project management - week 03i

7/28/2019 Project Management - Week 03i

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Projects & Organizations Environment (1)

The Functional Organization

The activities constituting a project are performed respectively bythe relevant functional unit of the organization. In this case,coordination of project activities are undertaken by the higherfunctional levels of management

The Functional Matrix

An individual is selected who will oversee and coordinate theproject activities across the various functional levels of the

organization. Functional managers are responsible for managingtheir respective segments of the project, decide who does whatand when the project is to be completed, and evaluate theparticipants. Their influence is greater than that of the projectmanager, who has indirect authority to expedite and monitor theproject


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The Balanced Matrix

An individual is selected who will manage the project across thevarious functional levels of the organization and who will interactwith the functional managers on an equal basis and jointlyapprove technical and operational decisions. The project manager

defines what needs to be accomplished and the functionalmanagers decide how it will be accomplished within the plan,various designated functional inputs, standards and schedulesestablished by the project manager

The Project Matrix

A project manager is selected to oversee the completion of theproject in the functional levels of the organization. He or she isultimately is responsible for



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the projects completion, has final say on major project decisions

and controls most aspects of the project, including the assignmentof functional personell, what they do and when. The functional

managers maintain title over their respective personell and have

consultation rights

The (dedicated) Project Team

A project manager is selected to head a core group of personelfrom several functional units of the organization and who are allassigned to work full-time on the project in question



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Project Coordination

Example of a Typical Functional Organization

Corporation X

Human

Resources

Marketing Engineering ProcurementManufacturing

Electronics

Engineering

Customer

Service

Finance &

Administration

Software

Engineering

Mechanical

EngineeringDesign Purchasing

Receiving

& Inspection

Domestic

Sales

International

Sales

Fabrica-

tionAssembly Testing

Production

Scheduling


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Advantages of the Functional Approach

No major alteration in the enterprises existing organizationalstructure is necessary as functional units are already established

Flexibility in assigning personell in different functional units andwithin one functional unit - to work on projects

Focussed utilisation of expertise by a functional unit if the projectscope is narrow

Maintainence of normal career paths in a functional division or inthe divisions where the specialists working on a project are based


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Disadvantages of the Functional Approach

If a project has a comparatively broad scope, the functional unitsmay have different priority perceptions

Inadequate integration across functional units because functionalspecialists may be concerned primarily with their specific part ofthe project work and not the whole project

Project completion times tend to be higher due to therequirement of channeling project information and decision-making through the normal management channels. Also, thelack of horizontal communication may lead to rework as actionsperformed may require correction

Weak motivation of the functional personell working on projects.Projects may be viewed as additional burdens not directly linkedto professional development or advancement.

Lack of identification with, and committment to the project


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Example of a Dedicated Project Team

Corporation X

Human

Resources

Marketing Engineering ProcurementManufacturing

Finance &

Administration

Project Manager

Project Team


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Advantages of the Dedicated Approach

No structural impact on the functional organization onlytemporary siphoning away of functional specialists

Project completion time is comparatively smaller due to projectpersonel devoting their efforts to the project in question full-time

and also because the flow of information and decision-making isgenerally not hindered by hierachies

Motivation, feeling of identification and cohesiveness are strongin the project. Project personell share a common goal and have a

collective responsibility towards ensuring realization of this goal

Cross-functional cooperation is strongly encouraged and promoted


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Disadvantages of the Dedicated Approach

Larger expense is involved because resources are assigned to the

project on a full-time basis. Across projects, this may result in aduplication of infrastructure and work

Projectitis project personell evolve a collective identityencapsulating themselves from the enterprise, giving rise to a non-constructive us (project personell) and them (rest of theenterprise) outlook. In some cases this not only undermines the

integration of the project effort back into mainstream operationsbut also the subsequent assimilation of project personell back intotheir respective functional units

The project may become overdependent on the gamut of skills,expertise and experience held by the project personel and may notseek to incorporate skills, expertise and experience held by

individuals and organizational entities outside the project

Assimilation of project personel back into their respective functional unitsmay prove difficult due to their prolonged absence from their units and thechallenge of keeping up with the developments which have taken place inthe functional units during the project period


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ProjectCoordination

The Projecticized Organization

Chief Executive

Project

Manager

Project

Manager

Project

Manager

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

ProjectCoordination


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Example of a Projecticized Organization

Corporation X

MarketingHuman

Resources

Finance and

Administration

Legal

Project Manager

(Project A)

Project Manager

(Project B)

Engineering Manufacturing Procurement Engineering Subcontractors(X, Y, Z)

Manufacturing Procurement

Other

Projects

Other

Projects


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The Functional Matrix Organization

Chief Executive

Functional

Manager

Functional

Manager

Functional

Manager

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Project

Coord.ProjectCoord.


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The Balanced Matrix Organization

Chief Executive

Functional

Manager

Functional

Manager

Functional

Manager

Staff

Staff

Staff

Staff

Staff

Staff

Staff

StaffProject Manager

ProjectCoord.

ProjectCoord.


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Project

Coordination

The Strong Matrix Organization

Chief Executive

Functional

Manager

Functional

Manager

Functional

Manager

Staff

Staff

Staff

Staff

Staff

Staff

Staff

StaffStaff

Manager of

Project Managers

Project

Manager

Project

Manager

Project

Manager


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The Project Matrix Orgaization Form

General Manager

Lead Project

Manager

Functional

Manager A

Functional

Manager B

Functional

Manager C

ProjectManager 1

Project

Manager 2

ProjectManager 3

Project

Manager 4

FI

FI

FI

FI

FI

FI

FI

FI

FI

FI

FI

FI


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Example of a Project Matrix Organization

General Manager

Lead Project

ManagerENGINEERING MANUFACTURING MARKETING

PM X

PA E1 E2 E3 MA1 MA2 MA3 M1 M2 M3

PM Y

PM Z

1 2 1 3 2 1

1 3 1 4 0,5 1

0,5 1 2 0,5


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Advantages of the Matrix Organization

Sharing of resources across multiple projects and within functionaldivisions, enabling functional personell to divide their attentionacross multiple projects and reducing duplication of resourceswhich is observed in dedicated project teams

Stronger project focus by having a project manager who performsa coordinating and integrating role across functional units, andthereby enabling a more holistic approach to problem-solving thanis normally possible in the purely functional environment

Flexible use of the enterprises resources and expertise

Accessibility of the entire spectrum of the functionalenvironments technology, expertise and experience

Functional personell maintain close ties with their respective units


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Disadvantages of the Matrix Organization

Violation of the established hierarchical principle unity of

command and stress arising from issuance of diverging orconflicting orders

Conflict potential between project managers and functionalmanagers can be high due to diverging agendas, unclear patternsof authority, accountability etc., occasionally engendering apersonal animosity

Unhealthy resource-sharing competition over equipment, expertsetc. may arise between project managers who each areendeavouring to acquire what they consider as being best for their

respective project(s)

Difficulty facing project managers in getting agreements acrossfunctional delineations


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Characteristics of a Weak Matrix

Organization (1)

Failure to understand the key principles and roles in the matrixorganizational environment

Distrust in organizational forms which are not based on Fayolsunity of command

Apprehensions of functional managers over the apparentsuperority of the project goals over those of the functional entity

Senior management shortcomings in terms of clearly delineatingin writing the formal and reciprocal roles of all the key managers

involved in the project


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Lacking understanding by the project team to understand the roleand responsibilities of the functional professionals and theirmanagers

Incompetent project and functional managers / project managerswho manage less and coordinate more / decision referal byproject managers to senior management

Inadequate stakeholder management

Lack of trust, integrity, loyalty and committment by project team

members

Characteristics of a Weak Matrix

Organization (2)


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Prerequisites for a Successful Matrix

Organization Appropriate empowerment for dedicated project managers,

unambiguous role definition and clear patterns of leadership,responsibility and accountability

Prevalence of well-established lines of communication and broadendorsement of free communication throughout the enterprise,especially in regard to projects and project stakeholders

Explicit understanding of the interdependant roles of bothfunctional as well as project managers regarding pursuit ofprojects

Functional managers endorse and are committed to the matrixorganizational design and the corresponding allocation offunctional resources for projects

Prevalence of an organizational culture that encourages and

supports the matrix organizational form


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Org. Structure

Project

Characteristics

Functional

Matrix

Weak Balanced Strong Projecti-

cized

ProjectManagers

Authority

Little orNone

Limited Low toModerate

Moderate toHigh

High toAlmost Total

Resource

Availability

Little or

None

Limited Low to

Moderate

Low to

Moderate

High to

Almost Total

Who Controls

Project Budget

FunctionalManager

FunctionalManager

Mixed ProjectManager

ProjectManager

Project

Managers Role

Part-Time Part-Time Full-Time Full-Time Full-Time

ProjectManagementAdministrativeStaff

Part-Time Part-Time Part-Time Full-Time Full-Time


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Factors Influencing the Project

Management Organizational Environment

The projects size

The projects strategic importance

The projects innovation requirement

The projects level of required integration across functionaldelineations

The project environments complexity

The project budget and time constraints

The project resource requirement level of stability

In general the higher the level of these factors, the greater is the

requirement of autonomy and authority for the project manager and

his team in order to ensure Success (project matrix or dedicated

project team)


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Empirical Assessment of the Respective

Project Organization Forms

Empirical research suggests that the Project Matrix and Project

organization modes are the most effective means of undertaking

projects

Functional

Organization

Functional

Matrix

Balanced

Matrix

Project

Matrix

Project

Organizaton

Very

Ineffective

Ineffective

Effective

Very

Effective

Construction

New Product

Clifford F. Gray / Erik W. Larson, Project Management: The Managerial Process, 2. ed., 2003, p. 71

project management - week 03i

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