Project Management: A Managerial Approach 4/e By Jack R. Meredith and

Project Management: A Managerial Approach 4/e By Jack R. Meredith and Samuel J. Mantel, Jr. Published by John Wiley & Sons, Inc. Presentation prepared by RTBM WebGroup

Project Management A Managerial Approach Chapter 4 Project Organization

Growth of Project Oriented Organizations There are many reasons for the rapid growth, but most of them can be grouped in four general areas: Speed and market responsiveness have become absolute requirements for successful competition The development of new products, processes, or services regularly requires input from diverse areas of specialized knowledge Chapter 4-1

Growth of Project Oriented Organizations Four reasons for growth (cont.) Rapid expansion of technological possibilities in almost every area of enterprise tends to destabilize the structure of organizations A majority of senior managers rarely feel much confidence in their understanding and control of the activities in their areas Chapter 4-2

Types of Project Organizations There are two fundamentally different ways of organizing projects within the parent organization The project as part of the Functional Organization The project as a free-standing part of the parent organization A third type, called a Matrix Organization is a hybrid of the two main types Each has advantages and disadvantages Chapter 4-3

The Project as Part of the Functional Organization Advantages of using the functional elements of the parent organization as the administrative home for a project include: Maximum flexibility in the use of staff Individual experts can be utilized by many different projects Specialists in the division can be grouped to share knowledge and experience The functional division also serves as a base of technological continuity when individuals choose to leave the project The functional division contains the normal path of advancement for individuals whose expertise is in the functional area Chapter 4-4

The Project as Part of the Functional Organization There are also disadvantages to housing the project in a functional area: The client is not the focus of activity and concern The functional division tends to be oriented toward the activities particular to its function Occasionally, no individual is given full responsibility for the project There are often several layers of management between the project and the client There is a tendency to suboptimize the project Chapter 4-5

Pure Project Organization Advantages of a pure project organization: The project manager has full line authority over the project All members of the project work force are directly responsible to the project manager When the project is removed from the functional division, the lines of communication are shortened When there are several successive projects of a similar kind, the pure project organization can maintain a permanent cadre of experts who develop skills in specific technologies Chapter 4-6

Pure Project Organization Advantages of a pure project organization (cont.) A project team that has a strong and separate identity and develops a high level of commitment from its members Because the authority is centralized, the ability to make a swift decision is enhanced Unity of command exists Pure project organizations are structurally simple and flexible, which makes them relatively easy to understand and implement The organizational structure tends to support a holistic approach to the project Chapter 4-7

Pure Project Organization Disadvantages of a pure project organization: Each project tends to be fully staffed which can lead to a duplication of effort in every area from clerical staff to technological support There is a need to ensure access to technological knowledge and skills that results in an attempt by project managers to stockpile equipment and technical assistance The functional division is a repository of technical lore, but it is not readily accessible to team members of the pure project team Chapter 4-8

Pure Project Organization Disadvantages of a pure project organization (cont.) Pure project groups seem to foster inconsistency in the way in which policies and procedures are carried out In a pure project organization, the project takes on a life of its own There tends to be concern among team members about “life after the project ends” Chapter 4-9

The Matrix Organization The matrix organization is a combination of functional and pure project A matrix organization can take on a wide variety of specific forms “Project” or “strong” matrix organization most resembles the pure project organization The “coordination” or “functional” or “weak” matrix most resembles the functional form The “balanced” matrix lies in between the others Chapter 4-10

The Matrix Organization Rather than being a stand alone organization, like the pure project, the matrix project is not separated from the parent organization: Chapter 4-11

The Matrix Organization As with other organizational forms, the matrix organization has its own unique advantages: The project is the point of emphasis Because the project is overlaid on the functional divisions, the project has reasonable access to the reservoir of technology in all areas There is less anxiety about what happens when the project is completed Chapter 4-12

The Matrix Organization Advantages of a Matrix (cont.) Response to client’s needs is as rapid as in the pure project organization Matrix management gives the project access to representatives from the administrative units of the parent firm The matrix organization allows a better company-wide balance of resources to achieve goals There is a great deal of flexibility in precisely how the project is organized within the matrix Chapter 4-13

The Matrix Organization There are also disadvantages to using the matrix organization; most involve conflict between the functional and project managers: The balance of power between the project and functional areas is very delicate The movement of resources from project to project may foster political infighting Problems associated with shutting down projects can be as severe as in a pure project organization Chapter 4-14

The Matrix Organization Disadvantages of a Matrix (cont.) The division of authority and responsibility in a matrix organization is complex, and uncomfortable for the project manager. Matrix management violates the management principle of unity of command. Project workers have at least two bosses, their functional heads and the project manager. Chapter 4-15

Mixed Organizational Systems Divisionalization is a means of dividing a large organization into smaller more flexible units This enables the parent organization to capture some of the advantages of small, specialized organizational units while retaining some of the advantages that come with larger size units Chapter 4-16

Mixed Organizational Systems Pure functional and pure project organizations may coexist in a firm Chapter 4-17

Mixed Organizational Systems Advantages of a mixed organization: The hybridization of the mixed form leads to flexibility The firm is able to meet special problems by appropriate adaptation of its organizational structure Disadvantages include: Dissimilar groupings within the same accountability center tend to encourage overlap, duplication, and friction because of incompatibility of interests Conditions still exist that result in conflict between functional and project managers Chapter 4-18

Choosing an Organizational Form Selecting the organizational interface between the project and the firm is a difficult task The choice is determined by the situation, but is also partly intuitive Must consider the nature of the potential project, the characteristics of the various organization options, the advantages and disadvantages of each, the cultural preferences of the parent organization, and then make the best compromise that can be made Chapter 4-19

Choosing an Organizational Form Criteria for the selection of a project organization: 1. Define the project with a statement of the objective(s) that identifies the major outcomes desired 2. Determine the key tasks associated with each objective and locate the units in the parent organization that serve as functional “homes” for these types of tasks 3. Arrange the key tasks by sequence and decompose them into work packages Chapter 4-20

Choosing an Organizational Form Criteria for the selection of a project organization (cont.): 4. Determine which organizational units are required to carry out the work packages and which units will work particularly closely with which others 5. List any special characteristics or assumptions associated with the project 6. In light of items 1-5, and with full cognizance of the pros and cons associated with each structural form, choose a structure Chapter 4-21

The Project Team To staff a project, the project manager works from a forecast of personnel needs over the life cycle of the project A work breakdown structure (WBS) is prepared to determine the exact nature of the tasks required to complete the project Skills requirements for these tasks are assessed and like skills are aggregated to determine work force needs From this base, the functional departments are contacted to locate individuals who can meet these needs Certain tasks may be subcontracted Chapter 4-22

The Project Team There are some people who are more critical to the project’s success than others and should report directly to the project manager or the project manager’s deputy: Senior project team members who will be having a long-term relationship with the project Those with whom the project manager requires continuous or close communication Those with rare skills necessary to project success Chapter 4-23

Human Factors and the Project Team Meeting schedule and cost goals, without compromising performance is a technical problem, with a human dimension Project professionals tend to be perfectionists Pride in workmanship leads the team member to improve (and thus change) the product These changes cause delays in the project Chapter 4-24

Human Factors and the Project Team Motivating Project Team Members: The project manager often has little control over the economic rewards and promotions of project team members, but this does not mean he/she cannot motivate members of the team How are technical employees motivated? Recognition Achievement The work itself Responsibility Advancement Chapter 4-25 The chance to learn new skills

Human Factors and the Project Team Empowerment of project teams is also a motivational factor: 1. It harnesses the ability of the team members to manipulate tasks so that project objectives are met. The team is encouraged to find better ways of doing things 2. Professionals do not like being micromanaged. Participative management does not tell them how to work but given a goal, allows them to design their own methods 3. The team members know they are responsible and accountable for achieving the Chapter 4-26 project deliverables

Human Factors and the Project Team Advantages of Empowerment (cont.): 4. There is a good chance that synergistic solutions will result from team interaction 5. Team members get timely feedback on their performance 6. The project manager is provided a tool for evaluating the team’s performance Chapter 4-27

Interpersonal Conflict The focus of conflict can often be related to the stage in the project’s life cycle When the project is first organized, priorities, procedures and schedules all have roughly equal potential to cause conflict During the buildup phase, priorities become significantly more important than any other conflict factor In the main program phase schedules are the most important cause of conflict followed by technical disagreements At the project finish, meeting the schedule is the critical issue Chapter 4-28

Interpersonal Conflict Conflict and the Project Manager Most of the conflict on project teams is the result of individuals focusing on the project through the eyes of their individual discipline or department Conflict avoiders do not make successful project managers On occasion, compromise appears to be helpful, but most often, gently confronting and resolving the conflict is the method of choice, for a win-win situation Chapter 4-29

Summary There are various organizational structures that can be used for projects including: Projects within functional organizations, pure project, matrix, and mixed organizational structures Selecting the appropriate project organizational form is critical to the success of the project Chapter 4-30

Summary A useful procedure for selecting an organizational form is: Identify the specific outcomes desired Determine the key tasks to attain these outcomes Sequence the key tasks Determine which project subsystems will be assigned which steps and which subsystems must closely cooperate Identify any firm or project characteristics Consider all pros and cons, then make a decision Chapter 4-31

Summary Perfectionism, motivation, and conflict are often the major behavioral problems facing the project manager Sources of project conflict are often priorities and policies at first, schedule and technical problems during the main phase, and schedule and personal issues near termination Chapter 4-32

Project Organization Questions? Chapter 4-33

Project Organization Picture Files

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Project Organization Table Files

Project Organization

Project Organization