Project Management Fundamentals Project Organization and Integration Ghazala

Project Management Fundamentals Project Organization and Integration Ghazala Amin Monday, October 25, 2021

Project Parameter: Goal All projects have one prime goal – for e. g. , the development of a new camera, construction of a railway station, regeneration of a derelict neighbourhood, or process re-engineering for a large organization. • The goal must be as specific as possible so that there is no ambiguity about what the project intends to achieve. • In addition to the prime goal, projects may have subgoals and subsidiary goals (objectives). • The project goal and project deliverables along with all the requirements and specifications, which must be met by the project for it to be considered complete, determine the project‘s scope. • A project which does not achieve its goal is seen as failed. 2

Project Organization Structure » Project Based Organization � Organizations that drive their revenue primarily from performing projects �Construction contractors, consultants, engineering firms etc. � Organization that have adopted management by projects �Have management systems and PMO with financial, reporting and performance tracking process in place. » Non Project Organization 3 � Often lack Mgmt system designed to support project needs effectively and efficiently �Manufacturing companies, financial service providers etc.

Project Organization Structure » Functional � An organization structure in which staff are grouped hierarchically by function and may be assigned to projects in a team. » Matrixed � Project Manager shares responsibility with functional manager to assign priorities and direct work of assigned human resources ; � a blend of functional and projectized organization. (PMBOK) » Projectized � Project manager maintains complete authority over the entire project resources. Manages and leads the team till project closure. 4

The Functional Form of Organization In the functional form of organization, work activities are structurally segmented according to their “function’ – i. e. their similarity of purpose. For example: - Accounting & Finance - Production - Research & Development - Marketing - IT Support - Procurement - General Administration These are the typical functions one would expect to find in most commercial organizations. Project managers in functional organization must ensure that team understands that conflicting orders will be given by other managers 5

Project Coordination in Functional Organizations Corporation X Project Coordination Human Resources Marketing Electronics Engineering Customer Service Finance & Administration Engineering Software Engineering Domestic Sales Manufacturing Mechanical Engineering International Sales Design Fabrication Assembly Procurement Purchasing Receiving & Inspection Testing Production Scheduling 6

The Functional Form- Advantages No alteration in the existing structure and operations of the organization is necessary as functional units are already well established. The project simply avails the existing structure and diverse resources which are available in its functional areas in order to undertake the projects which it wants. 7

The Functional Form - Advantages The functional form of project organization offers high flexibility in assigning personell employed in the different functional units to work on projects. Functional employees can divide their time working on different projects and can be immediately reassigned to other projects once their work has been completed. 8

The Functional Form - Advantages Functional employees working on projects can maintain their normal career paths in their respective functional areas or „home bases“. This is important because it allows functional employees to keep abreast of developments concerning them in their respective areas, which they may not be able to do in a (dedicated) project team, and it does not jeopardize their promotional chances. 9

The Functional Form - Disadvantages If a project has a comparatively broad scope, and crosses several functional lines, the different functional areas may have different perceptions as to the priority level which should be accorded to the project. Hence, reluctance by one functional area to support the project and provide the resources needed for it may result in delays to the project. 10

The Functional Form - Disadvantages Functional staff working on a project may display a lack of identification with, and committment to the project. This is because project work is often seen as additional work which distracts them from their routine functional work (which for them usually has priority) and for which there may be no incentive or reward system. A sense of „project ownership“ is frequently lacking and the high level of motivation usually found among (dedicated) project teams is absent. 11

The Functional Form - Disadvantages A strong criticism of the functional form of organi-zing projects is that there is no individual who has full authority and responsibility for the project. Instead, authority and responsibility is shared between different individuals from different parts of the organization in which case no proper accountability fo the project can be expected. 12

The Project Matrix Organization 13

What is the Project Matrix Organization? The Matrix organization is a form of project organization within the framework of which temporary horizontal (project) levels are applied over the permanent vertical (functional) levels of the organization. Project Management defines three basic project matrix forms: the Functional Matrix, Balanced Matrix, and Project Matrix. In practice, the matrix structure can assume many different manifestations and these may change over the course of the project life-cycle. A weak matrix organization complicates team development process and 14 activities

The Balanced Project Matrix Functional Manager Staff Staff PM Staff Staff Project Coordination 15

The Strong Project Matrix - Advantages Resources are scarce in any organization! A big advantage of the matrix is that it allows for the sharing of diverse resources across multiple projects within the respective functional areas, enabling the functional personell to flexibly divide their attention, effort and time among these projects and thereby reducing the costly duplication of resources which is inherent in setting up (dedicated) project teams. 16

The Strong Project Matrix - Disadvantages In the matrix environment, there is a potential for conflict between project managers and functional managers due to diverging agendas, possibly unclear patterns of authority and accountability and so forth, and this may occasionally engender a personal animosity which will be detrimental for the project. 17

Problems With Matrix Organizations • Failure to understand the key principles and roles in the matrix organizational environment • Distrust in organizational forms which are not based on Fayol‘s „unity of command“ • Apprehensions of functional managers over the apparent superority of the project goals over those of the functional entity • Senior management shortcomings in terms of clearly delineating in writing the formal and reciprocal roles of all the key managers involved in the project 18

Problems With Matrix Organizations • Lacking understanding by the project team to understand the role and responsibilities of the functional professionals and their managers • Incompetent project and functional managers / project managers who manage less and coordinate more / decision referall by project managers to senior management • Inadequate stakeholder management • Lack of trust, integrity, loyalty and committment by project team members 19

The (Pure) Project-Based Organization 20

About the Project-Based Organization In a project-based organization, most of the work performed is project work and this is reflected in the organization‘s structure which is not based on the functional paradigm but changes acccording to the projects which the organization has in its portfolio. Project-based organizations are often found in the defence and construction industries, in the movie industry, in some NGOs and in some outsourced industries. A strong or project matrix organization is best for handling cross-functional project needs for a large complex project. 21

Structure of a Project-Based Organization Corporation X Marketing Other Projects Finance and Administration Manufacturing Other Projects Legal Project Manager (Project B) Project Manager (Project A) Engineering Human Resources Procurement Engineering Subcontractors (X, Y, Z) Manufacturing Procurement 22