INEN261: Chapter # 5 The Project and the Organizational Structure

INEN261: Chapter # 5

The Project and the Organizational Structure

Presented by:Jasim Alnahas

Chapter Learning OutcomesIf you complete the given assignments for this chapter you will:

Understand Organizational structures and how they vary between different institutions

Understand the importance of project organization and its impact on project success and the activities of the Project Manager

Understand how effective project managers build a strong project team

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Lets move beyond the Project Manager to the organization of the project Organization must be discussed at two levels

How is the Project Team organized to accomplish the project work?

How does the Project Team fit within the overall organization of the enterprise (or enterprises)

We will start with fitting the team into the overall organization

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Traditional Forms of Organization1. Functional2. Projectized3. Matrix4. Composite

Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012 5-4

Think of enterprise organizational structure as fitting somewhere within a continuous spectrum with two endpoints: A purely functional organization A purely “projectized” organization

A “pure” organization of either extreme rarely exists.

PurelyFunctional

PurelyProjectized

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Projects in a Functional Organization

Make it a part of one of the functional divisions More than one choice may exist If support from other areas is needed, they are

expected to help support the project Another way is to assign the work to all

divisions with the top management overseeing the effort

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The functional (classical) organization

F in an c ia l

M an u fac tu rin g M ateria ls S u p p ly

P ack in g S h ip p in g

S h ip p in g

O p era tion s E n g in eerin g M ark e tin g A d m in is tra tion

E xec u tive O ffice

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Engineering organizations (can also be purely functional)

Financial Operations

ElectricalDepartm ent

M echanicalDepartm ent

CivilDepartm ent

Engineering M arketing Adm inistration

Executive Office

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Advantages Maximum flexibility in the use of staff Experts can be utilized by many different

projects Specialists can be grouped to share

knowledge and experience Functional division serves as a base of

technological continuity Functional division contains the normal path

of advancement


Disadvantages Client is not the focus of the activity Functional units tend to be oriented toward the

activities of that particular function No individual is given full responsibility Response to client needs is slow and arduous Tendency to suboptimize the project Motivation tends to be weak A holistic approach to the project is not

facilitated


At the other end of the spectrum is the pure “Projectized” organization

FinanceLegal

Other Support

Dedicated Project Team A

Project AProject (or Product)

M anager

Dedicated Project Team B

Project BProject (or Product)

M anager

Dedicated Project T eam C

Project CProject (or Product)

M anager

Executive Office

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In most cases project teams are composed of team members selected from different functions and from different levels, because it is thought the team can solve a problem Management Gaps

Functional Gaps

ProjectTeam

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In the “projectized” organization, putting a ring around the team is fairly easy

FinanceLegal

Other Support

Dedicated Project Team A

Project AProject (or Product)

M anager

Dedicated Project Team B

Project BProject (or Product)

M anager

Dedicated Project Team C

Project CProject (or Product)

M anager

Executive Office

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Advantages Project manager has full authority All members report to the project manager Short lines of communication When there are similar projects, expertise can

be retained Strong and separate identity Swift decisions Unity of command Structurally simple and flexible Supports a holistic approach


Disadvantages

Duplication in staffing Stockpiling Workers tend to fall behind in other areas of

their technical expertise Inconsistency in policies and procedures A project takes on a life of its own Worry about life after the project is over


But with the functional organization the project team spans functional and management gaps

Financial Operations

ElectricalDepartm ent

M echanicalDepartm ent

CivilDepartm ent

Engineering M arketing Adm inistration

Executive Office

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Successful projects within a functional organization are difficult No one individual responsible and no

customer focus Project tasks are lower priority than functional

tasks Coordination across the gaps is tough Projects are completed slowly Solutions are functionally oriented

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But there are some advantages of housing Project in a functional organization 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

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Various strategies for project execution improvement evolved to mitigate these problems

Rules of engagement (policies, rules, procedures) The well known “Five Stages” of a Project (later) Project leaders

Temporary project leaders within functional departments Task forces

Full and part time project staff commitments Department leaders as Task Force Leaders

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Five Stages of a Project: Stage 1 – We are told to proceed with the project! Excitement and

euphoria We got the job!!!

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Stage 2: Realization of the enormity of the project sets in Disenchantment

We actually have to do what we said we could do!

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Stage 3: Something is bound to go wrong Search for the guilty

Why did this turn into such a mess?

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Stage 4: There have to be consequences when things go wrong Punishment of the

innocent You can bet it is not the

boss.

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Stage 5: Somehow, finally you reach the completion of the project Distinction and rewards

for the uninvolved and undeserving

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A late stage of the evolution toward the “Projectized” organization results in the Matrix Organization

F u n c tion A F u n c tion B F u n c tion C

G en era l M an ag er

PMgr X

PMgr Y

PMgr Z

Project Responsibility

Functi ona lR

es po nsi bi li ty

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A variation of the matrix with a manager of project managers

E lec trica l E n g r C ivil E n g r M ech an ica l E n g r

S r V P o f E n g r

PMgr X

PMgr Y

PMgr Z

VP Projects

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Strong Matrix

Figure 5-3


Weak Matrix

Project might have only one full-time person, the project manager

Functional departments devote capacity to the project

Primary task of the project manager is to coordinate project activities carried out by the functional departments


Why a Matrix organization for projects? Gives projects “status” within the organization. The

PM has some authority. Project processes and procedures can be

customized to fit the project Project staff can be shared between projects and

have a home at the end of the project assignment. Attempts to get the best of both organizational

extremes

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Advantages

The project is the point of emphasis The project has access to the entire

organization for labor and technology Less anxiety about what happens when the

project is completed Response to client needs is rapid Access to administrative units of firm Better balance of resources Great deal of organizational flexibility


Disadvantages

Power balance is delicate Projects compete for resources Projectitis is still a serious disease Division of authority and responsibility is

complex Matrix management violates the

management principle of unity of command


Virtual Projects

Project team crosses time, space, organizational, or cultural boundaries

Facilitated by the use of the Internet Often organized as a matrix


Virtual Project Rules

Challenging and interesting projects Use volunteers Include few people who know each other Create an online resource to learn about

each another Encourage frequent communication Divide work into independent modules


What is the “Best” organization for accomplishing successful projects? There is no universal best. Only best for your

organization. And even that “best” is temporary. It depends:

Project size Project length Experience with PM organization Upper mgt. philosophy and experience Project location Resource availability Other factors

But Project Work is not the only work to be done

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How do we organize the Project? Typical Project Organizational Components

Project Manager Assistant Project Manager Project Office Project Team

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The Project Organization Chart

A ss is tan t P ro jec t M an ag er(C an a lso b e in lin e p os it ion )

P ro jec t O ffic e S ta ff(C lerica l)

(B illin g /A c cou n tin g )(D oc u m en t C on tro l)

P ro jec t Team M em b er A(O r Team L ead er A )

P ro jec t Team M em b er B(O r Team L ead er B )

P ro jec t Team M em b er C(O r Team L ead er C )

P ro jec t M an ag er

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The Project Office vs. the Project Team

A ss is tan t P ro jec t M an ag er(C an a lso b e in lin e p os it ion )

P ro jec t O ffice S ta ff(C le rica l)

(B illin g /A ccou n tin g )(D ocu m en t C on tro l)

P ro jec t Team M em b er A(O r Team L ead er A )

P ro jec t Team M em b er B(O r Team L ead er B )

P ro jec t Team M em b er C(O r Team L ead er C )

P ro jec t M an ag er

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Project Office vs. Project Team The project office staff typically are assigned

full time and provide functional support to the project

The project team are chosen for their technical expertise and generally contribute to a variety of projects

I will generally not differentiate between full and part time project assignments

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Selecting the Project Team Typically a joint responsibility of the Project Manager

and the functional manager Based on the work breakdown structure (WBS) which

defines the work to be accomplished Skills requirements for tasks are assessed and similar

skills are aggregated to determine overall project needs

From this baseline, the functional departments are contacted to locate individuals who can meet these needs

Negotiations ensue

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Staffing a project (determining the people resource) is a balancing act The PM wants to choose the very best from

throughout the organization The general management or functional managers

want to assign staff to satisfy their own, sometimes different organizational objectives Utilization Human resource growth Availability Others?

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The Project Office

Dedicated to the project Usually solid line reported to the PM Often located in project space Can provide both project management and

functional support Assistant or “section” managers responsible for managing

bid packages or major subsystems Billing, record keeping, communications, IT, even HR

support

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Assigning people (even the right ones) to the project does not assure success “Managers are needed to convert disorganized

resources of people, machines, and money into a useful enterprise.” (Newman & Warren, The Process of Management)

What you have at the outset is disorganization The conversion process requires building a high

performing team of project participants

This is not always easy – people are involved

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Assignment to a project means change Change brings on anxiety Anxiety creates barriers to effective teamwork Without effective teamwork among the project staff it

is unlikely that the project will be successful Creating a TEAM within the temporary

organizational structure of a project is an early Project Management responsibility

Effective PM’s realize that they have to do something to build (and maintain) teamwork.

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Building a Team: The PM and the Team need to get to know one another PM/Individual meetings to discuss

Project objectives Who will be involved and why The importance of the Project Why you are involved Rewards/incentives for excellent performance Problems/constraints/challenges of the project Rules of the Project Road Suggestions for improvement Professional development agendas The necessity for teamwork

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Building a Team: The team members must get to know each other Project Kickoff meetings or events (with the staff

although client customer meetings are important too) Project administration Project scope Project schedule Project budget Project deliverables Client/customer desires or special needs

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Barriers to effective teams and tips for overcoming them (1) Differing outlooks, priorities, judgments

Smoke them out early Clarify responsibilities and project priorities Align individual interests with project duties

Role conflicts Ask people to define their role in their terms Correct or reassign as necessary Communicate roles and role changes continuously

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Barriers to effective teams and tips for overcoming them (2) Project objectives not clear

Clarify (Internally and Externally) Communicate (I and E)

Continual change (the moving target) Try to slow or stop the target with the client Plan for multiple environments/contingency plans

Team leadership competition Clarification from above Demonstrate the right to lead (win the competition)

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Barriers to effective teams and tips for overcoming them (3) Lack of team definition and structure

Draw the org chart Reinforce with team meetings Specialized communication mediums

People don’t want to work on the project or aren’t committed Find out why Explain advantages in personal terms Ask functional manager to explain Find new staff

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Barriers to effective teams and tips for overcoming them (4) Credibility of Project Manager

Demonstrate top management support for you in this role

Seek functional manager’s support and confidence Earn respect via sound decisions, hard and smart

work Sometimes replacing a single team member removes

the doubt

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Barriers to effective teams and tips for overcoming them (5) Communication problems

Over communicate Written One on one Meetings

Involve clients and top management Lack of upper management support

Bring them into the tent Project reviews Client reviews

Kill the project or find another job

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Management of the Team to a successful conclusion Management involves:

1. Planning2. Organizing3. Staffing4. Controlling5. Directing

The first 3 are obvious. The last two may need some definition.

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Controlling in a management sense is similar to controlling in a systems engineering sense

Systems Control Sensory Device Control Device Activating Device

Management Control Measuring Evaluating Correcting

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Directing involves implementing through others to get the project completed Includes steps to:

Staff Train Supervise Delegate Motivate Counsel Coordinate

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There are very different thoughts on human behavior that may govern how Project Managers control and direct the team Theory X: The project team is composed of people

who are inherently lazy and require supervision Theory Y: The project team is composed of people

who want to get the job done and will do so without constant supervision

Effective PM’s will use a variety of approaches to direct different team members

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Summary of Chapter 5

Organizational structures vary between different institutions How the project organization is overlaid onto the overall

organization can impact the chances of project success and the activities of the Project Manager

Generally organizations are moving toward a more project friendly organization as project success becomes more critical for organizational success

Acquiring adequate project staff can require negotiation The effective project manager will develop a strong team among

the project staff

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Next week Chapters 4 and 8

Negotiations and scheduling Assignment 2 is due early next week (see course

calendar). Project Staffing Requirements

What types of people are needed for the work? (Disciplines/skills and numbers)

How will they be organized? (Project organization chart(s) Other Resources that are needed

Equipment, Space, Subcontractors etc. Team Project Status Presentations is due next

week. You need to send me your professional presentation.

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Documents

INEN261: Chapter # 5 The Project and the Organizational Structure