1. Project Management: A Managerial Approach
Chapter 4 – Project Organization

2. Overview Project “Fit” in Organizations Types of Organizations
The Project Management Office (PMO)
Project Teams

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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”

12. Pure Project Organization

13. 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

14. The Matrix Organization
Rather than being a stand alone organization, like the pure project, the matrix project is not separated from the parent organization:

15. 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

16. 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

17. 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

18. 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.

19. 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

20. Mixed Organizational Systems
Pure functional and pure project organizations may coexist in a firm

21. 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

22. Staff Organization

23. 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

24. 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

25. 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

26. 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

27. 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

28. 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

29. Human Factors and the Project Team
Inspiring 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 facilitate motivation of team
How are technical employees motivated?
Recognition
Achievement
The work itself
Responsibility
Advancement
Learning new skills

30. 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

31. 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

32. Interpersonal Conflict
The focus of conflict can often be related to the stage in the project’s life cycle
When the project is first organized, priorities, procedures and schedules all have roughly equal potential to cause conflict
During the buildup phase, priorities become significantly more important than any other conflict factor
In the main program phase schedules are the most important cause of conflict followed by technical disagreements
At the project finish, meeting the schedule is the critical issue

33. Interpersonal Conflict
Conflict and the Project Manager
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
Conflict avoiders do not make successful project managers
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

34. PLC and Conflict Intensity