Project Management Project Organization Jiwei Ma
Content IIntroduction OOrganization theory BBasic organization types PProject organization and project PProject team building
Introduction PProject organization is the foundation of project management PProject objective is decisive to project organization PProject organization is designed mainly to carry out project controlling
Project Objective and Project Organization Objective Organization Production methods and tools Management methods and tools Production personnel Management personnel People Methods & Tools
Organization Model ORG Culture Social structure Physical Structure Technology Environment
Organization Theory OOrganization theory studies, The structural components of a system OOrganization structure TTask breakdown and responsibility definition MManagement functionalities arrangement The mechanism and procedure of a system TThe mechanism of material flow TThe mechanism of information flow
Development of Organization Theory AAdam Smith efficiency on division of labor social structure of organization KKarl Marx Relationships between the organization and individuals, fundamental antagonism between labor and the interests of capital EEmile Durkheim increasing specialization, hierarchy, interdependence of work tasks formal and informal aspects of organization tension between economic and human aspects
MMax Weber bureaucracy is objective and impersonal benefits of rationality (formal authority) types of social action: formal rationality, substantive rationality, affectional, traditional three types of legitimate ’ Herrschaft ’ : rational, traditional, charismatic FFredrick Winslow Taylor Scientific Management: method to discover the most efficient working techniques for manual forms of labor close supervision of highly specified physical work managerial control
HHenry Fayol universal principles for the rational administration of organizational activities principles: span-of-control, exceptions, departmentation, unity-of-command, hierarchy esprit de corps: unity of sentiment and harmony contribute to the functioning of an organization functions of manager: planning, organizing, command, coordination, control
Classical Organization Theory TThe classical organization theory is focused on the mechanism of power, authority, and control TThree types of organizations Charismatic authority BBased on the sacred or outstanding characteristic of the individual Traditional authority EEssentially a respect for custom Rational legal authority BBased on code or set of rules TThe last one was regarded as the predominant form of organization
BBureaucracy is the most efficient form of organization A legal code shall be established for all members to obey The code form a system of abstract rules, and administration looks after the interest of the organization within the limit of this system The person exercising authority also obeys this impersonal order Only through being a member does the member obey the law Obedience is due not to the person who holds the authority but to the impersonal order which has granted him this position
TThe theory is based on the assumption of formal and total rationality IIsolated from the environment TThe primary concern of the theory is the behaving mechanism to avoid corruption, unfairness, and nepotism within the organization instead of the slow, rigid and inefficient bureaucracy
Organization Theory - Modified TThe modified organization theory has less idealistic assumption and established organization control principles with more practical realism PPrinciples Division of work - Repetition of the same function brings speed and accuracy. Thus work should be divided according to skill and technical expertise Authority and responsibility - Authority is linked to responsibility, and together require increasing judgment and morality at senior levels
PPrinciples Discipline – essential for the smooth running of an organization Unity of command – an employee should receive orders from one superior only Unity of direction – One and one plan for a group having the same objective Remuneration of personnel AAssure fairness EEncourage keenness by rewarding well-directed effort AAvoid over-payment beyond reasonable limits
PPrinciples Equity – employees must be treated equally and fairly Stability of tenure of personnel – a period of stability will help employees to delivery their best Esprit de corps – dividing one ’ s own team is a grave sin against the business PProvide a key to modern organization and possible approach to current organizational solutions UUnable to explain many modern practices contradictory to the principles due to the limits
Hierarchical Organization A B1B2 B3 C22C21C23...
Example: Army Division Brigade …… Regiment …… Regiment …… Battalion Company
Functional Organization A B1B2B3 C5C6...
Example: Typical Functional Organization in Manufacturing Industry General Manager Sales/MarketingProductionR&DAccountingHuman Resource
Marketing VP Engineering VP Production VPSupply VP President Accounting VPHR VP Customer Service Mng Domestic S ales Mng I/E Mng Manufacturing Mng Assembly Mng Testing/Inspct. Mng Production Planning Mng Transportation Mng System Eng. Mng Electronic Eng. Mng Software Eng. Mng Mechanical Eng. Mng Technical Booking Mng Purchasing Mng Inspection Mng Example: Modified Functional Organization
Functional Organization AAdvantages Emphasis of specialization and opportunities for employees to obtain professional training and advances Promotion opportunity for professionals Professionals can work for different project at same time Functional department can be the basis of technical continuity and sustainability Stability of tenure of professionals
DDisadvantages Instead of customers, functional activities become the focus of departments It ’ s difficult to find a fully responsible person for a problem or fault Slow and hindered reaction to customer ’ s requirement due to multi-layer and multi-branch management structure Negligence of the needs of project and individuals working on project Difficult for cross-department coordination due to communication and information exchange barriers, which is critical to the complex project
Example: Project Organization General Manager MarketingProductionAccountingHuman ResourceR&DProject Manager A Project ManagerB Project Manager R&DProductionSalesAccountingHRR&DProductionSalesAccountingHR
Example: Project Organization Ajax Express Company President Engineering Manager Manufacturing Manager Supply Manager Consultant Engineering Manager Manufacturing Manager Supply Manager Subcontractor A Project ManagerB Project Manager Marketing VP Accounting VP Human Resource VP Legal Department VP
Project Organization AAdvantages Project manager is fully responsible for the project and directly report to senior management level Members of project team report to project manager Separation of project from functional department makes communication simple and easy Unity of direction enables project teams to concentrate on project objective Centralization of management expedites the decision making process and enable an fast reaction Unity of command
DDisadvantages Duplication of resource input when there are more than one project Waste of critical resources due to project manager ’ s preparatory inventory Inconsistency in company ’ s regulatory management Difficulty for communication and information exchange Lack of stability of tenure and continuity of professional career for employees
Matrix Organization A X1X2X3 Y1 Y2 Y3
Example: Matrix Organization General Manager MarketingProductionAccountingHR R&DProject Mng. A Proj. Mng B Proj. Mng C Proj. Mng
Example: Matrix Organization Ajax Express Company President Marketing VP Accounting VP HR VP Legal Dept. VP Project VPEngineering VPManufacturing VPLogistics VP A Project Manager B Project Manager C Project Manager PMSystemElectronicSoftwareMechanical Technical Booking Assembly Inspection & Testing ProductionInstallationTraining Jack Beth Jack Jim Jeff Joe Julie Maggie Cattry Jen CathyRose Steve Rose Dennis Jessi Chris Sharon Katie Tyler GerriWendy Hanna Paul
Multi-level Matrix Organization A A Y1 Y2 Y3 X1 X2 X3 Y1X1Y1X2 Y!Y1 Y!Y2 Y2X1Y2X2 Y2Y1 Y2Y2 A A X Y YX YY
Matrix Organization AAdvantages Most of works center around project Different projects can share the expertise of various functional departments Project team member has a strong connection to project, while still maintains a sense of belonging Fast reaction to both internal and external requirement Part of project team members are from administrative department, it helps to maintain the consistency in regulatory management Easy to maintain the balance of resource input among different project
DDisadvantages Lack of the unity of command Project manager will concentrate on project objective, instead of company ’ s objective It ’ s difficult to allocate resources and easy to invoke dispute between project managers High demand on the coordination between project manager and functional department manager
Comparison of Various Organization Structures Functional Matrix Project Light- weight BalancedHeavy- weight Project manager ’ s power Few or none LimitedmiddleStrongFully authorized Percentage of full time members None0 – 25%15 – 60%50 – 95%85 – 100% Project manager position Part-time Full-time Title for project manager Project Coordinato r Project Manager Project administrative personnel Part-time Full-time
Project Organization Case An office building is fully invested by public fund and will be used by a governmental institute. This institute does not have construction specialist or a team to manage the project, so it ’ s decided to hire a consulting company to manage the project under an owner ’ s representative. The owner ’ s representative, reporting to the director of this governmental institute, will be fully responsible for all of the project issues. Any decision regarding major functionality and project implementation of this office building will be made by top management level of this institute, and than carried out by the owner ’ s representative. It is also required by law to hire a certified consulting company to deal with project procurement, and a site supervising company to monitor the construction procedure.
Project Organization Case A state owned company decided to expand its production capacity by building a new facility. This company has a maintenance team with mechanical, electrical, and production equipment engineers. The top management level assigned an owner ’ s representative to be responsible for all the project issues, who will directly report to the president of the company. A decision-making committee has been established to monitor the project and support the president regarding critical decision making procedure. The company decided to hire a consulting company to provide project management consulting service to the owner ’ s representative and owner ’ s project engineers. It is also required by law to hire a certified consulting company to deal with project procurement, and a site supervising company to monitor the construction procedure.
Project Organization Case A foreign invested joint-venture is going to build an industrial facility in China. This company has a maintenance team with mechanical, electrical, and production equipment engineers. The company has set up a project engineering department to deal with project engineering issues. The director of the project engineering department will be reporting to the chief operating officer of the company. Other functional departments of the company such as purchasing, accounting, etc. will also be involved in certain project issues. A consulting team has been hired as a part of the project engineering department to deal with project management issues as well as certain technical issues during design and construction procedure. A site supervising company has also been hired to monitor the construction procedure.
Team Building BBasic Concept TTypes of Team RRules of a Team SSteps to Build a Team TTeam Effectiveness
BBasic Concept A team is a group of people working towards a common goal Every team member has his/her own goals in a hierarchy system that conform to the common goal A team may be a formal organization or an informal workgroup Team building is the process of enabling that group of people to reach their goal
Types of Team – in Size
Type of Team Building ScaleKey Factors Individual1 personIndividual skills and perceptions Small Team2-12 peopleRelationships between people Team Island2 or more teams Relationships between teams Organization15+ peopleThe culture of the organization
Team Building RRules of a Team Purpose: Members share the vision and the sense of the mission Priorities: Members know what needs to done next, by whom, and by when Roles: Every member know his own role Decisions: Authority and decision making lines are clearly understood Conflict: Conflict is dealt openly and is considered important issues Personal traits: members feel their unique personalities are appreciated and well utilized.
RRules of a Team Norms: Group norms for working together are well established and observed. Effectiveness: Members find team meetings efficient and productive. Success: Members share the clear view of the team ’ s success and the sense of accomplishment. Training: Opportunities for updating skills are provided and taken advantage of by team members.
SSteps to Build a Team Forming Storming Norming Performing Adjourning
Steps to Build a Team FForming Personal relations are characterized by dependence Members have a desire for acceptance by the group Members behave to keep things simple and to avoid controversy Serious topics and feelings are avoided Discussion centers around orientation to tasks and one another To advance to next step, members have to risk discussions beyond non-threatening topics with possible conflict
SStorming Characterized by competition, conflict in personal relations and organization of tasks/functions Conflicts arise when members are organized for tasks and structured for function Individuals have to bend to suit the group organization There will be questions over leadership, structure, power, and authority To advance to the next step, members have to move from a “ testing and proving ” mentality to a problem-solving mentality
NNorming Characterized by cohesion and recognition Members are willing to change and mold their feelings, ideas, attitudes, and beliefs Leadership is shared and cliques dissolve with more and more sense of group belonging Data flow between group members increases and creativity is high Interactions between members are characterized by openness and sharing of information
PPerforming Not reached by all groups Characterized by interdependence in personal relations and efficiency of problem solving Members can work independently, in subgroups, or as a total unit with equal performance Roles and authorities can dynamically adjust to the changing needs of the group and individuals Members are both highly task and people oriented Group morale is high and group loyalty is intense
AAdjourning Characterized by termination of task behavior and disengagement from relationships There will be a recognition for participation and achievement There might be a sense of fear due to the feeling of giving up control and inclusion in the group
Team Building TTeam Effectiveness Team goals are development through team interaction and by members ’ willingness Participation of team members is high Feedback is asked openly and given freely with a desire to help Decision making is participated actively by all members Leadership is distributed and shared among team members
TTeam Effectiveness Problem solving becomes the focal point of team work Conflict is not suppressed, but openly dealt and managed among team members in order to improve team performance Team member resources (talents, skills, knowledge, and experiences) are fully identified, recognized, and utilized whenever appropriate. Risk taking and creativity are encouraged, while mistakes are treated as a source of learning rather than reasons for punishment
TTeam Leader To put forward exciting vision with team members and keep it in front of the team To help the team develop principles, including norms, success criteria, performance quality standards, and reward system To facilitate communication and information exchange within the team To tolerate failure To accept group decision even with personal disagreement when needed To act as interface and buffer between team and rest of the world
TTeam Member To take responsibility To be positive in determining team principles To have a positive attitude toward any changes To accomplish tasks with a strong feeling of control To make kind and constructive criticism Don ’ t have to be a good friend, but need to be a good teammate