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Projects & Organizations Environment (1)
The Functional Organization
The activities constituting a project are performed respectively bythe relevant functional unit of the organization. In this case,coordination of project activities are undertaken by the higherfunctional levels of management
The Functional Matrix
An individual is selected who will oversee and coordinate theproject activities across the various functional levels of the
organization. Functional managers are responsible for managingtheir respective segments of the project, decide who does whatand when the project is to be completed, and evaluate theparticipants. Their influence is greater than that of the projectmanager, who has indirect authority to expedite and monitor theproject
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The Balanced Matrix
An individual is selected who will manage the project across thevarious functional levels of the organization and who will interactwith the functional managers on an equal basis and jointlyapprove technical and operational decisions. The project manager
defines what needs to be accomplished and the functionalmanagers decide how it will be accomplished within the plan,various designated functional inputs, standards and schedulesestablished by the project manager
The Project Matrix
A project manager is selected to oversee the completion of theproject in the functional levels of the organization. He or she isultimately is responsible for
Projects & Organizations Environment (2)
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the projects completion, has final say on major project decisions
and controls most aspects of the project, including the assignmentof functional personell, what they do and when. The functional
managers maintain title over their respective personell and have
consultation rights
The (dedicated) Project Team
A project manager is selected to head a core group of personelfrom several functional units of the organization and who are allassigned to work full-time on the project in question
Projects & Organizations Environment (3)
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Project Coordination
Example of a Typical Functional Organization
Corporation X
Human
Resources
Marketing Engineering ProcurementManufacturing
Electronics
Engineering
Customer
Service
Finance &
Administration
Software
Engineering
Mechanical
EngineeringDesign Purchasing
Receiving
& Inspection
Domestic
Sales
International
Sales
Fabrica-
tionAssembly Testing
Production
Scheduling
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Advantages of the Functional Approach
No major alteration in the enterprises existing organizationalstructure is necessary as functional units are already established
Flexibility in assigning personell in different functional units andwithin one functional unit - to work on projects
Focussed utilisation of expertise by a functional unit if the projectscope is narrow
Maintainence of normal career paths in a functional division or inthe divisions where the specialists working on a project are based
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Disadvantages of the Functional Approach
If a project has a comparatively broad scope, the functional unitsmay have different priority perceptions
Inadequate integration across functional units because functionalspecialists may be concerned primarily with their specific part ofthe project work and not the whole project
Project completion times tend to be higher due to therequirement of channeling project information and decision-making through the normal management channels. Also, thelack of horizontal communication may lead to rework as actionsperformed may require correction
Weak motivation of the functional personell working on projects.Projects may be viewed as additional burdens not directly linkedto professional development or advancement.
Lack of identification with, and committment to the project
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Example of a Dedicated Project Team
Corporation X
Human
Resources
Marketing Engineering ProcurementManufacturing
Finance &
Administration
Project Manager
Project Team
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Advantages of the Dedicated Approach
No structural impact on the functional organization onlytemporary siphoning away of functional specialists
Project completion time is comparatively smaller due to projectpersonel devoting their efforts to the project in question full-time
and also because the flow of information and decision-making isgenerally not hindered by hierachies
Motivation, feeling of identification and cohesiveness are strongin the project. Project personell share a common goal and have a
collective responsibility towards ensuring realization of this goal
Cross-functional cooperation is strongly encouraged and promoted
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Disadvantages of the Dedicated Approach
Larger expense is involved because resources are assigned to the
project on a full-time basis. Across projects, this may result in aduplication of infrastructure and work
Projectitis project personell evolve a collective identityencapsulating themselves from the enterprise, giving rise to a non-constructive us (project personell) and them (rest of theenterprise) outlook. In some cases this not only undermines the
integration of the project effort back into mainstream operationsbut also the subsequent assimilation of project personell back intotheir respective functional units
The project may become overdependent on the gamut of skills,expertise and experience held by the project personel and may notseek to incorporate skills, expertise and experience held by
individuals and organizational entities outside the project
Assimilation of project personel back into their respective functional unitsmay prove difficult due to their prolonged absence from their units and thechallenge of keeping up with the developments which have taken place inthe functional units during the project period
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ProjectCoordination
The Projecticized Organization
Chief Executive
Project
Manager
Project
Manager
Project
Manager
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
ProjectCoordination
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Example of a Projecticized Organization
Corporation X
MarketingHuman
Resources
Finance and
Administration
Legal
Project Manager
(Project A)
Project Manager
(Project B)
Engineering Manufacturing Procurement Engineering Subcontractors(X, Y, Z)
Manufacturing Procurement
Other
Projects
Other
Projects
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The Functional Matrix Organization
Chief Executive
Functional
Manager
Functional
Manager
Functional
Manager
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Project
Coord.ProjectCoord.
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The Balanced Matrix Organization
Chief Executive
Functional
Manager
Functional
Manager
Functional
Manager
Staff
Staff
Staff
Staff
Staff
Staff
Staff
StaffProject Manager
ProjectCoord.
ProjectCoord.
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Project
Coordination
The Strong Matrix Organization
Chief Executive
Functional
Manager
Functional
Manager
Functional
Manager
Staff
Staff
Staff
Staff
Staff
Staff
Staff
StaffStaff
Manager of
Project Managers
Project
Manager
Project
Manager
Project
Manager
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The Project Matrix Orgaization Form
General Manager
Lead Project
Manager
Functional
Manager A
Functional
Manager B
Functional
Manager C
ProjectManager 1
Project
Manager 2
ProjectManager 3
Project
Manager 4
FI
FI
FI
FI
FI
FI
FI
FI
FI
FI
FI
FI
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Example of a Project Matrix Organization
General Manager
Lead Project
ManagerENGINEERING MANUFACTURING MARKETING
PM X
PA E1 E2 E3 MA1 MA2 MA3 M1 M2 M3
PM Y
PM Z
1 2 1 3 2 1
1 3 1 4 0,5 1
0,5 1 2 0,5
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Advantages of the Matrix Organization
Sharing of resources across multiple projects and within functionaldivisions, enabling functional personell to divide their attentionacross multiple projects and reducing duplication of resourceswhich is observed in dedicated project teams
Stronger project focus by having a project manager who performsa coordinating and integrating role across functional units, andthereby enabling a more holistic approach to problem-solving thanis normally possible in the purely functional environment
Flexible use of the enterprises resources and expertise
Accessibility of the entire spectrum of the functionalenvironments technology, expertise and experience
Functional personell maintain close ties with their respective units
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Disadvantages of the Matrix Organization
Violation of the established hierarchical principle unity of
command and stress arising from issuance of diverging orconflicting orders
Conflict potential between project managers and functionalmanagers can be high due to diverging agendas, unclear patternsof authority, accountability etc., occasionally engendering apersonal animosity
Unhealthy resource-sharing competition over equipment, expertsetc. may arise between project managers who each areendeavouring to acquire what they consider as being best for their
respective project(s)
Difficulty facing project managers in getting agreements acrossfunctional delineations
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Characteristics of a Weak Matrix
Organization (1)
Failure to understand the key principles and roles in the matrixorganizational environment
Distrust in organizational forms which are not based on Fayolsunity of command
Apprehensions of functional managers over the apparentsuperority of the project goals over those of the functional entity
Senior management shortcomings in terms of clearly delineatingin writing the formal and reciprocal roles of all the key managers
involved in the project
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Lacking understanding by the project team to understand the roleand responsibilities of the functional professionals and theirmanagers
Incompetent project and functional managers / project managerswho manage less and coordinate more / decision referal byproject managers to senior management
Inadequate stakeholder management
Lack of trust, integrity, loyalty and committment by project team
members
Characteristics of a Weak Matrix
Organization (2)
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Prerequisites for a Successful Matrix
Organization Appropriate empowerment for dedicated project managers,
unambiguous role definition and clear patterns of leadership,responsibility and accountability
Prevalence of well-established lines of communication and broadendorsement of free communication throughout the enterprise,especially in regard to projects and project stakeholders
Explicit understanding of the interdependant roles of bothfunctional as well as project managers regarding pursuit ofprojects
Functional managers endorse and are committed to the matrixorganizational design and the corresponding allocation offunctional resources for projects
Prevalence of an organizational culture that encourages and
supports the matrix organizational form
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Org. Structure
Project
Characteristics
Functional
Matrix
Weak Balanced Strong Projecti-
cized
ProjectManagers
Authority
Little orNone
Limited Low toModerate
Moderate toHigh
High toAlmost Total
Resource
Availability
Little or
None
Limited Low to
Moderate
Low to
Moderate
High to
Almost Total
Who Controls
Project Budget
FunctionalManager
FunctionalManager
Mixed ProjectManager
ProjectManager
Project
Managers Role
Part-Time Part-Time Full-Time Full-Time Full-Time
ProjectManagementAdministrativeStaff
Part-Time Part-Time Part-Time Full-Time Full-Time
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Factors Influencing the Project
Management Organizational Environment
The projects size
The projects strategic importance
The projects innovation requirement
The projects level of required integration across functionaldelineations
The project environments complexity
The project budget and time constraints
The project resource requirement level of stability
In general the higher the level of these factors, the greater is the
requirement of autonomy and authority for the project manager and
his team in order to ensure Success (project matrix or dedicated
project team)
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Empirical Assessment of the Respective
Project Organization Forms
Empirical research suggests that the Project Matrix and Project
organization modes are the most effective means of undertaking
projects
Functional
Organization
Functional
Matrix
Balanced
Matrix
Project
Matrix
Project
Organizaton
Very
Ineffective
Ineffective
Effective
Very
Effective
Construction
New Product
Clifford F. Gray / Erik W. Larson, Project Management: The Managerial Process, 2. ed., 2003, p. 71