Project Management: A
Managerial Approach
Chapter 4 – Project Organization
1
Overview
• Project “Fit” in Organizations
• Types of Organizations
• The Project Management Office (PMO)
• Project Teams
2
Growth of Project Oriented
Organizations
• There are many reasons for the rapid
growth, but most of them can be grouped
in four general areas:
– Speed and market responsiveness have
become absolute requirements for successful
competition
– The development of new products, processes,
or services regularly requires input from diverse
areas of specialized knowledge
3
Growth of Project Oriented
Organizations
• Four reasons for growth (cont.)
– Rapid expansion of technological possibilities in
almost every area of enterprise tends to
destabilize the structure of organizations
– A majority of senior managers rarely feel much
confidence in their understanding and control
of the activities in their areas
4
Types of Project Organizations
• There are two fundamentally different ways
of organizing projects within the parent
organization
– The project as part of the Functional
Organization
– The project as a free-standing part of the parent
organization
• A third type, called a Matrix Organization is a
hybrid of the two main types
• Each has advantages and disadvantages
5
The Project as Part of the
Functional Organization
• Advantages of using the functional elements of the
parent organization as the administrative home for a
project include:
– 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
– The functional division also serves as a base of technological
continuity when individuals choose to leave the project
– The functional division contains the normal path of
advancement for individuals whose expertise is in the
functional area
6
The Project as Part of the
Functional Organization
• There are also disadvantages to housing the project
in a functional area:
– The client is not the focus of activity and concern
– The functional division tends to be oriented toward the
activities particular to its function
– Occasionally, no individual is given full responsibility for
the project
– There are often several layers of management between
the project and the client
– There is a tendency to suboptimize the project
7
Pure Project Organization
• Advantages of a pure project organization:
– The project manager has full line authority over the
project
– All members of the project work force are directly
responsible to the project manager
– When the project is removed from the functional division,
the lines of communication are shortened
– When there are several successive projects of a similar
kind, the pure project organization can maintain a
permanent cadre of experts who develop skills in specific
technologies
8
Pure Project Organization
• Advantages of a pure project organization (cont.)
– A project team that has a strong and separate identity and
develops a high level of commitment from its members
– Because the authority is centralized, the ability to make a
swift decision is enhanced
– Unity of command exists
– Pure project organizations are structurally simple and
flexible, which makes them relatively easy to understand
and implement
– The organizational structure tends to support a holistic
approach to the project
9
Pure Project Organization
• Disadvantages of a pure project organization:
– Each project tends to be fully staffed which can lead to a
duplication of effort in every area from clerical staff to
technological support
– There is a need to ensure access to technological
knowledge and skills that results in an attempt by project
managers to stockpile equipment and technical assistance
– The functional division is a repository of technical lore, but
it is not readily accessible to team members of the pure
project team
10
Pure Project Organization
• Disadvantages of a pure project
organization (cont.)
– Pure project groups seem to foster inconsistency
in the way in which policies and procedures are
carried out
– In a pure project organization, the project takes
on a life of its own
– There tends to be concern among team members
about “life after the project ends” 11
Pure Project Organization
12
The Matrix Organization
• The matrix organization is a combination of
functional and pure project
– A matrix organization can take on a wide variety
of specific forms
• “Project” or “strong” matrix organization most
resembles the pure project organization
• The “coordination” or “functional” or “weak” matrix
most resembles the functional form
• The “balanced” matrix lies in between the others
13
The Matrix Organization
• Rather than being a stand alone organization,
like the pure project, the matrix project is not
separated from the parent organization:
14
The Matrix Organization
• As with other organizational forms, the
matrix organization has its own unique
advantages:
– The project is the point of emphasis
– Because the project is overlaid on the functional
divisions, the project has reasonable access to
the reservoir of technology in all areas
– There is less anxiety about what happens when
the project is completed
15
The Matrix Organization
• Advantages of a Matrix (cont.)
– Response to client’s needs is as rapid as in the pure
project organization
– Matrix management gives the project access to
representatives from the administrative units of the
parent firm
– The matrix organization allows a better companywide balance of resources to achieve goals
– There is a great deal of flexibility in precisely how
the project is organized within the matrix
16
The Matrix Organization
• There are also disadvantages to using the
matrix organization; most involve conflict
between the functional and project managers:
– The balance of power between the project and
functional areas is very delicate
– The movement of resources from project to
project may foster political infighting
– Problems associated with shutting down projects
can be as severe as in a pure project organization
17
The Matrix Organization
• Disadvantages of a Matrix (cont.)
– The division of authority and responsibility in a
matrix organization is complex, and uncomfortable
for the project manager.
– Matrix management violates the management
principle of unity of command. Project workers
have at least two bosses, their functional heads
and the project manager.
18
Mixed Organizational Systems
• Divisionalization is a means of dividing a large
organization into smaller more flexible units
• This enables the parent organization to
capture some of the advantages of small,
specialized organizational units while retaining
some of the advantages that come with larger
size units
19
Mixed Organizational Systems
• Pure functional and pure project organizations
may co-exist in a firm:
20
Mixed Organizational Systems
• Advantages of a mixed organization:
– The hybridization of the mixed form leads to flexibility
– The firm is able to meet special problems by appropriate
adaptation of its organizational structure
• Disadvantages include:
– Dissimilar groupings within the same accountability center
tend to encourage overlap, duplication, and friction
because of incompatibility of interests
– Conditions still exist that result in conflict between
functional and project managers
21
Staff Organization
22
Choosing an Organizational Form
• Selecting the organizational interface between the
project and the firm is a difficult task
– The choice is determined by the situation, but is also partly
intuitive
– Must consider the nature of the potential project, the
characteristics of the various organization options, the
advantages and disadvantages of each, the cultural
preferences of the parent organization, and then make the
best compromise that can be made
23
Choosing an Organizational Form
• Criteria for the selection of a project organization:
– 1. Define the project with a statement of the objective(s)
that identifies the major outcomes desired
– 2. Determine the key tasks associated with each objective
and locate the units in the parent organization that serve as
functional “homes” for these types of tasks
– 3. Arrange the key tasks by sequence and decompose them
into work packages
24
Choosing an Organizational Form
• Criteria for the selection of a project organization
(cont.):
– 4. Determine which organizational units are required to
carry out the work packages and which units will work
particularly closely with which others
– 5. List any special characteristics or assumptions
associated with the project
– 6. In light of items 1-5, and with full cognizance of the
pros and cons associated with each structural form,
choose a structure
25
The Project Team
• To staff a project, the project manager works from
a forecast of personnel needs over the life cycle of
the project
– A work breakdown structure (WBS) is prepared to
determine the exact nature of the tasks required to
complete the project
– Skills requirements for these tasks are assessed and like
skills are aggregated to determine work force needs
– From this base, the functional departments are contacted
to locate individuals who can meet these needs
– Certain tasks may be subcontracted
26
The Project Team
• There are some people who are more critical to
the project’s success than others and should
report directly to the project manager or the
project manager’s deputy:
– Senior project team members who will be having a
long-term relationship with the project
– Those with whom the project manager requires
continuous or close communication
– Those with rare skills necessary to project success
27
Human Factors and the Project
Team
• Meeting schedule and cost goals, without
compromising performance is a technical
problem, with a human dimension
– Project professionals tend to be perfectionists
– Pride in workmanship leads the team member to
improve (and thus change) the product
– These changes cause delays in the project
28
Human Factors and the Project
Team
• Inspiring Project Team Members:
– The project manager often has little control over the
economic rewards and promotions of project team
members, but this does not mean he/she cannot
facilitate team motivation
– How are technical employees motivated?
• Recognition
• Achievement
• The work itself
• Responsibility
• Advancement
• Learning new skills
29
Human Factors and the Project
Team
• Empowerment of project teams is also a
motivational factor:
1. It harnesses the ability of the team members to
manipulate tasks so that project objectives are met.
The team is encouraged to find better ways of doing
things
2. Professionals do not like being micromanaged.
Participative management does not tell them how to
work but, given a goal, allows them to design their own
methods
3. The team members know they are responsible and
accountable for achieving the project deliverables
30
Human Factors and the Project
Team
• Advantages of Empowerment (cont.):
4. There is a good chance that synergistic solutions
will result from team interaction
5. Team members get timely feedback on their
performance
6. The project manager is provided with a tool for
evaluating the team’s performance
31
Interpersonal Conflict
• The focus of conflict can often be related to the
stage in the project’s life cycle:
– When the project is first organized, priorities, procedures
and schedules all have roughly equal potential to cause
conflict
– During the buildup phase, priorities become significantly
more important than any other conflict factor
– In the main program phase schedules are the most
important cause of conflict followed by technical
disagreements
– At the project finish, meeting the schedule is the critical
issue
32
Interpersonal Conflict
• Conflict and the Project Manager
– Most of the conflict on project teams is the result of
individuals focusing on the project through the eyes of
their individual discipline or department
– Conflict avoiders do not make successful project
managers
– On occasion, compromise appears to be helpful, but
most often, gently confronting and resolving the conflict
is the method of choice, for a win-win situation
33
PLC and Conflict Intensity
34