Project Management Project Organization Jiwei Ma

Project Management

Project Organization

Jiwei Ma

Content

Introduction Organization theory Basic organization types Project organization and project Project team building

Introduction

Project organization is the foundation of project management

Project objective is decisive to project organization

Project organization is designed mainly to carry out project controlling

Project Objective and Project Organization

Objective

Organization

Production methods and

tools

Management methods and

tools

Production personnel

Management personnel

People

Methods &

Tools

Organization Model

ORGCulture

Socialstructure

PhysicalStructure

Technology

Environment

Organization Theory Organization theory studies,

The structural components of a system Organization structure Task breakdown and responsibility

definition Management functionalities arrangement

The mechanism and procedure of a system The mechanism of material flow The mechanism of information flow

Development of Organization Theory

Adam Smith efficiency on division of labor social structure

of organization Karl Marx

Relationships between the organization and individuals, fundamental antagonism between labor and the interests of capital

Emile Durkheim increasing specialization, hierarchy,

interdependence of work tasks formal and informal aspects of organization

tension between economic and human aspects


Max Weber bureaucracy is objective and impersonal benefits of

rationality (formal authority) types of social action: formal rationality, substantive

rationality, affectional, traditional three types of legitimate ’Herrschaft’: rational,

traditional, charismatic Fredrick Winslow Taylor

Scientific Management: method to discover the most efficient working techniques for manual forms of labor

close supervision of highly specified physical work managerial control


Henry Fayol universal principles for the rational

administration of organizational activities principles: span-of-control, exceptions,

departmentation, unity-of-command, hierarchy esprit de corps: unity of sentiment and harmony

contribute to the functioning of an organization functions of manager: planning, organizing,

command, coordination, control

Classical Organization Theory

The classical organization theory is focused on the mechanism of power, authority, and control

Three types of organizations Charismatic authority

Based on the sacred or outstanding characteristic of the individual

Traditional authority Essentially a respect for custom

Rational legal authority Based on code or set of rules

The last one was regarded as the predominant form of organization


Bureaucracy is the most efficient form of organization A legal code shall be established for all members

to obey The code form a system of abstract rules, and

administration looks after the interest of the organization within the limit of this system

The person exercising authority also obeys this impersonal order

Only through being a member does the member obey the law

Obedience is due not to the person who holds the authority but to the impersonal order which has granted him this position


The theory is based on the assumption of formal and total rationality

Isolated from the environment The primary concern of the theory is

the behaving mechanism to avoid corruption, unfairness, and nepotism within the organization

instead of the slow, rigid and inefficient bureaucracy

Organization Theory - Modified

The modified organization theory has less idealistic assumption and established organization control principles with more practical realism

Principles Division of work - Repetition of the same

function brings speed and accuracy. Thus work should be divided according to skill and technical expertise

Authority and responsibility - Authority is linked to responsibility, and together require increasing judgment and morality at senior levels


Principles Discipline – essential for the smooth running of an

organization Unity of command – an employee should receive

orders from one superior only Unity of direction – One and one plan for a group

having the same objective Remuneration of personnel

Assure fairness Encourage keenness by rewarding well-directed

effort Avoid over-payment beyond reasonable limits


Principles Equity – employees must be treated equally and fairly Stability of tenure of personnel – a period of stability

will help employees to delivery their best Esprit de corps – dividing one’s own team is a grave

sin against the business Provide a key to modern organization and

possible approach to current organizational solutions

Unable to explain many modern practices contradictory to the principles due to the limits

Organization Structure

Hierarchical organization

Functional organization

Project organization

Matrix organization

… …

Hierarchical Organization

A

B1 B2 B3

C22C21 C23. . .. . . . . .. . .

Example: ArmyDivision

Brigade Brigade Brigade

…… ……Regiment RegimentRegiment Regiment…… Regiment ……

Battalion

Battalion

Battalion

Battalion

Battalion

Battalion

Battalion

Battalion

Battalion

Com

pany

Com

pany

Com

pany

Functional Organization

A

B1 B2 B3

C5 C6. . . . . .

Example: Typical Functional Organization in Manufacturing Industry

General ManagerGeneral Manager

Sales/MarketingProductionR&D Accounting Human Resource

Marketing VP Engineering VP Production VP Supply VP

President

Accounting VPHR VP

Custom

er Service Mng

Dom

estic Sales Mng

I/E M

ng

Manufacturing M

ng

Assem

bly Mng

Testing/Inspct. M

ng

Production P

lanning Mng

Transportation M

ng

System E

ng. Mng

Electronic E

ng. Mng

Software E

ng. Mng

Mechanical E

ng. Mng

Technical B

ooking Mng

Purchasing M

ng

Inspection Mng

Example: Modified Functional Organization

Functional Organization Advantages

Emphasis of specialization and opportunities for

employees to obtain professional training and

advances

Promotion opportunity for professionals

Professionals can work for different project at same

time

Functional department can be the basis of technical

continuity and sustainability

Stability of tenure of professionals

Functional Organization Disadvantages

Instead of customers, functional activities become the focus of departments

It’s difficult to find a fully responsible person for a problem or fault

Slow and hindered reaction to customer’s requirement due to multi-layer and multi-branch management structure

Negligence of the needs of project and individuals working on project

Difficult for cross-department coordination due to communication and information exchange barriers, which is critical to the complex project

Example: Project Organization


MarketingProduction Accounting Human ResourceR&DProject Manager

A Project Manager B Project Manager

R&

D

Production

Sales

Accounting

HR

R&

D

Production

Sales

Accounting

HR

Example: Project Organization

Ajax Express Company President

En

gineerin

g Man

ager

Man

ufactu

ring M

anager

Su

pp

ly Man

ager

Con

sultan

t

En

gineerin

g Man

ager

Man

ufactu

ring M

anager

Su

pp

ly Man

ager

Su

bcon

tractor

A Project Manager B Project Manager

Marketing VP

Accounting VP

Human Resource VP

Legal Department VP

Project Organization

Advantages Project manager is fully responsible for the project

and directly report to senior management level Members of project team report to project manager Separation of project from functional department

makes communication simple and easy Unity of direction enables project teams to

concentrate on project objective Centralization of management expedites the

decision making process and enable an fast reaction Unity of command

Project Organization Disadvantages

Duplication of resource input when there are more than one project

Waste of critical resources due to project manager’s preparatory inventory

Inconsistency in company’s regulatory management

Difficulty for communication and information exchange

Lack of stability of tenure and continuity of professional career for employees

Matrix Organization

A

X1 X2 X3

Y1

Y2

Y3

Example: Matrix Organization


MarketingProduction Accounting HRR&DProject Mng.

A Proj. Mng

B Proj. Mng

C Proj. Mng

Example: Matrix Organization

Ajax Express Company President

Marketing VP

Accounting VP

HR VP

Legal Dept. VP

Project VP Engineering VP Manufacturing VP Logistics VP

A ProjectManager

B ProjectManager

C ProjectManager

PM System Electronic Software MechanicalTechnicalBooking

AssemblyInspection& Testing

Production Installation Training

Jack

Beth

Jack

Jim

Jeff

Joe

Julie

Maggie

Cattry

Jen

Cathy Rose

Steve

Rose

Dennis

Jessi

Chris

Chris

Sharon

Katie

Katie

Tyler

Gerri Wendy

Hanna

Paul

Multi-level Matrix OrganizationMulti-level Matrix Organization

AA

Y1Y1

Y2Y2

Y3Y3

X1X1 X2X2 X3X3

Y1X1 Y1X2

Y!Y1

Y!Y2

Y2X1 Y2X2

Y2Y1

Y2Y2

AAX YX Y

YX YY

Matrix Organization Advantages

Most of works center around project Different projects can share the expertise of

various functional departments Project team member has a strong connection to

project, while still maintains a sense of belonging Fast reaction to both internal and external

requirement Part of project team members are from

administrative department, it helps to maintain the consistency in regulatory management

Easy to maintain the balance of resource input among different project

Matrix Organization

Disadvantages Lack of the unity of command Project manager will concentrate on project

objective, instead of company’s objective It’s difficult to allocate resources and easy to

invoke dispute between project managers High demand on the coordination between

project manager and functional department manager

Comparison of Various Organization Structures

FunctionalMatrix

ProjectLight-weight

Balanced Heavy-weight

Project manager’s power

Few or none

Limited middle Strong Fully authorized

Percentage of full time members

None 0 – 25% 15 – 60% 50 – 95% 85 – 100%

Project manager position

Part-time Part-time Full-time Full-time Full-time

Title for project manager

Project Coordinato

r

Project Coordinato

r

Project Manager

Project Manager

Project Manager

Project administrative personnel

Part-time Part-time Part-time Full-time Full-time

Project Organization Case An office building is fully invested by public fund and will be

used by a governmental institute. This institute does not have construction specialist or a team

to manage the project, so it’s decided to hire a consulting company to manage the project under an owner’s representative.

The owner’s representative, reporting to the director of this governmental institute, will be fully responsible for all of the project issues.

Any decision regarding major functionality and project implementation of this office building will be made by top management level of this institute, and than carried out by the owner’s representative.

It is also required by law to hire a certified consulting company to deal with project procurement, and a site supervising company to monitor the construction procedure.

Project Organization Case A state owned company decided to expand its production

capacity by building a new facility. This company has a maintenance team with mechanical,

electrical, and production equipment engineers. The top management level assigned an owner’s

representative to be responsible for all the project issues, who will directly report to the president of the company.

A decision-making committee has been established to monitor the project and support the president regarding critical decision making procedure.

The company decided to hire a consulting company to provide project management consulting service to the owner’s representative and owner’s project engineers.

It is also required by law to hire a certified consulting company to deal with project procurement, and a site supervising company to monitor the construction procedure.

Project Organization Case A foreign invested joint-venture is going to build an

industrial facility in China. This company has a maintenance team with mechanical,

electrical, and production equipment engineers. The company has set up a project engineering department

to deal with project engineering issues. The director of the project engineering department will be

reporting to the chief operating officer of the company. Other functional departments of the company such as

purchasing, accounting, etc. will also be involved in certain project issues.

A consulting team has been hired as a part of the project engineering department to deal with project management issues as well as certain technical issues during design and construction procedure.

A site supervising company has also been hired to monitor the construction procedure.

Team Building

Basic Concept Types of Team Rules of a Team Steps to Build a Team Team Effectiveness

Team Building Basic Concept

A team is a group of people working towards a common goal

Every team member has his/her own goals in a hierarchy system that conform to the common goal

A team may be a formal organization or an informal workgroup

Team building is the process of enabling that group of people to reach their goal

Types of Team – in Size

Types of Team – in SizeType of Team

BuildingScale Key Factors

Individual 1 person Individual skills and perceptions

Small Team 2-12 people Relationships between people

Team Island 2 or more teams

Relationships between teams

Organization 15+ people The culture of the organization

Team Building Rules of a Team

Purpose: Members share the vision and the sense of the mission

Priorities: Members know what needs to done next, by whom, and by when

Roles: Every member know his own role Decisions: Authority and decision making lines are

clearly understood Conflict: Conflict is dealt openly and is considered

important issues Personal traits: members feel their unique

personalities are appreciated and well utilized.

Team Building Rules of a Team

Norms: Group norms for working together are well established and observed.

Effectiveness: Members find team meetings efficient and productive.

Success: Members share the clear view of the team’s success and the sense of accomplishment.

Training: Opportunities for updating skills are provided and taken advantage of by team members.

Team Building

Steps to Build a Team Forming Storming Norming Performing Adjourning

Steps to Build a Team Forming

Personal relations are characterized by dependence Members have a desire for acceptance by the group Members behave to keep things simple and to avoid

controversy Serious topics and feelings are avoided Discussion centers around orientation to tasks and

one another To advance to next step, members have to risk

discussions beyond non-threatening topics with possible conflict

Steps to Build a Team Storming

Characterized by competition, conflict in personal relations and organization of tasks/functions

Conflicts arise when members are organized for tasks and structured for function

Individuals have to bend to suit the group organization

There will be questions over leadership, structure, power, and authority

To advance to the next step, members have to move from a “testing and proving” mentality to a problem-solving mentality

Steps to Build a Team Norming

Characterized by cohesion and recognition Members are willing to change and mold their

feelings, ideas, attitudes, and beliefs Leadership is shared and cliques dissolve with

more and more sense of group belonging Data flow between group members increases

and creativity is high Interactions between members are characterized

by openness and sharing of information

Steps to Build a Team Performing

Not reached by all groups Characterized by interdependence in personal

relations and efficiency of problem solving Members can work independently, in subgroups,

or as a total unit with equal performance Roles and authorities can dynamically adjust to

the changing needs of the group and individuals Members are both highly task and people

oriented Group morale is high and group loyalty is intense

Steps to Build a Team

Adjourning Characterized by termination of task

behavior and disengagement from relationships

There will be a recognition for participation and achievement

There might be a sense of fear due to the feeling of giving up control and inclusion in the group

Team Building Team Effectiveness

Team goals are development through team interaction and by members’ willingness

Participation of team members is high Feedback is asked openly and given freely

with a desire to help Decision making is participated actively

by all members Leadership is distributed and shared

among team members

Team Building Team Effectiveness

Problem solving becomes the focal point of team work

Conflict is not suppressed, but openly dealt and managed among team members in order to improve team performance

Team member resources (talents, skills, knowledge, and experiences) are fully identified, recognized, and utilized whenever appropriate.

Risk taking and creativity are encouraged, while mistakes are treated as a source of learning rather than reasons for punishment

Team Building Team Leader

To put forward exciting vision with team members and keep it in front of the team

To help the team develop principles, including norms, success criteria, performance quality standards, and reward system

To facilitate communication and information exchange within the team

To tolerate failure To accept group decision even with personal

disagreement when needed To act as interface and buffer between team and

rest of the world

Team Building Team Member

To take responsibility To be positive in determining team

principles To have a positive attitude toward any

changes To accomplish tasks with a strong feeling

of control To make kind and constructive criticism Don’t have to be a good friend, but need

to be a good teammate

Thank You

Jiwei Ma

[email protected]

Documents

Project Management Project Organization Jiwei Ma