PROJECT ORGANISATIONPROJECT ORGANISATION

Year 3 Project ManagementYear 3 Project Management

Dr. Margaret NelsonDr. Margaret Nelson

LECTURE OUTLINELECTURE OUTLINE

Types Types BackgroundBackgroundStructureStructureCultureCulture

TYPES OF TYPES OF ORGANISATIONSORGANISATIONS

Bureaucratic organisation Adhocratic organisation Tall hierarchy Flat hierarchy Clear and precise specification of task responsibilities

Ambiguous and overlapping task responsibilities

Reliance upon procedures for co-ordination

Reliance upon leadership and teamworking for co-ordination

Search for technical fixes to co-ordination problems

Development of organisational capabilities to solve co-ordination problems

Production driven Responsive to client needs Strong emphasis upon planning Strong emphasis upon learning by

doing Simple jobs in a complex organisation Complex jobs in a simple organisation Emphasis on productivity Emphasis on flexibility

RISE OF THE RISE OF THE PM CONCEPTPM CONCEPT

an organisational innovationan organisational innovation– a specialist co-ordinator of the processa specialist co-ordinator of the process

constructing large, complex systemsconstructing large, complex systems– railwaysrailways– aerospaceaerospace

the cold war programmesthe cold war programmes– Polaris/ AtlasPolaris/ Atlas

resource bases and project coordinatorsresource bases and project coordinators

RESOURCE BASES RESOURCE BASES & PROJECT CO-ORDINATORS& PROJECT CO-ORDINATORS

Project Manager Resource-Base Manager What is the task to be done? How will the task be done? When will the task be done? Where will the task be done? Why will the task be done? Who will do the task? What is the budget for the task What are the resources required for the

task? Quality of integration of task output into final product

Quality of task output

CLIENT CLIENT RESPONSIBILITIESRESPONSIBILITIES

PromoterPromoter– defining needdefining need

FinancierFinancier– obtaining capitalobtaining capital

Decision-makerDecision-maker– appropriately timed decisionsappropriately timed decisions

RecruiterRecruiter– mobilising appropriate resource basesmobilising appropriate resource bases

The problem of managerial capabilitiesThe problem of managerial capabilities– in-house capabilityin-house capability– executive project managementexecutive project management

CLIENT PM CLIENT PM OPTIONSOPTIONS

client client

project coalition project coalition

executive project

manager

PM dept

PROJECT ORGANISATION PROJECT ORGANISATION IN CONSTRUCTIONIN CONSTRUCTION

Little coordination at the level of the Little coordination at the level of the project as a wholeproject as a whole

Mixing project and resource base Mixing project and resource base management responsibilitiesmanagement responsibilities

Poor trainingPoor trainingResource bases in the project coalitionResource bases in the project coalition

Challenges to Organizing ProjectsChallenges to Organizing Projects– The uniqueness and short duration of projects relative The uniqueness and short duration of projects relative

to ongoing longer-term organizational activitiesto ongoing longer-term organizational activities– The multidisciplinary and cross-functional nature of The multidisciplinary and cross-functional nature of

projects creates authority and responsibility dilemmasprojects creates authority and responsibility dilemmas

Choosing an Appropriate Project Management Choosing an Appropriate Project Management StructureStructure– The best system balances The best system balances

the needs of the project the needs of the project with the needs of the with the needs of the organizationorganization

PM STRUCTURESPM STRUCTURES

PM STRUCTURESPM STRUCTURES

Different segments of the project are Different segments of the project are delegated to respective functional unitsdelegated to respective functional units

Coordination is maintained through normal Coordination is maintained through normal management channelsmanagement channels

Used when the interest of one functional Used when the interest of one functional area dominates the project or one area dominates the project or one functional area has a dominant interest in functional area has a dominant interest in the project’s successthe project’s success

FUNCTIONAL FUNCTIONAL ORGANISATIONORGANISATION

FUNCTIONAL FUNCTIONAL ORGANISATION (2)ORGANISATION (2)

AdvantagesAdvantages

– No Structural No Structural ChangeChange

– FlexibilityFlexibility

– In-Depth In-Depth ExpertiseExpertise

– Easy Post-Project Easy Post-Project TransitionTransition

DisadvantagesDisadvantages

– Lack of FocusLack of Focus

– Poor IntegrationPoor Integration

– SlowSlow

– Lack of Lack of OwnershipOwnership

FUNCTIONAL FUNCTIONAL ORGANISATION (3)ORGANISATION (3)

Teams operate as separate units under Teams operate as separate units under the leadership of a full-time project the leadership of a full-time project managermanager

In a In a projectizedprojectized organization where organization where projects are the dominant form of projects are the dominant form of business, functional departments are business, functional departments are responsible for providing support for its responsible for providing support for its teamsteams

DEDICATED TEAMSDEDICATED TEAMS

DEDICATED TEAMS DEDICATED TEAMS (2)(2)

AdvantagesAdvantages

– SimpleSimple

– FastFast

– CohesiveCohesive

– Cross-Functional Cross-Functional IntegrationIntegration

DisadvantagesDisadvantages

– ExpensiveExpensive

– Internal StrifeInternal Strife

– Limited Limited Technological Technological ExpertiseExpertise

– Difficult Post-Difficult Post-Project TransitionProject Transition

DEDICATED TEAMS DEDICATED TEAMS (3)(3)

PROJECT ORGANISATIONAL PROJECT ORGANISATIONAL STRUCTURESTRUCTURE

Hybrid organizational structure (matrix) is Hybrid organizational structure (matrix) is overlaid on the normal functional structure.overlaid on the normal functional structure.– Two chains of command (functional and project)Two chains of command (functional and project)– Project participants report simultaneously to both Project participants report simultaneously to both

functional and project managers.functional and project managers.

Matrix structure optimizes the use of resources.Matrix structure optimizes the use of resources.– Allows for participation on multiple projects while Allows for participation on multiple projects while

performing normal functional duties.performing normal functional duties.– Achieves a greater integration of expertise and project Achieves a greater integration of expertise and project

requirements.requirements.

MATRIX STRUCTUREMATRIX STRUCTURE

MATRIX MATRIX STRUCTURE (2)STRUCTURE (2)

Project Manager Negotiated Issues Functional Manager

What has to be done? Who will do the task? How will it be done?

When should the task be done? Where will the task be done?

How much money is available to Why will the task be done? How will the project involvementdo the task? impact normal functional activities?

How well has the total project Is the task satisfactorily How well has the functional been done? completed? input been integrated?

RESPONSIBILITIES IN RESPONSIBILITIES IN A MATRIX STRUCTUREA MATRIX STRUCTURE

Functional (also Weak or Lightweight) FormFunctional (also Weak or Lightweight) Form– Matrices in which the authority of the functional manager Matrices in which the authority of the functional manager

predominates and the project manager has indirect predominates and the project manager has indirect authority.authority.

Balance (or Middleweight) FormBalance (or Middleweight) Form– The traditional matrix form in which the project manager The traditional matrix form in which the project manager

sets the overall plan and the functional manager sets the overall plan and the functional manager determines how work to be done.determines how work to be done.

Strong (Heavyweight) FormStrong (Heavyweight) Form– Resembles a project team in which the project manager Resembles a project team in which the project manager

has broader control and functional departments act as has broader control and functional departments act as subcontractors to the project.subcontractors to the project.

DIFFERENT DIFFERENT MATRIX FORMSMATRIX FORMS

AdvantagesAdvantages

– EfficientEfficient

– Strong Project Strong Project FocusFocus

– Easier Post-Easier Post-Project TransitionProject Transition

– FlexibleFlexible

DisadvantagesDisadvantages

– Dysfunctional Dysfunctional ConflictConflict

– InfightingInfighting

– StressfulStressful

– SlowSlow

MATRIX MATRIX STRUCTURE (3)STRUCTURE (3)

An alliance of several organizations for the An alliance of several organizations for the purpose of creating products or services.purpose of creating products or services.– A “hub” or “core” firm with strong core A “hub” or “core” firm with strong core

competencies outsources key activities to a competencies outsources key activities to a collaborative cluster of satellite organizations. collaborative cluster of satellite organizations.

NETWORK NETWORK ORGANISATIONSORGANISATIONS

MOUNTAIN BIKE MOUNTAIN BIKE NETWORK PROJECTNETWORK PROJECT

AdvantagesAdvantages

– Cost ReductionCost Reduction

– High Level of High Level of ExpertiseExpertise

– FlexibleFlexible

DisadvantagesDisadvantages

– Coordination of Coordination of BreakdownsBreakdowns

– Loss of ControlLoss of Control

– ConflictConflict

NETWORK NETWORK ORGANISATIONS (2)ORGANISATIONS (2)

Source: Larson, E. W., and Gobeli, D. H., “Matrix Management: Contradictions and Insights,” California Management Review, vol. 29, no. 4 (Summer 1987), p. 137.

RATED EFFECTIVENESS OF RATED EFFECTIVENESS OF DIFFERENT PROJECT DIFFERENT PROJECT STRUCTURES BY TYPESTRUCTURES BY TYPE

Organization (Form) ConsiderationsOrganization (Form) Considerations– How important is the project to the firm’s How important is the project to the firm’s

success?success?– What percentage of core work involves What percentage of core work involves

projects?projects?– What level of resources (human and physical) What level of resources (human and physical)

are available?are available?

CHOOSING THE CHOOSING THE APPROPRIATE PM APPROPRIATE PM STRUCTURESTRUCTURE

Project ConsiderationsProject Considerations– Size of projectSize of project– Strategic importanceStrategic importance– Novelty and need for innovationNovelty and need for innovation– Need for integration (number of departments involved)Need for integration (number of departments involved)– Environmental complexity (number of external Environmental complexity (number of external

interfaces)interfaces)– Budget and time constraintsBudget and time constraints– Stability of resource requirementsStability of resource requirements

CHOOSING THE CHOOSING THE APPROPRIATE PM APPROPRIATE PM STRUCTURE (2)STRUCTURE (2)

A system of shared norms, beliefs, values, and A system of shared norms, beliefs, values, and assumptions which bind people together, assumptions which bind people together, thereby creating shared meanings.thereby creating shared meanings.

The “personality” of the organization that sets it The “personality” of the organization that sets it apart from other organizations.apart from other organizations.

– Provides a sense of identify to its members.Provides a sense of identify to its members.

– Helps legitimize the management system of the Helps legitimize the management system of the organization.organization.

– Clarifies and reinforces standards of behavior.Clarifies and reinforces standards of behavior.

ORGANISATIONAL ORGANISATIONAL CULTURECULTURE

KEY DIMENSIONS KEY DIMENSIONS DEFINING AN DEFINING AN ORGANISATION’S CULTUREORGANISATION’S CULTURE

Study the physical characteristics of an organization – Study the physical characteristics of an organization – architecture, office layout, decorarchitecture, office layout, decor

Read about the organization – Public documents e.g. Read about the organization – Public documents e.g. annual reports, internal newsletters, vision statementsannual reports, internal newsletters, vision statements

Observe how people interact within the organization – Observe how people interact within the organization – pace, language, meetings, issues discussed, decision pace, language, meetings, issues discussed, decision making style, communication patterns, ritualsmaking style, communication patterns, rituals

Interpret stories and folklore surrounding the Interpret stories and folklore surrounding the organization – stories, anecdotes, heroines, heroes, organization – stories, anecdotes, heroines, heroes, villiainsvilliains

IDENTIFYING CULTURAL IDENTIFYING CULTURAL CHARACTERISTICSCHARACTERISTICS

Challenges for Project Managers in Challenges for Project Managers in navigating Organizational Culturesnavigating Organizational Cultures– Interacting with the culture and subcultures of Interacting with the culture and subcultures of

the parent organizationthe parent organization– Interacting with the project’s clients or Interacting with the project’s clients or

customer organizationscustomer organizations– Interacting with other organizations Interacting with other organizations

connected to the projectconnected to the project

IMPLICATIONS OF IMPLICATIONS OF ORGANISATIONAL ORGANISATIONAL CULTURECULTURE

MECHANISMS FOR MECHANISMS FOR MAINTAINING MAINTAINING ORGANISATIONAL CULTUREORGANISATIONAL CULTURE

READING LISTREADING LIST

Gray, C. F. and Larson, E. W. (2006), Project Management: The Gray, C. F. and Larson, E. W. (2006), Project Management: The Managerial Process, 3Managerial Process, 3rdrd Edition, NY: McGraw Hill/Irwin. Edition, NY: McGraw Hill/Irwin.

Lock, D. (2001), The Essentials of Project Management, 2Lock, D. (2001), The Essentials of Project Management, 2ndnd Edition, Edition, Hampshire: Gower. Pp 31-54.Hampshire: Gower. Pp 31-54.

Reiss, G. (1995), Project Management Demystified: Today’s Tools Reiss, G. (1995), Project Management Demystified: Today’s Tools and Techniques, 2and Techniques, 2ndnd Edition, Winch, G, Lecture Notes Edition, Winch, G, Lecture Notes

Walker, A. (2002), Project Management in Construction, 4Walker, A. (2002), Project Management in Construction, 4 thth Edition, Edition, Oxford: Blackwell Publishing. Chapters 1-4, 11 & 12.Oxford: Blackwell Publishing. Chapters 1-4, 11 & 12.

http://www.ce.cmu.edu/pmbook/http://www.ce.cmu.edu/pmbook/ http://www.blackwellpublishing.com/winch/case.pdfhttp://www.blackwellpublishing.com/winch/case.pdf http://www.maxwideman.com/guests/index.htmhttp://www.maxwideman.com/guests/index.htm

Any Questions?Any Questions?

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