1. Chapter Two
Project Organization

2. Types of Project Organization
Functional Organization
Pure Project Organization
Matrix Organization

3. Project Organization Functional Organization
Project is made a part of one of the functional divisions of the firm
Major Advantages
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 and even the parent firm.
Functional division contains the normal path of advancement for individuals whose expertise is in the functional area.

4. Functional Organization (Contd)
Disadvantages
Client is not the focus of activity and concern
Functional division tends to be oriented toward the activities particular to its function
Occasionally in functionally organized projects, no individual is given full responsibility for the project.
Response to client needs is slow and arduous.
Project issues that are directly within the interest area of the functional home may be dealt with carefully, but those outside normal interest areas may be given short shrift, if not totally ignored.
Motivation of people assigned to the project tends to be weak.
Such an organization arrangement does not facilitate a holistic approach to the project.

5. Pure Project Organization
The project is separated from the rest of the parent system. It becomes a self-contained unit with its own technical staff, its own administration, tied to the parent firm by the tenuous strands of periodic progress reports and oversight
Advantages
The project manager has full line authority over the project. All members of the project work force are directly responsible to the PM.

6. Pure Project Organization
Marketing
Manufacturing
R&D
Finance
Personnel
Manager, Project A
Marketing
Manufacturing
R&D
Finance
Personnel
Manager, Project B

7. Pure Project Organization
Advantages
The lines of communication are shortened and PM communicates directly with senior corporate management.
The project team that has a strong and separate identity of its own tends to develop a high level of commitment from its members.
Because authority is centralized, the ability to make swift decisions is greatly enhanced.
Unity of command exists.
Pure project organizations are structurally simple and flexible which makes them relatively easy to understand and to implement.

8. Pure Project Organization (Contd)
Disadvantages
When the parent organization takes on several projects, it is common for each one to be fully staffed. This can lead to considerable duplication of effort.
PM may stockpile equipment and technical assistance in order to be certain that it will be available when needed
Pure project groups seem to foster inconsistency in the way in which policies and procedures are carried out.
In pure project organizations, the project takes on a life of its own. Team members form strong attachments to the project and to each other.
Worry about “life after the project ends”.

9. The Matrix Organization
It couples some of the advantages of the pure project organization with some of the desirable features of the functional organization, and to avoid some of the disadvantages of each, the matrix organization was developed. In fact, the functional and the pure project organizations represent extremes.

10. Matrix Organization PM1 3 1 1/2 1/2 4 1/2 PM2 1 4 1/4 1 1/2 PM3 1/2 3
1/2 3 1

11. Matrix Organization Advantages
The project is the point of emphasis. PM takes responsibility for managing the project, for bringing it in time, within cost, and to specifications
There is less anxiety about what happens when the project is completed
Response to client needs is as rapid as in the pure project case
Consistency with the policies, practices, and procedures of the parent firm tends to be preserved.

12. Matrix Organization (Contd)
Where there are several projects simultaneously under way, matrix organization allows a better company wide balance of resources to achieve the several different time/cost/performance targets of the individual projects.
Disadvantages
The movement of resources from project to project in order to satisfy the several schedules may foster political infighting among the several P.Ms.

13. Matrix Organization (Contd)
For strong matrices, problems associated with shutting down a project are almost as severe as those in pure project organizations.
Division of authority and responsibility inherent in matrix management is complex.
Matrix management violates the management principle of unity of command. Project workers have at least two bosses.

14. Causes of Project Failure
Projects can fail for many reasons that are predictable and avoidable. Projects failures fall into three broad categories:
Project process-related factors,
Project-related factors, and
Uncontrollable factors.
Some common project process-related factors include:
too many concurrent projects,
too few individuals who can manage projects effectively,
poorly defined roles and reporting relationships among those engaged in a project.
wavering priorities and resource commitments to the project.

15. Causes of Failure (Contd)
Projects that have failed generally display several of the following characteristics:
The customer’s conditions of satisfaction have not been negotiated.
The project no longer has a high priority.
No one seems to be in charge.
The schedule is too optimistic
The project plan is not used to manage the project.
Sufficient resources have not been committed.
Project status is not monitored against the plan.

16. Causes of Failure (Contd)
No formal communications plan is in place.
The project has lost sight of its original goals.
There is no change management process in place.
Foreign aided projects: Sluggishness and bureaucracy of the Government.

17. Project Management - 20 Steps to Success
Execute the Project Plan
Carry out Quality Assurance
Develop your Project Team
Issue Status Reports
Manage Procurement of External Resources
Executing
Ensure the viability of your project
Develop the Project Charter
Initiating
Establish the Project Notebook/Extranet
Hold the Project Kickoff Meeting
Develop the Project Plan Develop the Scope Statement Develop the Work Breakdown Structure Define Project Activities Sequence Project Activities Estimate Project Activity Durations Develop the Project Schedule Estimate Project Costs Determine Resource Requirements Develop the Risk Response Plan Subsidiary Management Plans 5.a Develop the Scope Management Plan 5.b Develop the Schedule Management Plan 5.c Develop the Cost Management Plan 5.d Develop the Quality Management Plan 5.e Develop the Staffing Management Plan 5.f Develop the Communications Management Plan 5.g Develop the Risk Management Plan 5.h Develop the Procurement Management Plan
Planning
Control Project Changes
Manage Project Issues
Ensure Formal Acceptance of all Deliverables
Control the Project Scope, Schedule and Cost
Control the Project Quality
Report Project Performance
Control Project Risks
Monitoring and Controlling
Document Lessons Learned
Close the Project
Celebrate Project Success
Closing 17

18. Thank You