. & Parent, M. (2005). Understanding sport organizations. Illinois: Human kinetics. Strategic Direction (2007). An interview with Zahirul Hoque: Interview by Sarah Powell Vol. 23 Iss: 6. Pp.25-28. New York: Emerald Group publishing Limited William, G. (2003). Business research methods. London: Thompson. Yang, L. (2012). Implementation of project strategy to improve new product development performance. Montreal: University of Montreal. Yvan, P. (2012). Project portfolios in dynamic environments: Organizing for uncertainty. Montreal: University of Montreal. Read More