Chapter Ten

Project Organization and Management Study

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 10.1. 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
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

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10.2. Types of Project
Organizations
• There are two fundamentally different ways of organizing projects within
the parent organization
a) The project as part of the Functional Organization
b) The project as a free-standing part of the parent organization
c) Matrix Organization is a hybrid of the two main types
• Each has advantages and disadvantages

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a) 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

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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

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b) 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

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 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

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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

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 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”

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c) 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

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The Matrix Organization
• Rather than being a stand alone organization, like the pure project, the
matrix project is not separated from the parent organization:

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 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
• 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 company-wide balance of resources to
achieve goals
• There is a great deal of flexibility in precisely how the project is organized within
the matrix

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 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
• 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.

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 10.3. 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

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 Mixed Organizational
Systems
• Pure functional and pure project organizations may coexist in a firm

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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

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10.4. 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

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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 serves as functional “homes” for these types of tasks
3. Arrange the key tasks by sequence and decompose them into work packages
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

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 10.5. 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

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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

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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

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Human Factors and the Project Team
• Motivating 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 motivate members of the team
• How are technical employees motivated?
• Recognition
• Achievement
• The work itself
• Responsibility
• Advancement
• The chance to learn new skills

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 Human Factors and the Project Team
• Empowerment of project teams is also a motivational factor: therefore, the
advantages of empowerment includes:
1. It harnesses the ability of the team members 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
4. There is a good chance that synergistic solution will result from team interaction
5. Team members get timely feedback on their performance
6. The project manager is provided a tool for evaluating the team’s performance

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 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

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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

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 End of the Chapter
Thanks!

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