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8-2
Organization Designs
• There are a number of options
• Project Managers need to understand
relative advantages and disadvantages
of each
Project Organization
Structure
organization a system to achieve goals
formal organization structure
informal structure
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Organization Structure
•
•
•
•
•
range of activities organization does
management hierarchy
j subdivisions
major
responsibilities & type of work for each subdivision
official lines of authority & communication
doesn’t show informal
organization
i ti structure
t t
tends
t d tto d
develop
l b
by fits
fit and
d starts
t t
in response to historical challenges
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Informal Organization
Informal organization is critical
(who knows who; who will work with who)
informal communication is:
sociallyy motivated
communicates quickly
g nor dependable
p
is not thorough
Project
P
j tM
Managementt should
h ld use good
d
features, mitigate bad
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Alternative Structures
Functional Organization
• there are a number of options
• best depends on goals, type of work, environment
integration by rules, procedures, coordinated plans,
budgets
Hieronymus Botch
CEO
• DIFFERENTIATION - organizational specialization
–
–
–
–
–
Bean Kounter
Accounting
functional
geographic
hi
product
customer
process
Silas Marner
Finance
Snidely Whiplash
Marketing
John Doe
Production
Atlanta
Siegfried Hill
MIS
Phoenix
Butte
works well in repetitive,
repetitive stable environments
the most prevalent form
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Geographic Differentiation
Standardized accounting and reporting procedures
Product Differentiation
If produce a variety of products.
Megaglomerate
Octopi
John McGraw
CEO
Dan McGann
St Louis
TV sales
Joe Kelley
Baltimore
Production
Telemarket
Production
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J. Ripper
Health Products
production
special order
Can tailor to unique requirements of locale
Often used with functional within regions
g
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Dr. Sweitzer
Tobacco
Cy Seymour
New York
marketing
A. Onassis
Tankers
J. Helms
Environmental
marketing
legal
Integration between subdivisions tends to be low
use standardized financial & reporting
p
g
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8 - 10
Customer Differentiation
Process Differentiation
some logical process basis for differentiation
If a particular customer very important
Gunn Runner
Overnight Delivery
George Patton
Military Sales
Che Guevera
covert sales
functions
geographic
Little 600 Consulting
Phyllis
y
Knight
g
A. Nobel
special ops
explosives
Customer
Contactor
Programming
Customer
Training
peace prizes
Integration level depends on interdependence of
products (usually low)
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Systems
Analysis
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need more integration,
integration as problem in one area
affects others; task forces, teams
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Project Environments
• traditional organizational design
– when change required, add layers of mgmt, rules
– less flexibility, slow
• Projects
complexity
uncertainty
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change
unpredictability
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Project Organizations
• need to be highly differentiated to meet variety of
problems
• need to be highly integrated to respond rapidly
• need to be highly flexible
• must integrate subunits through
horizontal relationships
• must have structures suited to unique
environments
i
t
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Comparison
project
g
manager
supreme
high ruler
big
boss
big
boss 2
another
one
little
boss 2
etc
rigid,
g clumsyy
•
•
•
•
•
•
staff
people
designer
folk
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facilitate communication,
reduce decisions referred up
Project
Traditional
little
boss
Integrators
customer
liaison
worker
bees
horizonal communication
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liaisons - link 2 groups
task forces - temporary grouping to solve problem
permanent teams - long term task force
project expediters or coordinators
project managers
matrix managers
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Pure Project Organizations
if high complexity, major resource
requirements, heavy stake outcome
PURE PROJECT organization appropriate
separate organization created for this goal
TYPES
PROJECT CENTER
STAND-ALONE PROJECT
PARTIAL PROJECT
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Project Center
linked to parent organization
draw resources & personnel as needed
EXAMPLES:
• General Motors task force to develop
suggestions for downsizing
• relocation operations
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Stand-Alone Project
Partial Project
newly created organization for this mission
draw from several organizations
project manager responsible for some activities
other activities (support-oriented) remain with
functional divisions
EXAMPLES:
• large-scale public works
• NASA space station development
• construction jjoint-ventures
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TYPICAL ARRANGEMENT
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Pure Project Disadvantages
cost in personnel (facility duplication)
lose training investment - no place else to
use key people
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Matrix Organization
if organization continually operates on a project
basis (and many MIS shops do)
need to be able to quickly create large project
groups
G id lik structure
Grid-like
t t off reporting
ti andd authority
th it
relationships overlaying traditional functional
organization
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Matrix Capabilities
Hybrid Forms
• functional part provides repository for
technical expertise and physical
resources
• when in functional home, workers keep
up professionally (train)
• functional homes a place to go when
project over (no new job search)
• Firms combine matrix, functional, project
features, custom design their own
g
organization
• COST CONTROL: functional worst
• SCHEDULE: project
j best,
b
f
functional
i l worst
• TECHNICAL: functional worst
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Project Risks
• If high technical risk
– give project manager more authority
– matrix better (more skills readily available)
• If high cost risk
– clear goals paramount
– give project manager high authority
– more planning,
planning monitoring,
monitoring control
• If high schedule risk
– more project manager experience, monitoring
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Matrix Problems
• must be reinforced by information systems and
behavior supporting two-dimensional information
p
g
flow,, dual reporting
“No Man Can Serve Two Masters!”
military
ili
principle
i i l off UNITY OF
COMMAND
• chaos, confusion more common
• often project manager tells you what to do
do, but your
raise comes from functional manager
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Other criteria
Criteria for Selection of Form
Type
t k force
task
f
team
Size
smallll to
t
medium
Duration
short
h t tto
medium
Complexity
l tto medium
low
di
project team
all
all
small to medium
multiple
project teams
medium
to large
all
medium to high
matrix
medium
to large
all
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• stake of the project
if high, matrix or pure give better control
• degree of technological uncertainty
if high certainty, task forces & teams
• criticalness of time & cost goals
if time & cost not major, task forces & teams
• project uniqueness
medium to high
g
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if unique,
q
partial or full p
p
project
j
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Project Office
support staff group reporting to project manager
• to coordinate efforts of
functional areas
subcontractors
• information center
• plans, directs, controls project activities
• links users
users, project teams
teams, top management
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Project Office Functions
•
•
•
•
•
planning & control
systems engineering
change management
contracting
financial control
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Summary
• organization structure is means to
achieve goals & respond to problems
• differentiation
• project organizations more flexible
• need to know criteria for appropriate
project organization structure
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