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
 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
 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
 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
 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
 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
 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
 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
 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”
 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
 The Matrix Organization
• Rather than being a stand alone organization, like the
pure project, the matrix project is not separated
from the parent organization:
 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
 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
 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
 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.
 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
 Mixed Organizational Systems
• Pure functional and pure project organizations
may coexist in a firm
 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
 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
 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
 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
 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
 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
 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
 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
• 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 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
 Interpersonal Conflict
• The focus of conflict can often be related to the stage in
the project’s life cycle
1. When the project is first organized, priorities, procedures and
schedules all have roughly equal potential to cause conflict
2. During the buildup phase, priorities become significantly more
important than any other conflict factor
3. In the main program phase schedules are the most important
cause of conflict followed by technical disagreements
4. At the project finish, meeting the schedule is the critical issue
 Interpersonal Conflict
• Conflict and the Project Manager
1. 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
2. Conflict avoiders do not make successful project managers
3. 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