project organisation year 3 project management dr. margaret nelson
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PROJECT ORGANISATIONPROJECT ORGANISATION
Year 3 Project ManagementYear 3 Project Management
Dr. Margaret NelsonDr. Margaret Nelson
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
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
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
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)
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
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
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
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
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