Course: Project Management Chapter: 4 (Organizing Projects)

Reasons for Growth of Project Oriented Organizations:

Mesbaul Khair ID: 3-11-21-082

First, speed and market responsiveness have become absolute requirements for successful competition. It is no longer competitively acceptable to develop a new product or service using traditional methods in which the potential new product is passed from functional area to functional area until it is deemed suitable for production and distribution. Second, the development of new products, processes or services regularly requires inputs from diverse areas of specialized knowledge. Unfortunately, the exact mix of specialties appropriate for the design and development of one product or service is rarely suitable for another product or service. Third, the rapid expansion of technological possibilities in almost every area of enterprise tends to destabilize the structure of organizations. Mergers, downsizing, reorganizations, new marketing channels and other similar major disturbances all require system-wide responsiveness from the total organization. Again, no traditional mechanism exists to handle change on such a large scale satisfactorily but project organization can. Finally, a large majority of senior managers rarely feel much condence in their understanding of and control over a great many of the activities going on in their organizations. Projects are properly planned, integrated with other related activities and reported routinely on their progress. The Major Advantages of Using Functional Elements of the Parent Organization as the Administrative Home for a Project Are: 1. There is maximum exibility in the use of staff. If the proper functional division has been chosen as the projects home, the division will be the primary administrative base for individuals with technical expertise in the elds relevant to the project. 2. Individual experts can be utilized by many different projects. With the broad base of technical personnel available in the functional divisions, people can be switched back and forth between the different projects with relative ease. 3. Specialists in the division can be grouped to share knowledge and experience. Therefore, the project team has access to whatever technical knowledge resides in the functional group. This depth of knowledge is a potential source of creative, synergistic solutions to technical problems. 4. The functional division also serves as a base of technological continuity when individuals choose to leave the project and even the parent rm. Perhaps, technological continuity is the procedural, administrative and overall policy continuity that results when the project is maintained in a specic functional division of the parent rm. 5. The project may be a source of glory for those who participate in its successful completion, but the functional eld is their professional home and the focus of their professional advancement. The Major Disadvantages of Using Functional Elements of the Parent Organization as the Administrative Home for a Project Are: 1. The client is not the focus of activity and concern. The functional unit has its own work to do, which usually takes precedence over the work of the project and hence over the interests of the client. 2. The functional division tends to be oriented toward the activities particular to its function. It is not usually problem oriented in the sense that a project should be to be successful. 3. Occasionally in functionally organized projects, no individual is given full responsibility for the project. This failure to pinpoint responsibility usually means that the PM is made accountable for some parts of the project, but another person is made accountable for one or more other parts. 4. There are often several layers of management between the project and the client. 5. The project is not in the mainstream of activity and interest and some project team members may view service on the project as a professional detour.
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6. The motivation of people assigned to the project tends to be weak. 7. There is a tendency to sub-optimize the project. Project issues that are directly within the interest area of the functional home may be dealt with carefully, but those outside normal interest areas may be given short shrift.

Pure Project Organization

In a pure project organization, the project is separated from the rest of the parent system. It becomes a self-contained unit with its own technical staff, its own administration, tied to the parent rm by the tenuous strands of periodic progress reports and oversight. Some parent organizations prescribe administrative, nancial, personnel and control procedures in detail. Others allow the project almost total freedom within the limits of nal accountability.

Advantages of Pure Project

1. The project manager has full line authority over the project. There is a complete work force devoted to the project. The PM is like the CEO of a rm that is dedicated to carrying out the project. 2. All members of the project work force are directly responsible to the PM. There are no functional division heads whose permission must be sought or whose advice must be heeded before making technological decisions. 3. When the project is removed from the functional division, the lines of communication are shortened. The shortened communication lines result in faster communications with fewer failures. 4. When there are several successive projects of a similar kind, the pure project organization can maintain a more or less permanent cadre of experts who develop considerable skill in specic technologies. 5. The project team that has a strong and separate identity of its own tends to develop a high level of commitment from its members. Motivation is high and acts to foster the task orientation. 6. Because authority is centralized, the ability to make swift decisions is greatly enhanced. The entire project organization can react more rapidly to the requirements of the client and the needs of senior management. 7. Unity of command exists in a pure organization. 8. Pure project organizations are structurally simple and exible, which makes them relatively easy to understand and to implement. 9. The organizational structure tends to support a holistic approach to the project.

Disadvantages of Pure Project

1. When the parent organization takes on several projects, it is common for each one to be fully staffed. This can lead to considerable duplication of effort in every area from clerical staff to the most sophisticated technological support units. If a project does not require a full-time personnel manager, it must have one nonetheless because personnel managers come in integers and staff is usually not shared across projects.
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2. In fact, the need to ensure access to technological knowledge and skills results in an attempt by the PM to stockpile equipment and technical assistance in order to be certain that it will be available when needed. 3. Removing the project from technical control by a functional department has a serious disadvantage if the project is characterized as high technology. Though individuals engaged with projects develop considerable depth in the technology of the project, they tend to fall behind in other areas of their technical expertise. 4. Pure project seem to foster inconsistency in the way in which policies and procedures are carried out. 5. In pure project organizations, the project takes on a life of its own. A disease known as projectitis develops. Friendly rivalry may become bitter competition and political inghting between projects is common. 6. Another symptom of projectitis is the worry about life after the project ends. Typically, there is considerable uncertainty about what will happen when the project is completed.

The Matrix Organization

The matrix organization is a combination of the functional and the pure project organizations. It is a pure project organization overlaid on the functional divisions of the parent rm. Being a combination of pure project and functional organization structures, a matrix organization can take on a wide variety of specic forms, depending on which of the two extremes (functional or pure project) it most resembles. The project or strong matrix most resembles the pure project organization.

Advantages of Matrix Organization

1. The project is the point of emphasis. The PM takes responsibility for managing the project, for bringing it in on time within cost and to specication. The matrix organization shares this virtue with the pure project organization. 2. Because the project organization is overlaid on the functional divisions, temporarily drawing labor and talent from them, the project has reasonable access to the entire reservoir of technology in all functional divisions. 3. There is less anxiety about what happens when the project is completed than is typical of the pure project organization. Even though team members tend to develop a strong attachment for the project, they also feel close to their functional home. 4. Response to client needs in the matrix organization is just exible. The matrix organization responds exibly and rapidly to the demands made by those inside the parent organization. 5. With matrix management, the project will have or have access to representatives from the administrative units of the parent rm. As a result, consistency with the policies, practices and procedures of the parent rm tends to be preserved. This consistency with parent rm procedures tends to foster project credibility in the administration of the parent organization. 6. Matrix organization allows a better companywide balance of resources to achieve the several different time/cost/performance targets of the individual projects. This holistic approach to the total organizations needs allows projects to be staffed and scheduled in order to optimize total system performance rather than to achieve the goals of one project at the expense of others.
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7. While pure project and functional organizations represent extremes of the organizational spectrum, matrix organizations cover a wide range in between.

Disadvantages of Matrix Organization

1. With matrix organizations, the power is more balanced. Often, the balance is fairly delicate. When doubt exists about who is in charge, the work of the project suffers. If the project is successful and highly visible, doubt about who is in charge can foster political inghting for the credit and glory. If the project is a failure, political inghting will be even more brutal to avoid blame. 2. While the ability to balance time, cost and performance between several projects is an advantage of matrix organizations, that ability has its dark side. The set of projects must be carefully monitored as a set, a tough job. Further, the movement of resources from project in order to satisfy the several schedules may foster political inghting among the several PMs. 3. For strong matrices, problems associated with shutting down a project are almost as severe as those in pure project organizations. The projects having individual identities resist death. Even in matrix organizations, projectitis is still a serious disease. 4. In matrix-organized projects, the PM controls administrative decisions and the functional heads control technological decisions. The distinction is simple enough when writing about project management, but for the operating PM the division of authority and responsibility inherent in matrix management is complex. 5. Matrix management violates the management principle of unity of command. Project workers have at least two bosses, their functional heads and the PM. There is no way around the split loyalties and confusion that result.

Choosing an Organizational Form

Since it is our objective to provide criteria for the selection of a project organization, we shall illustrate the process with an example using the following procedure: 1. Dene the project with a statement of the objective that identies the major outcomes desired. 2. Determine the key tasks associated with each objective and locate the units in the parent organization that serve 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 projectfor example, level of technology needed, probable length and size of the project, any potential problems with the individuals who may be assigned to the work, possible political problems between different functions involved and anything else that seems relevant, including the parent rms previous experiences with different ways of organizing projects. 6. In light of the above and with full cognizance of the pros and cons associated with each structural form, choose a structure.

Risk Identication through Failure Mode and Effect Analysis (FMEA)

FMEA is the application of a scoring model such as those used for project selection. It is easily applied to risk by using six steps. 1. List possible ways a project might fail. 2. Evaluate the severity (S) of the consequences of each type of failure on a 10-point scale where 1 is no effect and 10 is very severe. 3. For each cause of failure, estimate the likelihood (L) of its occurrence on a 10-point scale where 1 is remote and 10 is almost certain. 4. Estimate the ability to detect (D) a failure associated with each cause. Using a 10 point scale, 1 means detectability is almost certain using normal monitoring/control systems and 10 means it is practically certain that failure will not be detected in time to avoid or mitigate it. 5. Find the Risk Priority Number (RPN) where RPN = S x L x D. 6. Consider ways to reduce the S, L and D for each cause of failure with a signicantly high RPN.
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Human Factors and the Project Team

Some advantages of empowerment for project teams are: 1. It harnesses the ability of the team members to manipulate tasks so that project objectives are met. The team is encouraged to nd better ways to do 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 solutions will result from team interaction. 5. Team members get timely feedback on their performance. 6. The PM is provided a tool for evaluating the teams performance.

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