Anyone who has studied for the PMP^® exam will remember Enterprise Environmental Factors. In the sixth edition of the Guide to the Project Management Body of knowledge (PMBOK^® Guide), Enterprise Environmental Factors feature as inputs to or outputs from 43 of the various project management processes. If you have yet to obtain PMP^® certification, it is worthwhile getting an intuitive understanding of what these are.

On this page:

• Understanding Enterprise Environmental Factors
• The Impact of Corporate Culture
• Challenges of Geographical Distribution
• Political Climate and Market Influences
• Conclusion

Understanding Enterprise Environmental Factors

The PMBOK^® Guide offers a long list of factors and there is a temptation among students to learn these off. While this might work for a CAPM^® (Certified Associate in Project Management) student, the PMP^® exam wants to apply your knowledge in realistic situations, so understanding is more important than raw knowledge. In essence, Enterprise Environment Factors make up the environment your project functions in. So we need to consider the company we work for – its culture and structure – and the market we are aiming for – its regulatory environment and the needs and wants of its customer base.

The Impact of Corporate Culture

The first consideration is the corporate culture you work in. In Edgar Schein’s book, “The Corporate Culture Survival Guide”, he points out that there are three levels to culture in an organization: (1) the visible organizational structures and processes, what he calls “the artefacts”. These include the dress code, level of formality between bosses and subordinates and working hours. (2) The “espoused values”. These are seen in the company’s vision and mission statements, as well as other corporate literature. The interesting thing about these is that they often contradict the artefacts visible on the ground. Finally (3) there are the “basic underlying assumptions”. These make up the corporation’s personality. They are perfect examples of tacit knowledge – if the way the founders did things proved successful, unconsciously these ways become ingrained in the culture. For an outsider, these are difficult to grasp, because the company is not aware that these are part of its culture.

The important thing to note with culture is that it is very difficult to change. Many project managers who have embraced agile methods (or adaptive life cycles as PMP^® students will know them) have failed to implement them because of the command and control culture embedded in the company.

Challenges of Geographical Distribution

Geographical distribution is another corporation-related Enterprise Environmental Factor that will influence how you manage your projects. A small, self-contained company means that all available resources are in-house. However, in large conglomerates, there can be facilities across the globe and distributed projects are very common. While PMP^® students meet virtual teams on the way to the PMP^® exam, coordinating the work of people in many locations is exceptionally difficult. The problems all relate to distance. The most obvious distance is geographic. Studies have shown that someone is more likely to walk over to a colleague on the same floor of a building than to climb the stairs to visit someone on a different floor. So it is not surprising that communication with a remote facility is often unsatisfactory. Time distance is another factor. In theory, a project made up of teams based around the world can “follow the sun” and work 24 hours a day. However, what often happens in these situations is that a problem arises at one site that needs help from the previous site in the chain, meaning that the project is delayed until that team comes back on line. If the problems can be fixed by an exchange of e-mail great, but if there needs to be a conference call the level of overlap between sites becomes a factor. Generally what happens is that certain sites end up working a lot of unsociable hours. Finally, cultural distance contributes to endless misunderstandings; some are humorous but others can undermine relationships completely.

Within the company too, project managers have to be aware of the tools available to support the project. What are the Project Management Information Systems like? Do they exist? What sorts of communications strategies are used? Are tools like Skype and Twitter used to help distributed projects?

Political Climate and Market Influences

Of course, the big concern for any project manager is what the political climate is. Is there a “blamestorming” culture, where the project manager gets the blame if anything goes wrong? Or is it more supportive? Similarly, what is the risk appetite among the decision makers? Any risky decisions you make as a project manager can be career limiting if they fail. Make sure that you get approval before doing anything that would take the company out of its comfort zone.

But Enterprise Environment Factors are not confined to within the corporation. We need to be aware of what the marketplace is like. Is it highly regulated? Is it fashion-conscious? Is the competition fierce? Highly regulated industries tend to be conservative and will tend to be risk averse. However, if there is strong competition or a fashionable dimension to your products, then lateral thinking and revolutionary ideas will be welcomed and encouraged.

From the PMP^® exam perspective, ask yourself: does the company or the marketplace influence this process? If they do, then it is likely that Enterprise Environmental Factors will be an input. Take as an example: Develop Project Charter. The sort of project you can take on depends on available resources, so the enterprise will influence what we can do.

Interestingly, Enterprise Environmental Factors Updates – the outputs from processes – only appear three times: in the Acquire Resources, Develop and Manage Team processes. Again, this makes sense because we are developing the skill set available to the organization.

Conclusion

If you would like to learn more about Enterprise Environmental Factors and other project management concepts, please visit our training page. We run our project management courses online in our virtual classroom making training more convenient for you. To get more details, please contact us directly.