ch04 project organization
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Chapter 4 Project Organization 1
Ch 4Project Organization
Organize - to form into anassociation for a common purpose
or arrange systematically
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Chapter 4 Project Organization 2
Project Organization Specialization of the human elements
Different types = functional, product
line, geographical location, productionprocess, type of customer, subsidiaryorganization, time, vertical or horizontalorganization
How to tie project to the parent firm
How to organize the project itself
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Chapter 4 Project Organization 3
Project as Part of Functional
Organization E.g. new technology projectunder
vice president of engineering
Introduction of new product lineunder vice president of marketing
Project assigned to the functional unit
that has most interest
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Chapter 4 Project Organization 4
President
VP Finance VP Marketing VPManufacturing VPEngineering
Functional Organization
Project NewModel ProtonSURIE
New Layout Robot Line
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Chapter 4 Project Organization 5
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
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Chapter 4 Project Organization 6
Disadvantages The client is not the focus of activity and
concern
Tend to be oriented towards functionalactivities
No individual is given full responsibility for theproject
Slow response to clients needs Tendency to sub-optimize the project
Motivation of project team is weak
Does not facilitate a holistic approach to theproject
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Pure Project Organization Project is separated from the rest of the
parent system
Becomes self contained unit
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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
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Project Organization
Finance Manufacturing
Vice President Project A
Finance Manufacturing
Vice President Project B
Finance Manufacturing
Vice President Project C
President
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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
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Matrix Organization Combination of functional and pure
project organizations
Matrix project is not separated fromparent organizations
Individuals come from respective
functions divisions and are assigned tothe project full time or part time
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Matrix Organization
PM1
PM2
PM3
Manufacturing Program Manager R&D Marketing
President
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Matrix Organization Cross-functional team members
Draw temporarily on technological expertise
of relevant functions High technology areasintegrate functional
specialties
Iterations in adapting over the wall
approach Systems approachintegrity of product
design
Close coordination and communication
among all parties
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Chapter 4 Project Organization 14
Advantages of Matrix
Approach The project is the point of emphasis
Reasonable access t pools of technical talents
Less anxiety about what happens afterproject 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
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Chapter 4 Project Organization 15
Disadvantages Delicate balance of power
Movement of resourcesconflict
Projects resist death
Complex division of authority andresponsibility
Violates the principle of unity ofcommand
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Chapter 4 Project Organization 16
Mixed Organizational Systems Divisionalizationbreaking down large
organization into smaller more flexible units
Spin-off the large projects as subsidiaries orindependent operations
Allow formation of venture team
Hybrid leads to flexibility Dissimilar groupings encourage overlap,
duplication and friction
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Chapter 4 Project Organization 17
Mixed Organization
Project M Finance Engineering Project N
President
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Chapter 4 Project Organization 18
Staff Organization Set up like functional organization
Adds a staff office to administer
projects
Used for small, short run projects
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Chapter 4 Project Organization 19
Staff Organization
Finance Manufacturing Engineering
President
Project S
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Chapter 4 Project Organization 20
Choosing an Organizational
Form Functional formmajor focus on in-depth
technology, require large capital investment
Pure projectlarge number of similarprojects
Matrix organizationrequire integration ofinputs from several functional areas and
involves reasonably sophisticated technologyand several projects must share technicalexpertise
Matrix organizations are complex
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Chapter 4 Project Organization 21
Selection of Project
Organization Define the project / objectives
Determine the key tasks
Arrange key tasks by sequence anddecompose them into work packages
Determine project subsystems
List special characteristicslevel oftechnology, probable length, resourcerequirements, level of outsourcing
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Chapter 4 Project Organization 22
Project Team Project officecontrol 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
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Chapter 4 Project Organization 23
Key Team Members Project Engineer
Manufacturing Engineer
Field Manager
Contract Administrator
Project Controller Support Services Manager
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Chapter 4 Project Organization 24
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 andaggregated
Outsourcing of certain tasks
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Chapter 4 Project Organization 25
Typical Organization of
Engineering Projects
Field Manager
Manufacturing Engineer
Project Engineer
Support Services Manager
Control Administrator
Project controller
Project Manager
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Chapter 4 Project Organization 26
Staff Critical to Project
Success Senior project team members
Staffs whom the PM will require close
communication
Staffs with rare skills for project success
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Chapter 4 Project Organization 27
Human Factors Technical problem with a human dimension
Perfectionistcan cause delay
Motivationrecognition, achievement,responsibility, advancement, the work itself
Interpersonal conflict
Management by Objectives (MBO)allowsworker to take responsibility for design andperformance of a task
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Chapter 4 Project Organization 28
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
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Chapter 4 Project Organization 29
MBO Superior set objectives in consultation
and agreement with subordinates
Subordinate develops action plan, adetailed plan and scheduled that willresult in achieving the objective
Final plan becomes a contract
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Major Sources of ConflictLife cycle phase Conflict source
Project formation Priorities, procedures,schedules
Buildup phase Priorities, schedule,procedures
Main program Schedule, technical,manpower
Phase out Schedules, personality,
manpower
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