7/11/22

LMA8X05 – LOGISTICS PROJECT MANAGEMENT

18 July 2022

Projects in Contemporary Organizations

Introduction
• Rapid growth in project management
• In the past, most projects were external
• Building a new skyscraper
• New ad campaign
• Launching a rocket
• Growth lately is in internal projects
• Developing a new product
• Opening a new branch
• Improving the services provided

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Project - definition
• A project is “a temporary endeavor undertaken to create a unique product, service, or result”
(PMBOK® Guide, 6th Edition, 2017, p. 4)
• Operations is work done to sustain the business
• Projects end when their objectives have been reached or the project has been terminated
• Projects can be large or small and take a short or long time to complete

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Attributes of a project
A project:
• Has a unique purpose
• Is temporary
• Is developed using progressive elaboration
• Requires resources, often from various areas
• Should have a primary customer or sponsor
• The project sponsor usually provides the direction and funding for the project
• Involves uncertainty

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Triple Constraint

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Project management - definition

• Project management is “the application of knowledge, skills, tools and techniques to project
activities to meet project requirements” (PMBOK® Guide, 6th Edition, 2017, p. 10)

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Advantages of project management

• Meet business objectives
• Satisfy stakeholder expectations
• More predictable
• Increase chances of success
• Deliver the right products/services at the right time
• Resolve issues and problems
• Respond to risks in a timely manner
• Optimise the use of organisational resources
• Identify, recover or terminate failing projects
• Manage constraints
• Manage change

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Disadvantages of project management

• Greater organisational complexity
• More violations of company policy
• Lower personnel utilization
• More managerial conflicts

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Project management standards and methodologies

1 PMBoK® Guide
2 ISO 21500
A Guide to the Project Management Body of Knowledge Provides guidance for project management and can be used
(PMBOK® Guide) is a widely used standard. This standard is by any type of organisation and for any type of project,
published by the PMI and in essence consists of 10
regardless of complexity, size, or duration. The ISO standard
knowledge areas.
resembles the PMBOK® Guide but without the tools and
techniques section.

3 PRINCE2
4 APM Body of Knowledge
PRINCE2® is a process-oriented project management The APMBOK consists of 52 knowledge areas, which are
methodology and consists of four integrated elements. These divided into the following 7 main sections.
elements are principles, themes, processes, and the project
environment itself.

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PMBoK® Guide Knowledge Areas

Project Integration Project Scope Project Schedule Project Cost Project Quality
Management Management Management Management Management

Identification, definition, T he processes that are required T he processes required to T he planning, estim ating, F ocuses on the quality of the
assim ilation, & coordination of the to ensure that all the w ork that is co m p le te th e p ro je ct in a tim e ly budgeting, financing, funding, product or service that w ill be
va rio u s p ro ce sse s a n d a ctivitie s re q u ire d to su cce ssfu lly d e live r a m anner & consists of seven m anaging, and controlling of the delivered by the project. T he

that are needed w ithin the project project is included. T he focus of processes. T hese are planning project costs to com plete the focus is on the processes and
life cycle a s w e ll a s th e p ro ce ss this know ledge area is on w hat is the m anagem ent schedule, project w ithin the approved activities that determ ine quality
groups. T his know ledge area and w hat is not included in the defining the activities, sequencing budget. T his know ledge area policies, objectives, and
co n sists o f se ve n p ro ce sse s— project and consists of six the activities, estim ating co n sists o f fo u r p ro ce sse s— that re sp o n sib ilitie s in o rd e r fo r th e
that is, developing a project processes. T hese processes are re so u rce s a sso cia te d w ith th e is, co st m a n a g e m e n t p la n n in g , project to satisfy the needs for

ch a rte r, d e ve lo p in g a p ro je ct planning scope m anagem ent, activities, estim ating activity estim ating costs, determ ining the w hich is w as undertaken. T his
m anagem ent plan, directing and co lle ctin g re q u ire m e n ts, d e fin in g durations, developing a schedule budget based on the costs, and kn o w le d g e a re a co n sists o f th re e
m anaging project w ork, the project’s scope, creating a & co n tro llin g th e sch e d u le . co n tro llin g th e a ctu a l co sts. processes— that is, planning
m onitoring and controlling project W B S , validating the scope, and quality m anagem ent, m anaging
w ork, perform ing integrated co n tro llin g th e sco p e . quality, and controlling quality.

ch a n g e co n tro l, m a n a g in g p ro je ct
kn o w le d g e , a n d th e clo sin g o f

either the project or a phase.

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PMBoK® Guide Knowledge Areas

Project Resource Project Project Risk Project Procurement Project Stakeholder

Management Communications Management Management Management
Management

F ocuses solely on organising, E n su re s th a t p ro je ct in fo rm a tio n F ocuses on increasing the F ocuses on the processes that Includes the processes that are
m anaging, and leading the is co m m u n ica te d to a ll th e te a m like lih o o d a n d im p a ct o f p o sitive are needed for the purchasing or re q u ire d to id e n tify p e o p le ,
project team . T he project team m em bers and stakeholders in a events, on the one hand, as w ell acquiring of products and/or parties, or organisations that can

are all the people that are tim ely and appropriate m anner. It as decreasing the likelihood and se rvice s th a t a re re q u ire d fro m have either a positive or negative
assigned to the individual tasks also deals w ith the collection, negative im pact of negative outside the norm al project team . in flu e n ce o n th e p ro je ct itse lf a n d
and activities as defined in the cre a tio n , d istrib u tio n , sto ra g e , events, on the other hand. T his T hese products and/or services the project deliverables. T his
P ro je ct S ch e d u le M a n a g e m e n t re trie va l, a n d m a n a g e m e n t o f kn o w le d g e a re a co n sists o f se ve n ca n b e so u rce d e ith e r in te rn a lly kn o w le d g e a re a co n sists o f fo u r
kn o w le d g e a re a . F ive p ro ce sse s project inform ation. T hree processes— that is, planning risk or externally to the organisation. processes. T he first tw o

co n stitu te th is kn o w le d g e a re a , processes form part of this m anagem ent, identifying risks, P ro je ct p ro cu re m e n t processes focus on identifying
in clu d in g p la n n in g fo r re so u rce kn o w le d g e a re a , sta rtin g w ith perform ing qualitative and m anagem ent consists of four the stakeholders, follow ed by
m anagem ent, acquiring planning com m unications quantitative risks, planning risk processes— that is, procurem ent planning stakeholder
re so u rce s, d e ve lo p in g th e te a m , m anagem ent, m anaging re sp o n se s, m o n ito rin g risks, a n d m anagem ent planning, engagem ent. T he rem aining tw o
m anaging the team , and co m m u n ica tio n s, a n d m o n ito rin g im p le m e n tin g risk re sp o n se s. co n d u ctin g p ro cu re m e n ts, processes focus on m anaging

co n tro llin g re so u rce s. co m m u n ica tio n s. co n tro llin g p ro cu re m e n ts, a n d and m onitoring stakeholder
clo sin g p ro cu re m e n ts. engagem ent.

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Project Life Cycle

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Project phases and the project life cycle

• A project life cycle is a collection of project phases that defines:
• What work will be performed in each phase
• What deliverables will be produced and when
• Who is involved in each phase
• How management will control and approve work produced in each phase

• A deliverable is a product or service produced or provided as part of a project

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More on project phases

• In early phases of a project life cycle:
• Resource needs are usually lowest
• The level of uncertainty (risk) is highest
• Project stakeholders have the greatest opportunity to influence the project

• In middle phases of a project life cycle:

• The certainty of completing a project improves
• More resources are needed

• The final phase of a project life cycle focuses on:

• Ensuring that project requirements were met
• The sponsor approves completion of the project

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Predictive project life cycle

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Product life cycles

• Products also have life cycles

• The Systems Development Life Cycle (SDLC) is a framework for describing the phases involved in
developing and maintaining information systems

• Systems development projects can follow

• Predictive life cycle: the scope of the project can be clearly articulated and the schedule and cost
can be predicted
• Adaptive Software Development (ASD) life cycle: requirements cannot be clearly expressed,
projects are mission driven and component based, using time-based cycles to meet target dates

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Distinguishing between project life cycles & product life cycles

• Project life cycle applies to all projects, regardless of the products being produced

• Product life cycle models vary considerably based on the nature of the product

• Project management is done in all of the product life cycle phases

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Relationship between project & product life cycles

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Project success

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Project success
• There are several ways to define project success:
• The project met scope, time, and cost goals
• The project satisfied the customer/sponsor
• The results of the project met its main objective, such as making or saving a certain amount of money,
providing a good return on investment, or simply making the sponsors happy

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Levels of project success

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Strategic management

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Poor project results

• Organizations spend $100 billion per year on creating competitive strategies
• 90% fail due to poor project execution

• Other poor results:

• < 50% strategically projects successful
• >25% lacked sponsor and detailed implementation process
• 40% had adequately skilled personnel
• Only 20% prioritized hiring skilled staff

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How to improve
• Projects, programmes, and project portfolios

• The best firms have:

• Top management involvement
• Get the most feedback
• Dedicate the most resources
• Have the most robust processes

• Implementation is the critical skill in strategic and competitive success

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Challenges in project management

• Meeting the strategic goals
• Linking the strategic elements with tactical elements
• Streamlining decision making
• Increase efficiencies
• Better align with organizational goals
• Coping with ambiguity and complexity
• Keeping up with technology
• Coordinating interdependent systems

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Governance structure

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The business case

• Presented to a funding entity
• Includes
• Monetary cost
• Benefits
• Nonmonetary factors
• Strategic justification
• Expected behavioral impacts
• Increases in efficiency
• Service improvements
• Etc.

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Project selection

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Methods for selecting projects

• There are usually more projects than available time and resources to implement them

• Methods for selecting projects include:

• Focusing on broad organisational needs
• Categorising projects
• Performing net present value or other financial analyses
• Using a weighted scoring model

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Non-numeric models
• Models that do not return a numeric value for a project to be compared with other projects

• These are really not “models” but rather justifications for projects

• Just because they are not true models does not make them all “bad”

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Non-numeric models
1. Sacred Cow: A project, often suggested by the top management, that has taken on a life of its
own

2. Operating Necessity: A project that is required in order to protect lives or property or to keep the
company in operation

3. Competitive Necessity: A project that is required in order to maintain the company’s position in
the marketplace

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Focusing on broad organisational needs

• It is often difficult to provide strong justification for many IT projects, but everyone agrees they have
a high value

• “It is better to measure gold roughly than to count pennies precisely”

• Three important criteria for projects:

• There is a need for the project
• There are funds available
• There’s a strong will to make the project succeed

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Categorising projects
• One categorisation is whether the project
addresses:
• A problem
• An opportunity, or
• A directive

• Another categorisation is how long it will take to

do and when it is needed

• Another is the overall priority of the project

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Financial analysis of projects

• Financial considerations are often an important consideration in selecting projects

• Three primary methods for determining the projected financial value of projects:
• Net present value (NPV) analysis
• Return on investment (ROI)
• Payback analysis

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Net Present Value

• Net present value (NPV) analysis is a method of calculating the expected net monetary gain or
loss from a project by discounting all expected future cash inflows and outflows to the present point
in time

• Projects with a positive NPV should be considered if financial value is a key criterion

• The higher the NPV, the better

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Net Present Value example

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Return on Investment (ROI)

• Return on investment (ROI) is calculated by subtracting the project costs from the benefits and then
dividing by the costs
• ROI = (total discounted benefits - total discounted costs) / discounted costs

• The higher the ROI, the better

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Payback analysis
• Another important financial consideration is payback analysis

• The payback period is the amount of time it will take to recoup, in the form of net cash inflows, the
total dollars invested in a project

• Payback occurs when the net cumulative discounted benefits equals the costs

• Many organisations want IT projects to have a fairly short payback period

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Weighted scoring model

• A weighted scoring model is a tool that provides a systematic process for selecting projects based
on many criteria
• Identify criteria important to the project selection process
• Assign weights (percentages) to each criterion so they add up to 100%
• Assign scores to each criterion for each project
• Multiply the scores by the weights and get the total weighted scores

• The higher the weighted score, the better

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Weighted scoring model

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Advantages and Disadvantages

Advantages Disadvantages
• Allow multiple criteria • Relative measure

• Structurally simple • Linear in form

• Direct reflection of managerial policy • Can have large number of criteria

• Easily altered • Unweighted models assume equal

importance
• Allow for more important factors

• Allow easy sensitivity analysis

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Select the best project

Project 1 Project 2
Year 1 R50 000 R75 000 R4 000 R5 000
Year 2 R120 000 R80 000 R6 500 R6 000
Year 3 R70 000 R85 000 R8 000 R7 000

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Risk considerations in project selection

• Both costs and benefits are uncertain
• Benefits are more uncertain

• There are many ways of dealing with risk

• Can make estimates about the probability of outcomes

• Subjective probabilities

• Uncertainty about:
• Timing
• What will be accomplished?
• Side effects

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Portfolio management

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Definition of a
portfolio

• A collection of projects and/or

programmes and other work
that is grouped together to
facilitate the effective
management of that work to
meet strategic business
objectives.

• The portfolio represents the

organisation’s set of active
programmes, projects,
subportfolios and other work at
a specific point in time

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Represents investments made or

planned by the organisation

Aligned with the organisation’s strategic

Common goals and objectives

features of Have some distinguishing features that

a portfolio permit the organisation to group them for
effective management
The components are quantifiable, i.e.
can be measured, ranked prioritised

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“The centralised management of one or more

portfolios, and involves identifying, prioritising,
authorising, managing and controlling projects,
programmes, and other related work, to achieve
specific strategic business objectives.”

Definition of
portfolio A business process that helps senior management
meet organisational needs

management
Enhances transparent and efficient decision making

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Importance of portfolio
management

• Need to answer the following questions:

• Are we doing the RIGHT projects?
• Are we spending in the RIGHT
places?
• Do we have enough of the RIGHT
resources?

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Maximize Maximize value of investments while minimizing the risk

Improve communication and alignment between

Improve divisions and business leaders

Benefits of
portfolio Encourage business leaders to think "team“ and not
Encourage "me" and to take responsibility for projects

management
Allow Allow planners to schedule resources more efficiently

Reduce the number of redundant projects and make it

Reduce easier to kill projects

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Flow of control
Strategic intent determines the resources that should be allocated
to the portfolio

Strategic intent is mapped onto a set of projects and programs,

including their resource requirement

Each program then corresponds to the delegated subset of the

overall strategic intent

Each project is defined by its contribution to the portfolio’s

strategic intent, and can then be managed using the PMBoK®
Guide or PRINCE2
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Aligning Process Group Monitoring & Controlling

Process Group

Current
Identify Prioritise Monitor & control
Strategic Plan
components components portfolio risks

Develop Review & report

Categorise
portfolio risk portfolio
components
responses performance

Evaluate Balance Monitor business

components portfolio strategy changes

Communicate
Select
portfolio
components
adjustment

Identify
Auhtorise
portfolio
components
risks

Analyse
portfolio
risks

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PfM business process

overview
• Alignment of the components with corporate
strategy

• Viability of the components as part of the

portfolio, based on key indicators

• Value and relationship to other portfolio

components

• Available resources and portfolio priorities

• Additions and deletions of portfolio components

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Portfolio business
process activities

• Establish current corporate portfolio rules and

protocols
• Component prioritisation
• Decisions for funding
• Resource planning
• Constraint management
• W hat-if analysis
• Risk analysis
• Capacity optimisation
• Balancing the portfolio to ensure viable component
mix
• Status reporting and forecasting
• Re-ranking, postponing or cancelling components
• Monitoring of benefits realisation

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Project manager

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The role of the project manager

• Job descriptions vary, but most include responsibilities like planning, scheduling, coordinating, and
working with people to achieve project goals

• Remember that 97% of successful projects were led by experienced project managers, who can
often help influence success factors

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Suggested skills for project managers

• Project managers need a wide variety of skills

• They should:
• Be comfortable with change
• Understand the organisations they work in and with
• Be able to lead teams to accomplish project goals

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Suggested skills for project managers

• The Project Management Body of Knowledge

• Application area knowledge, standards, and regulations

• Project environment knowledge

• General management knowledge and skills

• Soft skills or human relations skills

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Ten most important skills and competencies

1 • People skills
2 • Leadership
3 • Listening
4 • Integrity
5 • Strong at building trust
6 • Verbal communication
7 • Strong at building teams
8 • Conflict resolution, conflict management
9 • Critical thinking, problem solving
10 • Understands, balances priorities

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The project manager can be chosen and installed

as soon as the project is selected for funding

This simplifies several start up activities

The project manager can be chosen later

Senior management briefs the project manager

Project manager begins with a budget and

The Project schedule
Manager

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Department heads are

usually functional
specialists

They have the required

technical skills to Decide who performs
evaluate all members of each task
their organization
Functional
Management
Decide how the task is
Functional managers: performed

Exercise a great deal of

control over every
aspect of the work that
gets performed within
their area
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Project managers are

usually generalists

It would be very unusual

for a project manager to
Rarely decide who
have all the technical performs each task
skills that are used on
their projects
Project
Management Lack the technical skills
to evaluate much of the
Project managers:
work performed on a
particular project

Exercise control very

little over most aspects
of the work that gets
performed on the project

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Functional managers
Functional managers should be more skilled
need technical skills; at analysis; project
project managers need managers should be
negotiation skills more skilled at
synthesis

Functional managers Functional managers

use the analytic are responsible for a
Comparing approach; project
small area; project
managers are
Functional & managers use
systems approach responsible for the big
picture
Project Managers

Functional managers
act as managers;
project managers act
as facilitators

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What needs to be done?

When must it be done?

Three Major
Questions facing How are the resources
Project Managers required to do the job to be
obtained?
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The parent company

The project and the client

Project Manager
Responsibilities The project team

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Proper usage of
resources
Timely and accurate
reports

The Parent
Keep project sponsor
Company informed
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Preserve the Keep the client

integrity of the informed of
project major changes

This may be
difficult with all
sides wanting
changes
The Project and the
Client
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Very few people will work for

the project manager

The “team” will disband at the

end of the project

The project manager must

The Project look out for everyone’s future
Team
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Might work on Small short-term

projects train
several projects new project
simultaneously managers

Experience as a
Start on small project manager
projects and is often seen as
work up to large a desirable step
projects on the corporate
Project Management ladder
Career Paths

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Acquiring adequate resources

Acquiring and motivating personnel

Dealing with obstacles

Making project goal trade-offs

Maintaining a balanced outlook

Breadth of communication
Special Demands on
Project Manager
Negotiation

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Project budgets are usually

inadequate

Resource trade-offs must be

considered

Crises occur that require special

resources

Acquiring Adequate
Resources Availability of resources is seen as a
“win-lose” proposition
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Acquiring and Motivating Personnel

• Most project workers are borrowed from functional managers

• The project manager negotiates for the desired worker but

• The project manager wants the best qualified individual
• The functional manager decides who to assign

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Acquiring and Motivating Personnel

• The functional manager also decides:
• The skill level to assign
• The pay and promotion of the worker

• Worker will most likely return to the functional manager once the project is finished

• Once workers are assigned to a project, the project manager must motivate them
• The project manager has little or no control over pay and promotion

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High-quality technical skills

Political, and general,

sensitivity

Strong problem orientation

Most
Strong goal orientation
Important
Characterizes
for Team High self-esteem
Members

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Every project is unique

The project manager should be ready to face a

series of crises

A big problem is “scope creep”

Good project managers are fire preventers

hopefully, but also fire fighters

Early problems are associated with resources

Dealing with
Obstacles Later problems are
Last-minute schedule and technical
changes
associated with: The happenings to a team when the
project is completed
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Cost

Time
Project managers
must make trade-
offs between the
project goals of:
Scope

Multiple projects

Ancillary goals
Project goals and
organizational goals

Making Project Project, firm, career

Goal Trade-Offs
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Relative
Importance
of Project
Objectives

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Hard to tell where a project is

headed
Outlook can change over the life of a
project
Technical problems cause waves of
pessimism and optimism
Mood swings can hurt performance
Maintaining
a Balanced Maintaining a positive outlook is a
Outlook delicate job

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WHY PROJECTS SOME PROJECTS FAIL SUPPORT OF THE

EXIST TOP MANAGEMENT IS
NEEDED

A STRONG MUST BE FLEXIBLE

Breadth of INFORMATION
NETWORK IS NEEDED

Communication

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ACQUIRING MOTIVATING DEALING WITH

ADEQUATE PERSONNEL OBSTACLES
RESOURCES

MAKING HANDING MAINTAINING

PROJECT GOAL FAILURE COMMUNICATION
TRADE-OFFS
Negotiations
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CREDIBILITY SENSITIVITY LEADERSHIP, ETHICS,

AND MANAGEMENT
STYLE

Attributes
of Effective
Project ABILITY TO HANDLE
STRESS
THEY MUST ALSO
HAVE THE DRIVE TO

Managers
COMPLETE THE TASK!

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TECHNICAL ADMINISTRATIVE
CREDIBILITY CREDIBILITY

Credibility
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Political sensitivity

Interpersonal sensitivity

Technically sensitivity
Sensitivity
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“a process of
social influence,
which maximizes
Leadership the efforts of
others, towards
the achievement
of a goal”

Strong sense of ethics

Leadership, Ethics,
and Management A management style that fits
Style the project

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Leadership
Competencies

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Project managers must adapt to

the social and cultural
environment in which they are
working

This is especially true when the

project is in another country

Problems can arise in

Problems of international projects, when a
Cultural Differences culture’s opinion of some group
is different from that of the firm
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TECHNOLOGY INSTITUTIONS

Aspects of Culture LANGUAGE ART

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Time

ge S
le d e protaffin
n ow eopl je c g
Culture and the K fp ts
Project o

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Conflict and the project life cycle

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Conflict

Conflict: the process which begins when one party perceives that
the other has frustrated some concern of his

Our concern is goal conflicts that occur when a group pursues goals
different from other groups

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Identifying and Analyzing Stakeholders

Identify stakeholders

• Usually through expert judgment of PM

• Create stakeholder register
• Create stakeholder issue log

Analyze stakeholders

• Update stakeholder register

• Power-Interest Grid
• Commitment Assessment Matrix
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Managing Stakeholder Engagement

1 2 3 4
Obtain and Communicate Proactively Resolve
conform with address issues in a
stakeholder stakeholders stakeholder timely fashion
commitment concerns

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Categories of Conflict

DIFFERENT GOALS UNCERTAINTY INTERPERSONAL

AND EXPECTATIONS ABOUT AUTHORITY CONFLICT

94

94

Project Formation
Conflict focuses around the confusion of starting
a new project
• Many of the policies and procedures have not yet been formed
• The objectives of the project are not yet finalized

Conflict cannot be avoided at this phase

In fact, much of this conflict is good conflict

95

95

Handling Project Formation Conflict

Senior
management
Technical
objectives and line
managers
must be set must commit
to the project

Organizational
The priority for structure of the
the project
must be set project must
be established

96

96

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Project Buildup

CONFLICTS TEND TO BE CONFLICTS BETWEEN THE PM

TECHNICAL IN NATURE AND THE FUNCTIONAL AREAS
TEND TO PREDOMINATE

97

97

Main Program
Some tasks will be late
Schedules are a major and the schedule should
source of conflict be adjusted or the time
made up

The more complex the

project, the more difficult There are also technical
it is to trace the sources conflicts
of conflict

98

98

Project Phase-Out

DEADLINES ARE A MAJOR TECHNICAL PROBLEMS PERSONALITY CONFLICTS

SOURCE OF CONFLICT ARE RARE WILL BE A BIG DEAL DUE
TO TIME PRESSURES

99

99

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Conflict handling modes in preference order

1. Each strategy can be considered as being high, medium, or low on two dimensions: importance
of the task or goal, and importance of the relationship between the people having the conflict
(high/low, medium/medium, and so on).
• Confrontation or problem-solving: Directly face a conflict (high/high).
• Compromise: Use a give-and-take approach (medium/medium).
• Smoothing: De-emphasize areas of differences and emphasize areas of agreement
(low/high).
• Forcing: The win-lose approach (high/low).
• Withdrawal: Retreat or withdraw from an actual or potential disagreement (low/low).

100

100

Conflict
handling
modes

101

101

The Nature of Negotiation

THE PROCESS THROUGH WHICH TWO PARTIES TO A NEGOTIATION OFTEN SEE PROJECT MANAGER MUST AVOID THIS
OR MORE PARTIES SEEK AN THEMSELVES AS OPPONENTS (“IF THEY ON PROJECTS AS ALL STAKEHOLDERS
ACCEPTABLE RATE OF EXCHANGE FOR WIN, I LOSE”) ARE INTERRELATED
ITEMS THEY OWN OR CONTROL

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Some Requirements and Principles of Negotiation

• Few conflicts have to do with whether or not a task will be undertaken

• Instead, they have to do with the design of the deliverable

• How
• Whom
• When
• What cost

• The work of the project should get done

• If not, everyone loses

103

103

Requirements for Conflict Reduction Methods

• They must allow the conflict to be settled without irreparable harm to the project’s objectives

• They allow and foster honesty between the negotiators

• Win-win situation for all parties involved

104

104

Principled Negotiation

1 2 3 4
Separate the Focus on Before trying to Insist on using
people from the interests, not reach objective criteria
problem positions agreement,
invent options for
mutual gain

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105

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Project organisation

106

Organisational Structures
• Most people understand what organisational charts are.

• Many new managers try to change organisational structure when other changes are needed.

• Three basic organisational structures

• Functional: functional managers report to the CEO
• Project: program managers report to the CEO
• Matrix: middle ground between functional and project structures; personnel often report to two or more
bosses; structure can be weak, balanced, or strong matrix

107

107

Functional organisation

108

108

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Functional organisation
• Clear lines of authority according to type of work
• Grouped by areas of specialization
• One and only one supervisor
• Functional manager
Controls the budget

Makes project decisions

Coordinates project communications

109

109

Functional organisation (Advantages & Disadvantages)

• Advantages
• Unity of command – only one “boss” is giving instructions
• Workers learn from each other and keep skills sharp
• Continue to report to the same functional manager
• Share resources among multiple small projects

• Disadvantages
• Slow communications across multiple functions
• Technical difficulty in incorporating input from other disciplines
• Long communication channels make for slow decision making and slow response to change

110

110

Project
organisation

111

111

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The project manager has authority for

budgets, personnel, and decision making

Project People report upward through the project

organisation manager

The reporting manager is a project

manager, not a functional manager
112

112

Advantages

• Traditional department barriers are reduced

• Unity of command
• Communication response times are fast
• Co-location – team members are physically
close
Project Disadvantages
organisation • Cost of assigning members to one part-time
project
• Team work methods may differ from the
organization
• Teams may fail to communicate lessons
learned
• Discipline-specific competence may suffer

113

113

Matrix organisation

114

114

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Matrix organisation
Project manager and functional manager share
authority

Team members report to both managers

Combination:

• Task focus → projectized organization

• Technical capability → functional organization

115

115

Matrix organisation (Advantages)

Shared resources
Good cooperation High-quality
between Reduced
departments and between decisions are well
duplication departments received
projects

Continued
Flexibility – weak,
development of Effective Lessons learned
discipline specific balance, strong
integration shared effectively matrix
knowledge

116

116

Matrix organisation
Each
More sources
employee has
two “bosses” of conflict

More
More
challenges to
meetings control
117

117

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Comparison
118

118

Comparison

119

119

120

120

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Group Assignment 1

Due 1
August 2022
Class Test 1

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121

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