pmchap3 organization structure

Understanding the theories of Abraham Maslow, Frederick Herzberg and Douglas McGregor on motivation

Describe the three major types of formal organizational structures: functional, pure project, and matrix.

Discuss the advantages and disadvantages of the functional, pure project, and matrix organizational structures.

Understanding the theories of Abraham Maslow, Frederick Herzberg and Douglas McGregor on motivation

Describe the three major types of formal organizational structures: functional, pure project, and matrix.

Discuss the advantages and disadvantages of the functional, pure project, and matrix organizational structures.

Project Human Resource Management Objectives

Triple Constraints Theory in PMTriple Constraints Theory in PM

Every project is constrained in different ways by its Cost goals: What should it cost? Time goals: How long should it take to

complete? Scope goals: What is the project trying to

accomplish?

Every project is constrained in different ways by its Cost goals: What should it cost? Time goals: How long should it take to

complete? Scope goals: What is the project trying to

accomplish?

CostScope

Triple Constraints Theory in PMTriple Constraints Theory in PM

CostScope

Fourth Element?

Why Projects FailWhy Projects Fail

Failure to define objectives

Project Management Problems

Technicalissues14%

Inexperiencein scope andcomplexity

Lack of communication

Source: KPMG

People in Project Management

People are an organization’s most important assets.

The tasks of a manager are essentially people oriented. Unless there is some understanding of people, management will be unsuccessful.

Keys to Managing PeopleKeys to Managing People Important areas related to project

management include– motivation– influence and power

OB Theory: psychologists and management theorists, including:– Maslow’s Hierarchy of Needs– Herzberg’s Motivational and Hygiene

Factors– McGregor’s Theory X and Y

Motivation An important role of a manager is to motivate the

people working on a project. Motivation is a complex issue but it appears that

there are different types of motivation based on:

– Basic needs (e.g., food, sleep, shelter)– Personal needs (e.g., respect, self-

esteem)– Social needs (e.g., to be accepted as

part of a group)

Motivation Motivations depend on

satisfying needs. It can be assumed that

physiological and safety needs are satisfied.

Social, esteem and self-realization needs are most significant from a managerial viewpoint.

Need satisfaction Social

– Provide communal facilities– Allow informal communications

Esteem– Recognition of achievements– Appropriate rewards

Self-realization– Training - people want to learn more– Responsibility

Douglas McGregor Theory X/YDouglas McGregor Theory X/Y– Douglas McGregor

Theory X–Managers assume people dislike work, avoid responsibility, lack ambition, and need close supervision.

Theory Y–Managers assume people enjoy work, accept responsibility, are innovative, and areself-controlling.

– Douglas McGregorTheory X–Managers assume people dislike work, avoid responsibility, lack ambition, and need close supervision.

Theory Y–Managers assume people enjoy work, accept responsibility, are innovative, and areself-controlling.

Herzberg’s Two-Factor TheoryHerzberg’s Two-Factor TheoryMotivators (job satisfaction)– Motivate and satisfy workers in the job

context (intrinsic) – Are associated with higher order needs

Hygiene factors (job dissatisfaction)– Can only prevent dissatisfaction with job

content (extrinsic)– Are associated with lower order needs– Create dissatisfaction if absent in the

workplace

Motivators (job satisfaction)– Motivate and satisfy workers in the job

context (intrinsic) – Are associated with higher order needs

Hygiene factors (job dissatisfaction)– Can only prevent dissatisfaction with job

content (extrinsic)– Are associated with lower order needs– Create dissatisfaction if absent in the

workplace

Factors characterizing events on the job that led to job dissatisfaction

Factors characterizing events on the job that led to job satisfaction

Motivators

Hygiene Factors

Personality types

Needs hierarchy is an over-simplification. Must also take into account different

personality types:

– Task-oriented– Self-oriented– Interaction-oriented

Personality types Task-oriented.

– The motivation for doing the work is the work itself.

Self-oriented. – The work is a means to an end which is

the achievement of individual goals - e.g., to get rich, to travel etc.

Interaction-oriented– The principal motivation is the presence

and actions of co-workers. People go to work because they like to go to work.

Which Organization Structure Is Best For Project Management?

Project OrganizationProject OrganizationHow is the project organized in its parent organization.

–Who is in charge?–who does each individual report to?–at what levels resource allocation decisions made?–Type of Project organizational behavior?

How is the project organized in its parent organization.

–Who is in charge?–who does each individual report to?–at what levels resource allocation decisions made?–Type of Project organizational behavior?

What is Your Task?What is Your Task?

Your task as a Project Manager is to create an organizational structure that:

1. Supports your strategic project plan

2. Encourages the knowledge, skills and attitudes required to support the strategic project plan

3. Encourages people and groups to cooperate and work together effectively.

Your task as a Project Manager is to create an organizational structure that:

1. Supports your strategic project plan

2. Encourages the knowledge, skills and attitudes required to support the strategic project plan

3. Encourages people and groups to cooperate and work together effectively.

Choosing the Appropriate Project Management StructureChoosing the Appropriate Project Management Structure

Factors:– Size of project– Strategic importance– Novelty and need for innovation– Need for integration– Budget and time constraints– Stability of resource requirements.

Choosing the Appropriate Project Management Organization Structure

Two Questions:

– How important is project management to the success of the firm?

– Resource availability—Cash, people, equipment, etc.

Two Questions:

– How important is project management to the success of the firm?

– Resource availability—Cash, people, equipment, etc.

Structure and Culture AffectStructure and Culture Affect

Behavior

Motivation

Performance

Teamwork and cooperation

Intergroup and Interdepartmental relationships

Behavior

Motivation

Performance

Teamwork and cooperation

Intergroup and Interdepartmental relationships

What bearing does organizational structure have on organizational behavior?What bearing does organizational structure have on organizational behavior? As a project manager, you (or your team) must

decide:

– How you want your people to behave

– What attitudes you want to encourage

– What you want your people to accomplish Then you can design the organization’s structure

to encourage the development of:– Cultural values and norms (expectations about

appropriate individual and group behavior commonly agreed upon by members)

– Desired attitudes, behaviors, and goals.

As a project manager, you (or your team) must decide:

– How you want your people to behave

– What attitudes you want to encourage

– What you want your people to accomplish Then you can design the organization’s structure

to encourage the development of:– Cultural values and norms (expectations about

appropriate individual and group behavior commonly agreed upon by members)

– Desired attitudes, behaviors, and goals.

Determinants of StructureDeterminants of Structure

Human Resources: the final factor affecting organizational structure. Higher skilled workers who need to work in

teams usually need a more flexible structure. Higher skilled workers often have

professional norms

Choosing an Organizational FormChoosing an Organizational Form Functional Form

– focus is on in-depth application of a technology – Most of the talent/expertise resides in one

functional area Pure Project Form

– firm engages in a large number of similar projects (construction)

– one-time, highly specific unique tasks that is not appropriate for a single functional area

Matrix Form– integration of inputs from several functional areas– technical specialists are not required full-time

Functional Form– focus is on in-depth application of a technology – Most of the talent/expertise resides in one

functional area Pure Project Form

– firm engages in a large number of similar projects (construction)

– one-time, highly specific unique tasks that is not appropriate for a single functional area

Matrix Form– integration of inputs from several functional areas– technical specialists are not required full-time

GeneralManager

Engineering Production Sales MarketingAdminis-tration Director Level

Division Level

Department Level

Section Level Functional Responsibility

The functional Organization

Admin.

The functional OrganizationThe functional Organization Characterized by

– stratified levels of management – vertical lines of authority– work that is partitioned according to specialties of

discipline (i.e., the “function”). Objective is to emphasize technical excellence The manager of the lead/dominant functional area is

usually the PM PM usually needs to acquire/negotiate

resources/expertise from other functional areas– source of conflict? Who is in charge? What is in it

for us?

Characterized by – stratified levels of management – vertical lines of authority– work that is partitioned according to specialties of

discipline (i.e., the “function”). Objective is to emphasize technical excellence The manager of the lead/dominant functional area is

usually the PM PM usually needs to acquire/negotiate

resources/expertise from other functional areas– source of conflict? Who is in charge? What is in it

for us?

Advantages of Functional OrganizationAdvantages of Functional Organization Maximum flexibility in the use of staff Individual experts switched between different

projects Maintains a pool of specialists and talent Provides clearly defined communication

channels Base of technological continuity The functional division contains the normal path

of advancement for the individuals whose expertise is in the functional area

Maximum flexibility in the use of staff Individual experts switched between different

projects Maintains a pool of specialists and talent Provides clearly defined communication

channels Base of technological continuity The functional division contains the normal path

of advancement for the individuals whose expertise is in the functional area

Disadvantages of Functional OrganizationDisadvantages of Functional Organization

Client is not the focus of activity Less concerned with the project objectives and

goals than with functional activities and objectives one individual is not responsible for the project slow communication and decision making Lack of big picture (not a holistic approach) Tendency to sub-optimize

Client is not the focus of activity Less concerned with the project objectives and

goals than with functional activities and objectives one individual is not responsible for the project slow communication and decision making Lack of big picture (not a holistic approach) Tendency to sub-optimize

Pure Project Structure

General Manager

Project AManager

Project BManager

Project CManager

ENG. MFG.ENG. MFG. ENG. MFG.

Pure Project Organization

Projectized Structure AdvantagesProjectized Structure Advantages It provides complete line authority over the

project (i.e., strong control through a single project authority).

The project participants work directly for the project manager.

There are strong communications channels. Staffs can maintain expertise on a given

project without sharing key personnel. Very rapid reaction time is provided.

It provides complete line authority over the project (i.e., strong control through a single project authority).

The project participants work directly for the project manager.

There are strong communications channels. Staffs can maintain expertise on a given

project without sharing key personnel. Very rapid reaction time is provided.

Advantages (Continued)Advantages (Continued) Personnel demonstrate loyalty to the project;

better morale with product identification. A focal point develops for out-of-company

customer relations. There is flexibility in determining time

(schedule), cost, and performance trade-offs. Interface management becomes easier as unit

size is decreased. Upper-level management maintains more free

time for executive decision making.

Personnel demonstrate loyalty to the project; better morale with product identification.

A focal point develops for out-of-company customer relations.

There is flexibility in determining time (schedule), cost, and performance trade-offs.

Interface management becomes easier as unit size is decreased.

Upper-level management maintains more free time for executive decision making.

Projectized Structure DisadvantagesProjectized Structure Disadvantages Cost of maintaining this form in a multi-

project company would be prohibitive due to duplication of effort, facilities, and personnel; inefficient usage.

There exists a tendency to retain personnel on a project long after they are needed. Upper-level management must balance workloads as projects start up and are phased out.

Cost of maintaining this form in a multi-project company would be prohibitive due to duplication of effort, facilities, and personnel; inefficient usage.

There exists a tendency to retain personnel on a project long after they are needed. Upper-level management must balance workloads as projects start up and are phased out.

Disadvantages (Continued)Disadvantages (Continued) Technology suffers because, without strong

functional groups, outlook of the future to improve company’s capabilities for new programs would be hampered (i.e., no perpetuation of technology).

Control of functional (i.e., organizational) specialists requires top-level coordination.

There is a lack of opportunities for technical interchange between projects.

There is a lack of career continuity and opportunities for project personnel.

Technology suffers because, without strong functional groups, outlook of the future to improve company’s capabilities for new programs would be hampered (i.e., no perpetuation of technology).

Control of functional (i.e., organizational) specialists requires top-level coordination.

There is a lack of opportunities for technical interchange between projects.

There is a lack of career continuity and opportunities for project personnel.

A Matrix Organization

ProjectBeta

manager

ProjectBeta

manager

Productionsupportgroup

Accountingsupportgroup

Engineeringsupportgroup

ProjectAlpha

manager

ProjectAlpha

manager

Productionsupportgroup

Accountingsupportgroup

Engineeringsupportgroup

Productiondepartment

Accountingdepartment

Engineeringdepartment

MachineryDivision

Functional authority Project authority

Fig. 13.5

The Matrix Organization

The Matrix OrganizationThe Matrix Organization

A pure project organization overlaid on the functional divisions of the parent firm

A mix or hybrid structure, incorporating both the functional and pure project approaches with the hope of optimizing the strengths and minimizing the weaknesses of each

Its objective is control and technical excellence can take on a wide variety of forms on the

continuum from pure project to functional project organization

A pure project organization overlaid on the functional divisions of the parent firm

A mix or hybrid structure, incorporating both the functional and pure project approaches with the hope of optimizing the strengths and minimizing the weaknesses of each

Its objective is control and technical excellence can take on a wide variety of forms on the

continuum from pure project to functional project organization

Advantages of a Matrix OrganizationAdvantages of a Matrix Organization PM responsible for the project Reservoir of technical talent reduces duplication

therefore cost Flexible utilization of personnel across projects Holistic approach-has the project and company

“big picture” Project team members maintain home base-

less anxiety after project completion Provides a project-customer focal point

PM responsible for the project Reservoir of technical talent reduces duplication

therefore cost Flexible utilization of personnel across projects Holistic approach-has the project and company

“big picture” Project team members maintain home base-

less anxiety after project completion Provides a project-customer focal point

Disadvantages of a Matrix Organization Disadvantages of a Matrix Organization Violates one-boss principle Authority and responsibility lines are at times

unclear Communication may be chaotic more effort and time are needed to initially define

policies and procedures response time may be slow PM controls administrative decisions (when and

what the people assigned to the project will do); functional managers control who will be assigned to the project

Violates one-boss principle Authority and responsibility lines are at times

unclear Communication may be chaotic more effort and time are needed to initially define

policies and procedures response time may be slow PM controls administrative decisions (when and

what the people assigned to the project will do); functional managers control who will be assigned to the project

Organization and Project Planning Organizational StructureOrganization and Project Planning Organizational Structure

1. Define the project with a statement of the objective(s) that identifies 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

Choosing an Organizational Form Criteria for the selection of a project organization:

P rep areA irc ra ft

In sp ec tA irc ra ft

R ec tifyA irc ra ft

C h eckR ec tifica tion

M ain ten an ce

Work PackageProject Title

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 project

6. In light of items 1-5, and with full cognizance of

the pros and cons associated with each

structural form, choose a structure

M ain ten an ce

Activities

Activity Description Inspection Engineers

Fitters

A Position & jack up aircraft. Clean undercarriage & remove wheels

B Inspect engines 1 3

C Inspect airframe 2 1

D Inspect undercarriage 1 3

E Rectify airframe - 3

F Rectify engines - 2

G Rectify undercarriage & refit wheels - 1

H Check rectification & sign off 3 1

Maintenance Project

Planning

Power Plant

Airframe

Plant&Equipment

Choosing an Organizational FormChoosing an Organizational Form

Selecting the organizational interface between the

project and the firm is a difficult task

– The choice is determined by the situation, but is

also partly intuitive

– Must consider the nature of the potential project,

the characteristics of the various organization

options, the advantages and disadvantages of each,

the cultural preferences of the parent organization,

and then make the best compromise that can be

Selecting the organizational interface between the

project and the firm is a difficult task

– The choice is determined by the situation, but is

also partly intuitive

– Must consider the nature of the potential project,

the characteristics of the various organization

options, the advantages and disadvantages of each,

the cultural preferences of the parent organization,

and then make the best compromise that can be

made 1

1. Define the project with a statement of the objective(s) that identifies 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

M ain ten an ce

Work PackageProject Title

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 project

6. In light of items 1-5, and with full cognizance of

the pros and cons associated with each

structural form, choose a structure

M ain ten an ce

Activities

Activity Description Inspection Engineers

Fitters

A Position & jack up aircraft. Clean undercarriage & remove wheels

B Inspect engines 1 3

C Inspect airframe 2 1

D Inspect undercarriage 1 3

E Rectify airframe - 3

F Rectify engines - 2

G Rectify undercarriage & refit wheels - 1

H Check rectification & sign off 3 1

Maintenance Project

Planning

Power Plant

Airframe

Plant&Equipment

The Project TeamThe Project Team To staff a project, the project manager works from a forecast

of personnel needs over the life cycle of the project

– A work breakdown structure (WBS) is prepared to determine the exact nature of the tasks required to complete the project

– Skills requirements for these tasks are assessed and like skills are aggregated to determine work force needs

– From this base, the functional departments are contacted to locate individuals who can meet these needs

– Certain tasks may be subcontracted

To staff a project, the project manager works from a forecast of personnel needs over the life cycle of the project

– A work breakdown structure (WBS) is prepared to determine the exact nature of the tasks required to complete the project

– Skills requirements for these tasks are assessed and like skills are aggregated to determine work force needs

– From this base, the functional departments are contacted to locate individuals who can meet these needs

– Certain tasks may be subcontracted

The Project TeamThe Project Team There are some people who are more critical to the

project’s success than others and should report directly to the project manager or the project manager’s deputy:

– Senior project team members who will be having a

long-term relationship with the project

– Those with whom the project manager requires

continuous or close communication

– Those with rare skills necessary to project success

There are some people who are more critical to the project’s success than others and should report directly to the project manager or the project manager’s deputy:

– Senior project team members who will be having a

long-term relationship with the project

– Those with whom the project manager requires

continuous or close communication

– Those with rare skills necessary to project success

Meeting schedule and cost goals, without compromising performance is a technical problem, with a human dimension

– Project professionals tend to be perfectionists

– Pride in workmanship leads the team member to

improve (and thus change) the product

– These changes cause delays in the project

Meeting schedule and cost goals, without compromising performance is a technical problem, with a human dimension

– Project professionals tend to be perfectionists

– Pride in workmanship leads the team member to

improve (and thus change) the product

– These changes cause delays in the project

Human Factors and the Project TeamHuman Factors and the Project Team

Human Factors and the Project TeamHuman Factors and the Project Team Motivating Project Team Members:

– The project manager often has little control over the economic rewards and promotions of project team members, but this does not mean he/she cannot motivate members of the team

– How are technical employees motivated? Recognition Achievement The work itself Responsibility Advancement The chance to learn new skills

Motivating Project Team Members:– The project manager often has little control over the

economic rewards and promotions of project team members, but this does not mean he/she cannot motivate members of the team

– How are technical employees motivated? Recognition Achievement The work itself Responsibility Advancement The chance to learn new skills 7

Human Factors and the Project TeamHuman Factors and the Project Team Empowerment of project teams is also a motivational factor:

– 1. It harnesses the ability of the team members to manipulate tasks so that project objectives are met. The team is encouraged to find better ways of doing things

– 2. Professionals do not like being managed. 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

Empowerment of project teams is also a motivational factor:– 1. It harnesses the ability of the team members to

manipulate tasks so that project objectives are met. The team is encouraged to find better ways of doing things

– 2. Professionals do not like being managed. 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 8

SummarySummary

There are various organizational structures that can be used for projects including:

– Projects within functional organizations, pure

project and matrix structures

Selecting the appropriate project organizational

form is critical to the success of the project

There are various organizational structures that can be used for projects including:

– Projects within functional organizations, pure

project and matrix structures

Selecting the appropriate project organizational

form is critical to the success of the project

SummarySummary A useful procedure for selecting an organizational form is:

– Identify the specific outcomes desired

– Determine the key tasks to attain these outcomes

– Sequence the key tasks

– Determine which project subsystems will be assigned which steps and which subsystems must closely cooperate

– Identify any firm or project characteristics

– Consider all pros and cons, then make a decision

A useful procedure for selecting an organizational form is:

– Identify the specific outcomes desired

– Determine the key tasks to attain these outcomes

– Sequence the key tasks

– Determine which project subsystems will be assigned which steps and which subsystems must closely cooperate

– Identify any firm or project characteristics

– Consider all pros and cons, then make a decision

Sample ExerciseSample Exercise Consider the following statements of sets of

project and decide which form of project structure would be most appropriate for managing these projects.

Consider the following statements of sets of project and decide which form of project structure would be most appropriate for managing these projects.

Designing and developing a new product

Matrix structure!

Sample ExerciseSample Exercise Consider the following statements of sets of

project and decide which form of project structure would be most appropriate for managing these projects.

Consider the following statements of sets of project and decide which form of project structure would be most appropriate for managing these projects.

Designing and implementing the ISO 9000 quality system

Functional structure!

Sample ExerciseSample Exercise

In what type of organization structure is team building likely to be most difficult?

Matrix structure!

Sample ExerciseSample Exercise Project Management organization structure

are design to perform specific functions in the most efficient manner, the major factors that should influence the development of a project management organization are:

Project Management organization structure are design to perform specific functions in the most efficient manner, the major factors that should influence the development of a project management organization are:

•Type of Project

•Type of Staffing

•Communication Channels

•Attitude toward Risks

Define the project objectives Determine the key tasks to attain these objectives Arrange the key tasks by sequence and

decompose them into work packages (WBS) Determine which organizational units are required

to carry out the work packages and which units will work particularly closely with which others

List any special characteristics or assumptions associated with the project

Select a structure form most advantages to the project

Sample ExerciseSample Exercise

What are the steps in forming a Project Management organization structure:

pmchap3 organization structure

triple constraints theory

clean undercarriage

description position

douglas mcgregor theory

accounting support group

higher skilled workers

major outcomes desired

power plant dept

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