Ch4 Project Organization: "Organize - To Form Into An Association For A Common Purpose or Arrange Systematically"

Ch 4
Project Organization
Organize - to form into an
association for a common purpose
or arrange systematically
Chapter 4 Project Organizatio

n
Specialization of the human elements

Different types = functional, product
line, geographical location, production
process, type of customer, subsidiary
organization, time, vertical or
horizontal organization
How to tie project to the parent firm
How to organize the project itself
Chapter 4 Project Org
Project as Part of
Functional Organization
E.g. new technology project

under vice president of
engineering
Introduction of new product line
under vice president of marketing
Project assigned to the functional
unit that has most interest
President
VP Finance
VP Marketing
VP
Manufacturing
New Layout
Robot Line
VP
Engineering
Project New
Model Proton
SURIE
Functional Organization
Major Advantages
Maximum flexibility in the use of staff

Individual experts can be utilized by
many different projects
Specialist in the division can be grouped
to share knowledge and experience
Functional division serves as a base of
technological continuity
Functional division contains normal of
advancement
Disadvantages
The client is not the focus of activity and

concern
Tend to be oriented towards functional activities
No individual is given full responsibility for the
project
Slow response to clients needs
Tendency to sub-optimize the project
Motivation of project team is weak
Does not facilitate a holistic approach to the
project
Pure Project Organization
Project is separated from the rest

of the parent system
Becomes self contained unit
Advantages
PM has full line authority over the project

All project workforce directly responsible to
the PM
Lines of communication are shortened
Maintain permanent group of experts
High level of commitment
Ability to make swift decisions
Unity of command
Simple and flexible structure
Support holistic approach to the project
P r e s id e n t
V ic e P r e s id e n t P r o je c t A
V i c e P r e s id e n t P r o je c t B
V ic e P r e s id e n t P r o je c t C
F in a n c e
F in a n c e
F in a n c e
M a n u f a c t u r in g
Disadvantages
Duplication of effort
Stockpile equipment and technical
assistance just in case
Lack of expertise in high technology
project
Foster inconsistency and cutting
corners
Project takes on a life of its own
Worry about life after project ends
10
Matrix Organization
Combination of functional and pure

project organizations
Matrix project is not separated from
parent organizations
Individuals come from respective
functions divisions and are assigned
to the project full time or part time
11
Matrix Organization
President
Manufacturing
Program Manager
R&D
Marketing
PM1
PM2
PM3
12
Matrix Organization
Cross-functional team members

Draw temporarily on technological expertise of
relevant functions
High technology areas integrate functional
specialties
Iterations in adapting over the wall approach
Systems approach integrity of product design
Close coordination and communication among
all parties
13
Advantages of Matrix
Approach
The project is the point of emphasis

Reasonable access t pools of technical talents
Less anxiety about what happens after
project completion
Rapid response to client needs
Access to administrative units of the parent
firms
Better balance of company resources in
multiple projects
Flexibility in control
14
Disadvantages
Delicate balance of power

Movement of resources conflict
Projects resist death
Complex division of authority and
responsibility
Violates the principle of unity of
command
15
Mixed Organizational
Systems
Divisionalization breaking down large

organization into smaller more flexible
units
Spin-off the large projects as subsidiaries
or independent operations
Allow formation of venture team
Hybrid leads to flexibility
Dissimilar groupings encourage overlap,
duplication and friction
16
Mixed Organization
P r e s id e n t
P r o je c t M
F in a n c e
E n g in e e r in g
P r o je c t N
17
Staff Organization
Set up like functional organization

Adds a staff office to administer
projects
Used for small, short run projects
18
Staff Organization
President
Project S
Finance
Manufacturing
Engineering
19
Choosing an
Organizational Form
Functional form major focus on in-depth

technology, require large capital investment
Pure project large number of similar
projects
Matrix organization require integration of
inputs from several functional areas and
involves reasonably sophisticated
technology and several projects must share
technical expertise
Matrix organizations are complex
20
Selection of Project
Organization
Define the project / objectives

Determine the key tasks
Arrange key tasks by sequence and
decompose them into work packages
Determine project subsystems
List special characteristics level of
technology, probable length, resource
requirements, level of outsourcing
21
Project Team
Project office control center, chart

room (focus of all project activity)
Close location to project manager
Co-location of external parties
Reduce physical distance
Better communication
Pressure to complete tasks
22
Key Team Members
Project Engineer
Manufacturing Engineer
Field Manager
Contract Administrator
Project Controller
Support Services Manager
23
Work Organization
Project engineer (technical performance)

and project controller (budget) report to
PM
PM forecast of personnel needs
Prepare WBS to determine exact nature of
tasks
Skills requirements are assessed and
aggregated
Outsourcing of certain tasks
24
Typical Organization of
Engineering Projects
P r o je c t M a n a g e r
P r o je c t E n g in e e r
P r o je c t c o n t r o lle r
M a n u f a c t u r in g E n g in e e r
C o n t r o l A d m in is t r a t o r
F ie ld M a n a g e r
S u p p o r t S e r v ic e s M a n a g e r
25
Staff Critical to Project

Success
Senior project team members

Staffs whom the PM will require
close communication
Staffs with rare skills for project
success
26
Human Factors
Technical problem with a human dimension

Perfectionist can cause delay
Motivation recognition, achievement,
responsibility, advancement, the work
itself
Interpersonal conflict
Management by Objectives (MBO) allows
worker to take responsibility for design and
performance of a task
27
Advantages of MBO
Participative mechanism
Allow professionals to design their own method
Team members know what is expected of them
Members have the opportunity to participate in
deciding their own responsibilities
Members get timely feedback on their
performance
Project manager is provided a tool for
evaluating and controlling performance
28
MBO
Superior set objectives in

consultation and agreement with
subordinates
Subordinate develops action plan, a
detailed plan and scheduled that
will result in achieving the objective
Final plan becomes a contract
29
Major Sources of Conflict

Life cycle phase
Project formation
Buildup phase
Conflict source
Priorities,
procedures,
schedules
Priorities, schedule,
procedures
Main program
Schedule, technical,
manpower
Phase out
Schedules,
Chapter 4 personality,
Project Org
30

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Ch 4

Chapter 4 Project Organizatio

Specialization of the human elements

E.g. new technology project

Chapter 4 Project Org

Maximum flexibility in the use of staff

The client is not the focus of activity and

Chapter 4 Project Org

Pure Project Organization

Project is separated from the rest

Chapter 4 Project Org

PM has full line authority over the project

Chapter 4 Project Org

Combination of functional and pure

Chapter 4 Project Org

Cross-functional team members

The project is the point of emphasis

Delicate balance of power

Divisionalization breaking down large

Chapter 4 Project Org

Set up like functional organization

Chapter 4 Project Org

Chapter 4 Project Org

Functional form major focus on in-depth

Define the project / objectives

Project office control center, chart

Key Team Members

Project engineer (technical performance)

Chapter 4 Project Org

Staff Critical to Project

Senior project team members

Chapter 4 Project Org

Technical problem with a human dimension

Chapter 4 Project Org

Superior set objectives in

Major Sources of Conflict

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