Ch. 4 Project Organization
Organizational
Issues
Covered
Tie project to parent Chap 4
organization
Organize Project
proper
Chap 4 , 5
Organize Project
neighborhood
Beyond scope of
this text
Ch 4.0: Four Drivers of Project
Management Growth
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Speed to market
Complexity and uniqueness of new
inventions
Disturbances/expansions of the
enterprise
Accountability of non-routine tasks
Ch. 4.0 Chapter Sections
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Hybrid project/functional organization
Pure project organization
Matrix organization
Choosing an organizational form
The project team
Human factors and the project
Ch. 4.1 Hybrid Project /
Functional Organization
University of Cincinnati organization chart
Ch 4.1: Advantages of Hybrid
Organization

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Highly flexible staff use
Ease of switching experts among
projects in same functional division
Specialist pooling in functional division
Technological continuity
Quicker career advancement of
specialists
Ch 4.1: Disadvantages of
Hybrid Organization

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Project not client focused
Different goals between functional parent division
and project
PM competes with FM for role of central project
responsibility
Slow response to client needs
Sub-optimization along parent functional division
needs
Weaker project team motivation than in pure project
organization
Not a holistic approach to project management
Ch 4.2: Pure Project
Organization
Ch 4.2: Advantages of Pure
Project Organization
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PM with full project authority
Team directly responsible to PM
Shorter communication lines than hybrid
organization
Skill pools of technical experts
Higher project commitment of team
Faster decision making
Unity of command makes life easier for staff
Organization is structurally simple and flexible
Holistic approach to project management
Ch 4.2: Disadvantages of Pure
Project Organization
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Duplication of staff among projects
Stockpiling of expertise and equipment to
assure critical state never reached
Experts develop too much depth --- not
enough breath
Inconsistency in carrying out policies and
procedures
Projectitis: excessive attachment of team to
project
Team worries of “life after the project ends”
Ch. 4.3: The Matrix
Organization
Ch. 4.3: From Project Emphasis
to Functional Emphasis
Project
Functional
PM role
Emphasis Division provides
Strong
People
Controls people
individually
Balanced Functional Units
Controls
functional units
Weak
Coordinates
project activities
Capacity
Ch. 4.3: Matrix Organization
Advantages

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PM sole responsible for project managing
Access to entire technology of firm
No worry about “life after project”
Rapid response to client need
Consistent with policies, procedures of parent
firm
Company wide sharing of resources
Flexible between “weak” and “strong” matrix
organization
Ch. 4.3 Matrix Organization
Disadvantages





Political infighting: PM against FM
Political infighting: PM against PM
Projects resist shutdown
Over reliance on negotiating skills of PM
No unity of command
Ch. 4.4: Mixed Organizational
Systems (I)
Coexistence of pure project and functional
organization to form a mixed system
Ch. 4.4: Mixed Organizational
Systems (II)
Addition of Project staff office to form a mixed
system
Ch. 4.5: Choosing an
Organizational Form
Organizational Project type
form
Technology
type
Functional
Large capital
investment
In-depth
Matrix
Integration of
Reasonably
functional areas complex
Pure Project
Many similar
projects
Routine or
highly unique
Ch 4.5: Choosing an
Organizational Form
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Define outcome (goals) of project
Find “functional home” closest associated
with key tasks
Sequence and decompose key tasks into
“work packages”
Assign appropriate organizational units to
“work packages”
Consider any special project characteristics or
assumptions
Choose a project structure
Ch 4.5: Project Management
in Practice (Caltrans)
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Create project management office (PMO)
CULTIVATE (not designate!) PMs
Use outside resources and help
Develop a uniform work breakdown structure
Create EMPOWERED project management
forums
Use requirement analysis to select project
management software
INVOLVE (not placate!) Top management
Ch 4.6: Risk Management
Sub-processes
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Risk management planning
Risk identification
Qualitative risk analysis
Quantitative risk analysis
Risk response planning
Risk monitoring and control
PMBOK® guide, 2000 edition
Ch. 4.6: Makeup of Sample Risk
Management Group (RMG) for New
Product Development
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Scientist familiar with new product
Market specialist
Manufacturing specialist
Product safety expert
Patent attorney
Manager (program and/or HR)
Government relations expert
Ch 4.6: Contents of Risk
Management Knowledge Base
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All possible project environments
All risk factors identified in previous projects
All risks identified by RMG
All “categories” and “key words” to identify
risk
All qualitative and quantitative risk estimates
for the project
Minutes (including action items) of all RMG
meetings
Actual outcome of all estimated project risks
Ch 4.6: Risk Evolution Along
Project Life Cycle


Feasibility:
external risks, tied to overall state of
the technology
Planning:
internal risks, tied to specific project
technology
Ch. 4.6: Project Management
Office (PMO) Statistics
Founded
before ‘97
Govt.
75%
Public
15%
All
All
# Employees
# Projects
>1000
>300 <300 >11
80%
10%
>40
10%
67% 25%
Ch. 4.6: Reasons for Initiating
PMOs
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65%: need for consistent project
management
50%: avoid project delays and help
with planning
40%: contain cost, improve project
performance
25%: improve customer satidfaction
Ch. 4.6: PMO Level of Service
Offered
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78%
64%
58%
50%
50%
28%
follow standard project processes
consulting help on projects
training and mentoring
project tracking
risk portfolio management
maintain pool of PMs
Ch. 4.6: Strategic Reasons for
Establishing PMOs
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
Alignment of project goals with
organizational goals
Gradual assimilation of good project
management practices
Cultural change from functionally
managed organization to project
oriented organization
Ch. 4.6: Why Organizations
Establish PMO’s
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To establish and keep good project
management processes
To distribute project management expertise
through organization
To improve project success rate
To reduce project lead times
To consolidate project data
To own an “enterprise project management”
system
Ch. 4.6: PMO Tasks (I)
1.
2.
3.
4.
5.
Establish and enforce good project
management processes
Assess/improve organizations project
management maturity
Acquire enterprise project
management system
Train and certify PMs
Cultivate competent PMs
Ch. 4.6: PMO Tasks (II)
6.
7.
8.
9.
10.
11.
Consulting services for company PMs
Help PMs with administrative details
Risk evaluation
Product “fit” for organization
Monitor market changes and alert PMs
of potentially needed scope changes
Review and limit organizations
OVERALL project risk portfolio
Ch. 4.6: PMO Tasks (III)
12.
13.
14.
15.
16.
17.
Audits and project reviews
Keep project management database
Help launch new projects
Recognize and reward project
management excellence
“Home” for PMs
Disseminate project management
knowledge
Ch. 4.6: Timetable for
Implementing PMO Tasks
Timeframe
PMO tasks
First few months
1., 7., 16.
First year
2., 3., 5., 8., 9.,
14., 15.
Long term
4., 6., 10., 11.,
12., 13., 17.
Ch. 4.6: Completeness of PMO
Completeness
PMO tasks
Lower level
2.
Middle level
1., 4., 5., 6., 7., 8.,
13., 16.
Upper level
3., 9., 10., 11.,
12., 14., 15., 17.
Ch. 4.6: PMO Tasks As a
Function of Reporting Level
Reporting level
PMO tasks
FM (IT or
Engineering)
5., 6.
VP (business
level)
1., 4., 16.
CEO (strategic
level)
2., 3., 7., 8., 9., 10., 11.,
12., 13., 14., 15., 17.
Ch. 4.6: How to Build a PMO
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Get backing and sponsorship from
senior management (VP or at least FM)
Pilot project in VP/fm’s area of control
In second iteration, expand PMO to
cover the whole organization
PMO will self propagate due to it’s
usefulness
Ch. 4.6: Potential PMO
Problems

Unrealistic expectations:


PMO may not save a project already in
trouble
PMO cannot correct upper management
failures such as:
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Inflated project goals
Insufficient project support
Inadequate resource availability
Ch. 4.7 Project Team Key Staff
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Project engineer (design / analysis)
Manufacturing engineer (production)
Field manager (at customer site)
Contract administrator (paperwork)
Project controller (cost)
Support services manager (subcontracts)
Ch. 4.7: Typical Organization
for Engineering Projects
Ch. 4.7: How to Staff a Project
Team
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Break down work structure into tasks
Assess skills needed for each task
Recruit skilled workers from functional
departments
Negotiate with employee AND FM to get
worker for project
If no local skill available subcontract!
Ch. 4.7: Team Members Who
Report to PM or Deputy PM
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Project engineer (often the deputy PM)
Senior project team members
Members who require close
communication with PM
Members with essential, rare skills
Ch. 4.7: Weak Matrix Team
Building
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One or two skilled full time team
members
“Capacity” from functional divisions
Several project components supplied by
functional divisions in the form of
deliverables
Ch. 4.8: Human Factors in
Meeting Deadlines
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Delivering adequate – not perfectionist - work
quality saves time
Team members motivated by:
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Recognition
Achievement
Work itself
Responsibility
Advancement
Chance to learn new skill
Ch. 4.8: Recently Popular
Project Management Styles
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Management By Objective (MBO)
workers take responsibility for tasks
Continuous Improvement Teams (CIT)
Total Quality Management (TQM)
Self Directed Teams (SDT)
Ch. 4.8: Empowerment of
Project Teams - Advantages
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Lets team members manipulate tasks so
objectives can be met
Avoids micromanagement
Team members accept responsibility
May result in synergistic solutions
Timely feedback on performance
Empowerment is a tool for PM to
evaluate team performance
Ch. 4.8: Pillars of Team
Building
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Action plan:
also acts as control mechanism
Mutual dependency:
team members hold each other
accountable for reaching goals
Ch. 4.8: Essential Company
Support for Team Building
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Effective rewards
Individual and team performance
feedback
Individual and team goal setting
Ch. 4.8: Conflict Sources in
the EARLY Stages of the PLC

Project Formation:
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Priorities  clearly define plans
Procedures  develop a charter
Schedules  early schedule development
Building Phase:

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Priorities  status review sessions
Schedules  work breakdown packages
Procedures  contingency planning
Ch. 4.8: Conflict Sources in
the LATE Stages of the PLC

Main Program:

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Schedules  continuous monitoring of work
Technical  early resolution of problems
Labor  early staffing forecasts
Phaseout:

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Schedules  close schedule monitoring
Personality  loosen up high stress situations
Labor  reallocate staff upon end of project
Ch. 4.8: Number of Conflicts
During a Sample Project
Phase of Project
Start Early
Main
27
35
24
26
27
15
18
26
31
21
25
25
20
13
15
25
29
36
16
19
15
Late
16
9
11
17
11
30
17
Sources of Conflict
Project priorities
Admin procedures
Technical tradeoffs
Staffing
Support cost estimates
Schedules
Personalities
Ch. 4.8: Conflict Intensity
Along Project Life Cycle
Ch. 4.8: The Name-Only-Team
(NOT)
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PM:
conflict avoider  compromise rarely
solves problems
Team members:
discipline oriented individuals  prone
to political infighting
Result:
workgroup math is 2+2=3 or less!
Ch. 4.8: Conflict Management

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PM encourages openness
PM sets role model in conflict resolution
PM harnesses energy of conflict
When outside pressure too high, avoid
face-to-face meetings