OM480
Project Management and
Organizational Structures
(With Material from the Text Authors)
Overview
• Organizational Project Management
• Picking the “Best” Structure
Functional Organizations
Delta Manufacturing, Inc.
President
Project
coordination
Human
resources
Marketing
Engineering
Electronics
engineering
Customer
service
Finance and
administration
Domestic
sales
Software
engineering
Mechanical
engineering
International
sales
Manufacturing
Design
Fabrication
Assembly
Procurement
Purchasing
Receiving &
inspection
Testing
Production
scheduling
Dedicated Project Team
Zeus Electronics, Inc.
President
Human
resources
Marketing
Engineering
Finance and
administration
Manufacturing
Procurement
Project manager
Project team
Project Organization Structure
Central Engineering Systems, Inc.
President
Other
projects
Marketing
Human
resources
Finance and
administration
Legal
Alpha Project
Project Manager
Engineering
Electrical
Mechanical
Software
Manufacturing
Fabrication
Assembly
Test
Other
projects
Beta Project
Project Manager
Procurement
Engineering
Systems
Hardware
Software
Manufacturing
Assembly
Test
Subcontractors
Subcontractor X
Subcontractor Y
Subcontractor Z
Procurement
Matrix Organization Structure
Zeus Electronics, Inc.
President
Human
resources
Director of
projects
Project
administration
Design
engineering
Finance
Manufacturing
Engineering
Electronics
engineering
Project A
project
manager
1
2
1
Project B
project
manager
1
3
1
Project C
project
manager
1/2
1
Software
engineering
1
Mechanical
engineering
Technical
documentation
Assembly
Testing
Marketing
Quality
2
1
2
1/2
1
1
1
1
1
1
Customer
service
Domestic
sales
International
sales
1
2
1
1/2
2
2
Projects and Organizational Change
• Economic Conditions
– Globalization
– Information Flows
• Technology Landscape
– Growth
– Obsolescence
• Competition
– See Above
• Interdependent Systems
– Moving “Bottlenecks”
The New PM Realities
• Shorter Timelines
– Years to Months
• Organizational Uncertainty
– “Turf battles”
• Employee Attrition
– Downsizing, Mergers, Acquisitions
– “Free Agency”
• FUD
• Cost Containment Efforts
Division of Project Manager and Functional
Manager Responsibilities in a Matrix Structure
Project manager
Negotiated issues
Functional manager
What has to be done?
Who will do the task?
How will it be done?
When should the task be
done?
Where will the task be
done?
How much money is
available to do the task?
Why will the task be done?
How will the project
involvement impact normal
functional activities?
How well has the total
project been done?
Is the task satisfactorily
completed?
How well has the functional
input been integrated?
Key Dimensions Defining an
Organization’s Culture
Job
Individual
Task
Independent
Loose
Low
Performance
Low
Means
1. Member identity
Organization
2. Team emphasis
Group
3. Management focus
People
4. Unit integration
Interdependent
5. Control
Tight
6. Risk tolerance
High
7. Reward criteria
Other
8. Conflict tolerance
High
9. Means-ends orientation
Ends
Internal 10. Open-system focus
External
Cultural Dimensions of an Organization
Supportive of Project Management
Job
Individual
Task
Independent
Loose
Low
Performance
Low
Means
Internal
1. Member identity
2. Team emphasis
3. People focus
4. Unit integration
5. Control
6. Risk tolerance
7. Reward criteria
8. Conflict tolerance
9. Means-ends orientation
10. Open-system focus
Organization
Group
People
Interdependent
Tight
High
Other
High
Ends
External
Network of Relationships
Other
organizations
Top
management
Project
sponsors
Customers
Project
managers
Government
agencies
Project
manager
Functional
managers
Contractors
Administrative
support
Commonly Traded
Organizational Currencies
Task-related currencies
Resources
Assistance
Cooperation
Information
Lending or giving money, budget increases, personnel, etc.
Helping with existing projects or undertaking unwanted
tasks.
Giving task support, providing quicker response time,
or aiding implementation.
Providing organizational as well as technical knowledge.
Position-related currencies
Advancement
Recognition
Visibility
Network/contacts
Giving a task or assignment that can result in promotion.
Acknowledging effort, accomplishments, or abilities.
Providing a chance to be known by higher-ups or significant
others in the organization.
Providing opportunities for linking with others.
Source: Adapted from A. R. Cohen, and David L. Bradford, Influence without Authority
New York: John Wiley and sons, 1990). Reprinted by permission of John Wiley & Sons, Inc.
Commonly Traded
Organizational Currencies
Inspiration-related currencies
Vision
Being involved in a task that has larger significance for the
unit, organization, customer, or society.
Having a chance to do important things really well.
Doing what is “right” by a higher standard than efficiency.
Excellence
Ethical correctness
Relationship-related currencies
Acceptance
Personal support
Understanding
Providing closeness and friendship.
Giving personal and emotional backing.
Listening to others’ concerns and issues.
Personal-related currencies
Challenge/learning
Ownership/involvement
Gratitude
Sharing tasks that increase skills and abilities.
Letting others have ownership and influence.
Expressing appreciation.
Source: Adapted from A. R. Cohen, and David L. Bradford, Influence without Authority
New York: John Wiley and sons, 1990). Reprinted by permission of John Wiley & Sons, Inc.
Projects and Organizational Effectiveness