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Chapter Learning Outcomes If 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 5-2
Citation preview
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
5-2
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
5-5
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
Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012 5-9
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
Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012 5-10
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
5-13
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
Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012 5-14
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
Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012 5-15
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
Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012 5-27
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
Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012 5-28
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
Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012 5-30
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
Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012 5-31
Virtual Projects
Project team crosses time, space, organizational, or cultural boundaries
Facilitated by the use of the Internet Often organized as a matrix
Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012 5-32
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
Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition, Wiley & Sons Inc., 2012 5-33
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
5-55
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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