1. 4-1 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e C HAPTER 4 Project Organisational Structures and Cultures

2. 4-2 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Learning Elements 4.1. Understand the different project organisational structures that broadly define how the project fits with the organisational structures that may already exist in an organisation. 4.2.Realise the importance of an organisation’s culture and the effect it can have on the management of a project.

3. 4-3 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Project Management Structures Challenges to organising projects The uniqueness and short duration of projects relative to ongoing longer-term organisational activities. The multidisciplinary and cross-functional nature of projects creates authority and responsibility dilemmas

4. 4-4 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 1. Functional organisations 2. Dedicated project teams 3. Matrix arrangement Weak matrix Balanced matrix Strong matrix Project Management Structures (cont.)

5. 4-5 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Functional Organisations Different segments of the project are delegated to respective functional units. Coordination is maintained through normal management channels. Used when the interest of one functional area dominates the project or one functional area has a dominant interest in the project’s success.

6. 4-6 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Functional Organisations (cont.) Advantages No structural change Flexibility In-depth expertise Easy post-project transition Disadvantages Lack of focus Poor integration Slow Lack of ownership 3–63–6

7. 4-7 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Functional Organisations (cont.)

8. 4-8 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Dedicated Project Teams Teams operate as separate units under the leadership of a full-time project manager. In a projectised organisation, where projects are the dominant form of business, functional departments are responsible for providing support for its teams.

9. 4-9 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Dedicated Project Teams (cont.) Advantages Simple Fast Cohesive Cross- functional integration Disadvantages Expensive Internal strife Limited technological expertise Difficult post-project transition 3–93–9

10. 4-10 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Dedicated Project Teams (cont.)

11. 4-11 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Dedicated Project Teams (cont.)

12. 4-12 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Matrix Organisations Weak form The authority of the functional manager predominates and the project manager has indirect authority. Balanced form The project manager sets the overall plan and the functional manager determines how work to be done. Strong form The project manager has broader control and functional departments act as subcontractors to the project.

13. 4-13 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Matrix Organisations (cont.) Advantages Efficient Strong project focus Easier post- project transition Flexible Disadvantages Dysfunctional conflict Infighting Stressful Slow 3–13

14. 4-14 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Matrix Organisations (cont.)

15. 4-15 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e What is the Right Project Management Structure? Organisation (form) considerations How important is the project to the firm’s success? What percentage of core work involves projects? What level of resources (human and physical) are available? 3–15

16. 4-16 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e What is the Right Project Management Structure? (cont.) Project considerations Size of project Strategic importance Novelty and need for innovation Need for integration Environmental complexity Budget and time constraints Stability of resource requirements 3–16

17. 4-17 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Organisational Culture A system of shared norms, beliefs, values and assumptions which bind people together, thereby creating shared meanings.

18. 4-18 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Organisational Culture (cont.) The ‘personality’ of the organisation that sets it apart from other organisations Provides a sense of identify to its members Helps to legitimise the management system of the organisation Clarifies and reinforces standards of behaviour

19. 4-19 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Key Dimensions Of Organisational Culture 1 Member identity 2 Team emphasis 3 Management focus 4 Unit integration 5 Control 6 Risk tolerance 7 Reward criteria 8 Conflict tolerance 9 Means versus end orientation 10 Open-systems focus

20. 4-20 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Organisational Culture

21. 4-21 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Identifying Cultural Characteristics Study the physical characteristics of an organisation Public documents Read about the organisation. Behaviour Observe how people interact within the organisation. Folklore Interpret stories and folklore surrounding the organisation.

22. 4-22 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Identifying Cultural Characteristics (cont.)

23. 4-23 Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Key Terms balanced matrix dedicated project team functional structure matrix organisational culture projectitis Project Management Office (PMO) projectised organisation strong matrix weak matrix