Chapter 4 Project Organization
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Ch 4 Project Organization
“Organize - to form into an association 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, 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
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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
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President
VP Finance VP Marketing VP Manufacturing
VP Engineering
Functional Organization
Project New Model Proton SURIE
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 functional
activities No individual is given full responsibility for the
project Slow response to client’s needs Tendency to sub-optimize the project Motivation of project team is weak Does not facilitate a holistic approach to the
project
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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
F in an ce M a nu fa c tu ring
V ice P re s id en t P ro je c t A
F in an ce M a nu fa c tu ring
V ice P re s id en t P ro je c t B
F in an ce M a nu fa c tu ring
V ice P re s id en t P ro je c t C
P re sid e n t
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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
from parent organizations Individuals come from respective
functions divisions and are assigned to the 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 areas – integrate functional
specialties Iterations in adapting “over the wall”
approach Systems approach – integrity 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 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
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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
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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
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Mixed Organization
P ro je c t M F in an ce E n g in e ering P ro je c t N
P re sid e n t
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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 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
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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
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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
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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 and
aggregated Outsourcing of certain tasks
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Typical Organization of Engineering Projects
F ie ld M a na g er
M a nu fa ctu rin g E n g in e er
P ro je ct E n g in e er
S u p po rt S e rvice s M a na g er
C o n tro l A d m in is tra to r
P ro je c t co n tro lle r
P ro je ct M an a g er
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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 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
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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, a detailed plan and scheduled that will result 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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