ch04 project organization

8/11/2019 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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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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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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President

VP Finance VP Marketing VPManufacturing VPEngineering

Functional Organization

Project NewModel ProtonSURIE

New Layout Robot Line


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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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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



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



Project Organization

Finance Manufacturing

Vice President Project A


Vice President Project B


Vice President Project C

President



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



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



Matrix Organization

PM1

PM2

PM3

Manufacturing Program Manager R&D Marketing

President



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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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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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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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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Mixed Organization

Project M Finance Engineering Project N

President


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Staff Organization Set up like functional organization

Adds a staff office to administer

projects

Used for small, short run projects


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Staff Organization

Finance Manufacturing Engineering

President

Project S


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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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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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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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Key Team Members Project Engineer

Manufacturing Engineer

Field Manager

Contract Administrator

Project Controller Support Services Manager


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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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Typical Organization of

Engineering Projects

Field Manager

Manufacturing Engineer

Project Engineer

Support Services Manager

Control Administrator

Project controller

Project Manager


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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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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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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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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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