1. INEN261: Chapter # 5 The Project and the Organizational Structure
Presented by:
Jasim Alnahas

2. Chapter Learning Outcomes
If you complete the given assignments for this chapter you will:
Understand Organizational structures and how they vary between different institutions
Understand the importance of project organization and its impact on project success and the activities of the Project Manager
Understand how effective project managers build a strong project team
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3. Lets move beyond the Project Manager to the organization of the project
Organization must be discussed at two levels
How is the Project Team organized to accomplish the project work?
How does the Project Team fit within the overall organization of the enterprise (or enterprises)
We will start with fitting the team into the overall organization
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4. Traditional Forms of Organization
Functional
Projectized
Matrix
Composite
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Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012

5. Think of enterprise organizational structure as fitting somewhere within a continuous spectrum with two endpoints:
A purely functional organization
A purely “projectized” organization
A “pure” organization of either extreme rarely exists.
Purely
Functional
Projectized
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6. Projects in a Functional Organization
Make it a part of one of the functional divisions
More than one choice may exist
If support from other areas is needed, they are expected to help support the project
Another way is to assign the work to all divisions with the top management overseeing the effort
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7. The functional (classical) organization
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8. Engineering organizations (can also be purely functional)
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9. Advantages Maximum flexibility in the use of staff
Experts can be utilized by many different projects
Specialists can be grouped to share knowledge and experience
Functional division serves as a base of technological continuity
Functional division contains the normal path of advancement
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Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012

10. Disadvantages Client is not the focus of the activity
Functional units tend to be oriented toward the activities of that particular function
No individual is given full responsibility
Response to client needs is slow and arduous
Tendency to suboptimize the project
Motivation tends to be weak
A holistic approach to the project is not facilitated
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Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012

11. At the other end of the spectrum is the pure “Projectized” organization
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12. In most cases project teams are composed of team members selected from different functions and from different levels, because it is thought the team can solve a problem
Management Gaps
Project
Team
Functional Gaps
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13. In the “projectized” organization, putting a ring around the team is fairly easy
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14. Advantages Project manager has full authority
All members report to the project manager
Short lines of communication
When there are similar projects, expertise can be retained
Strong and separate identity
Swift decisions
Unity of command
Structurally simple and flexible
Supports a holistic approach
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Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012

15. Disadvantages Duplication in staffing Stockpiling
Workers tend to fall behind in other areas of their technical expertise
Inconsistency in policies and procedures
A project takes on a life of its own
Worry about life after the project is over
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Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012

16. But with the functional organization the project team spans functional and management gaps
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17. Successful projects within a functional organization are difficult
No one individual responsible and no customer focus
Project tasks are lower priority than functional tasks
Coordination across the gaps is tough
Projects are completed slowly
Solutions are functionally oriented
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18. But there are some advantages of housing Project in a functional organization
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
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19. Various strategies for project execution improvement evolved to mitigate these problems
Rules of engagement (policies, rules, procedures)
The well known “Five Stages” of a Project (later)
Project leaders
Temporary project leaders within functional departments
Task forces
Full and part time project staff commitments
Department leaders as Task Force Leaders
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20. Five Stages of a Project: Stage 1 – We are told to proceed with the project!
Excitement and euphoria
We got the job!!!
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21. Stage 2: Realization of the enormity of the project sets in
Disenchantment
We actually have to do what we said we could do!
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22. Stage 3: Something is bound to go wrong
Search for the guilty
Why did this turn into such a mess?
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23. Stage 4: There have to be consequences when things go wrong
Punishment of the innocent
You can bet it is not the boss.
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24. Stage 5: Somehow, finally you reach the completion of the project
Distinction and rewards for the uninvolved and undeserving
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25. A late stage of the evolution toward the “Projectized” organization results in the Matrix Organization
PMgr X
PMgr Y
PMgr Z
Project Responsibility
Functional
Responsibility
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26. A variation of the matrix with a manager of project managers
VP Projects
PMgr X
PMgr Y
PMgr Z
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27. Strong Matrix Figure 5-3 5-27
Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012

28. Weak Matrix
Project might have only one full-time person, the project manager
Functional departments devote capacity to the project
Primary task of the project manager is to coordinate project activities carried out by the functional departments
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Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012

29. Why a Matrix organization for projects?
Gives projects “status” within the organization. The PM has some authority.
Project processes and procedures can be customized to fit the project
Project staff can be shared between projects and have a home at the end of the project assignment.
Attempts to get the best of both organizational extremes
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30. Advantages The project is the point of emphasis
The project has access to the entire organization for labor and technology
Less anxiety about what happens when the project is completed
Response to client needs is rapid
Access to administrative units of firm
Better balance of resources
Great deal of organizational flexibility
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Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012

31. Disadvantages Power balance is delicate Projects compete for resources
Projectitis is still a serious disease
Division of authority and responsibility is complex
Matrix management violates the management principle of unity of command
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Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012

32. Virtual Projects
Project team crosses time, space, organizational, or cultural boundaries
Facilitated by the use of the Internet
Often organized as a matrix
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Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012

33. Virtual Project Rules Challenging and interesting projects
Use volunteers
Include few people who know each other
Create an online resource to learn about each another
Encourage frequent communication
Divide work into independent modules
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Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012

34. What is the “Best” organization for accomplishing successful projects?
There is no universal best. Only best for your organization. And even that “best” is temporary.
It depends:
Project size
Project length
Experience with PM organization
Upper mgt. philosophy and experience
Project location
Resource availability
Other factors
But Project Work is not the only work to be done
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35. How do we organize the Project?
Typical Project Organizational Components
Project Manager
Assistant Project Manager
Project Office
Project Team
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36. The Project Organization Chart
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37. The Project Office vs. the Project Team
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38. Project Office vs. Project Team
The project office staff typically are assigned full time and provide functional support to the project
The project team are chosen for their technical expertise and generally contribute to a variety of projects
I will generally not differentiate between full and part time project assignments
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39. Selecting the Project Team
Typically a joint responsibility of the Project Manager and the functional manager
Based on the work breakdown structure (WBS) which defines the work to be accomplished
Skills requirements for tasks are assessed and similar skills are aggregated to determine overall project needs
From this baseline, the functional departments are contacted to locate individuals who can meet these needs
Negotiations ensue
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40. Staffing a project (determining the people resource) is a balancing act
The PM wants to choose the very best from throughout the organization
The general management or functional managers want to assign staff to satisfy their own, sometimes different organizational objectives
Utilization
Human resource growth
Availability
Others?
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41. The Project Office Dedicated to the project
Usually solid line reported to the PM
Often located in project space
Can provide both project management and functional support
Assistant or “section” managers responsible for managing bid packages or major subsystems
Billing, record keeping, communications, IT, even HR support
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42. Assigning people (even the right ones) to the project does not assure success
“Managers are needed to convert disorganized resources of people, machines, and money into a useful enterprise.” (Newman & Warren, The Process of Management)
What you have at the outset is disorganization
The conversion process requires building a high performing team of project participants
This is not always easy – people are involved
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43. Assignment to a project means change
Change brings on anxiety
Anxiety creates barriers to effective teamwork
Without effective teamwork among the project staff it is unlikely that the project will be successful
Creating a TEAM within the temporary organizational structure of a project is an early Project Management responsibility
Effective PM’s realize that they have to do something to build (and maintain) teamwork.
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44. Building a Team: The PM and the Team need to get to know one another
PM/Individual meetings to discuss
Project objectives
Who will be involved and why
The importance of the Project
Why you are involved
Rewards/incentives for excellent performance
Problems/constraints/challenges of the project
Rules of the Project Road
Suggestions for improvement
Professional development agendas
The necessity for teamwork
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45. Building a Team: The team members must get to know each other
Project Kickoff meetings or events (with the staff although client customer meetings are important too)
Project administration
Project scope
Project schedule
Project budget
Project deliverables
Client/customer desires or special needs
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46. Barriers to effective teams and tips for overcoming them (1)
Differing outlooks, priorities, judgments
Smoke them out early
Clarify responsibilities and project priorities
Align individual interests with project duties
Role conflicts
Ask people to define their role in their terms
Correct or reassign as necessary
Communicate roles and role changes continuously
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47. Barriers to effective teams and tips for overcoming them (2)
Project objectives not clear
Clarify (Internally and Externally)
Communicate (I and E)
Continual change (the moving target)
Try to slow or stop the target with the client
Plan for multiple environments/contingency plans
Team leadership competition
Clarification from above
Demonstrate the right to lead (win the competition)
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48. Barriers to effective teams and tips for overcoming them (3)
Lack of team definition and structure
Draw the org chart
Reinforce with team meetings
Specialized communication mediums
People don’t want to work on the project or aren’t committed
Find out why
Explain advantages in personal terms
Ask functional manager to explain
Find new staff
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49. Barriers to effective teams and tips for overcoming them (4)
Credibility of Project Manager
Demonstrate top management support for you in this role
Seek functional manager’s support and confidence
Earn respect via sound decisions, hard and smart work
Sometimes replacing a single team member removes the doubt
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50. Barriers to effective teams and tips for overcoming them (5)
Communication problems
Over communicate
Written
One on one
Meetings
Involve clients and top management
Lack of upper management support
Bring them into the tent
Project reviews
Client reviews
Kill the project or find another job
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51. Management of the Team to a successful conclusion
Management involves:
Planning
Organizing
Staffing
Controlling
Directing
The first 3 are obvious. The last two may need some definition.
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52. Controlling in a management sense is similar to controlling in a systems engineering sense
Systems Control
Sensory Device
Control Device
Activating Device
Management Control
Measuring
Evaluating
Correcting
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53. Directing involves implementing through others to get the project completed
Includes steps to:
Staff
Train
Supervise
Delegate
Motivate
Counsel
Coordinate
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54. There are very different thoughts on human behavior that may govern how Project Managers control and direct the team
Theory X: The project team is composed of people who are inherently lazy and require supervision
Theory Y: The project team is composed of people who want to get the job done and will do so without constant supervision
Effective PM’s will use a variety of approaches to direct different team members
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55. Summary of Chapter 5
Organizational structures vary between different institutions
How the project organization is overlaid onto the overall organization can impact the chances of project success and the activities of the Project Manager
Generally organizations are moving toward a more project friendly organization as project success becomes more critical for organizational success
Acquiring adequate project staff can require negotiation
The effective project manager will develop a strong team among the project staff
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56. Next week
Chapters 4 and 8
Negotiations and scheduling
Assignment 2 is due early next week (see course calendar).
Project Staffing Requirements
What types of people are needed for the work? (Disciplines/skills and numbers)
How will they be organized? (Project organization chart(s)
Other Resources that are needed
Equipment, Space, Subcontractors etc.
Team Project Status Presentations is due next week. You need to send me your professional presentation.
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