MANAGEMENT OF
ENGINEERING PROJECTS
TYPES OF
ORGANIZATIONS, PMO,
AND STAKEHOLDER
MANAGEMENT
Dr. Tayyiba Rashid
PhD Manufacturing Engineering (Contd…)
MSc Manufacturing Engineering
BSc Industrial & Manufacturing Engineering
Certified Primavera P6
1
Recap from last lecture
• A project is not a physical object, nor the end
result, it has something to do with going-on,
whether we build a high technology process
plant or only hold an election.
• A project is initiated to achieve the mission,
whatever the mission may be. A project is
completed as soon as the mission is fulfilled.
• A combination of human and non human
resources pooled together in a temporary
organization to serve specific purpose.
2
Recap from last lecture
• A project is a temporary endeavor undertaken
to create a unique product, service or result.
• Project is a group of tasks performed within
definable timetable in order to meet a
specific set of goals.
• Projects can be large or small and take a long
time or short time to complete.
• Operation is work done to sustain business.
3
Recap from last lecture
• Projects are
pool.
➢Fixed set of objectives
➢unique,
➢Team work
➢finite,
➢Life cycle
➢complex,
➢Made to order
➢heterogeneous,
➢non-repetitive and ➢Risk and uncertainty
➢Subcontracting
require
➢multiple resources ➢Upset status quo
from a finite resource
4
Recap from last lecture
• Projects are SMART
Specific
Measurable
Time-limited
Attainable
Realistic
Project Management
Operations Management
Duration
Fixed
Continuous
Improvement
Radical improvement to face
existing competitor
Incremental improvement to reduce
cost or add value
Major Impact
Future
Present
Goal
Creation of new thing
Maintenance of existing thing
5
Determinants of Project Success
6
Determinants of Project Success
7
Project Management Maturity
Model
• PMMM allows an organization to benchmark the
best practices of successful PM firms and then
define a systematic route for improving these
practices.
• Some of the models are:
• SEI’s (Software Engineering Institute)
• Centre for Business Practices
• Kerzner’s project management maturity model
• ESI (Education Service Institute)
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9
Kerzner Project Management
Maturity Model
10
11
12
13
14
Success of Project Depends Upon
1) Strategy
a. Formulating (Developing mission and vision)
b. Implementing (SWOT Analysis)
c. Evaluating Cross-functional Decisions to achieve
objectives ( market leadership through cost,
innovative product and superior quality)
2) Structure
3) Organization’s culture
15
Projects Reflect Strategy
• Projects are stepping stones of Corporate
Strategy. Strategic development is a driving
force behind project development
A firm wishing to
……may have a project like
Redevelop products or processes
To reengineer products or processes
Changes strategic direction or product
portfolio configuration
To create new product lines
Improve cross-functional organizational
communication and efficiency
To install an enterprise IT system
16
Example of Relationship between
strategy and project
• Mission: to become the number one company in the world in the AC
market.
• Objectives
1.
2.
3.
15 percent return on investment
Non-decreasing dividends to be paid to stakeholders
Good social image
– To achieve the objectives, strategies may be defined like
•
•
•
Focus on the existing market or
Focus on a new market or international market
Develop a new product line
• Goals are set.
• Programs are defined e.g. product cost improvement plan, working
capital improvement plan, image assessment programs, and product
development programs
• Finally projects are defined under programs
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ORGANIZATIONAL
STRUCTURE
Projectized
Strong
Matrix
Balanced
Matrix
Weak
Matrix
Functional
FUNCTIONAL ORGANIZATION
❑ The organization is grouped by areas of specialization within different functional
areas.
❑ Projects generally occur within a single department.
❑ Information required from other department will be routed through departmental
heads.
❑ Team members complete project work in addition to normal department work.
• Advantages:
•
•
•
•
•
Specialization- Better division of labour takes place which results in specialization of function
and it’s consequent benefit.
Effective Control- Management control is simplified as the mental functions are separated
from manual functions. Checks and balances keep the authority within certain limits.
Specialists may be asked to judge the performance of various sections.
Efficiency- Greater efficiency is achieved because of every function performing a limited
number of functions.
Economy- Specialization compiled with standardization facilitates maximum production and
economical costs.
Expansion- Expert knowledge of functional manager facilitates better control and
supervision.
• Demerits of Functional Organization
•
•
•
•
•
Confusion- The functional system is quite complicated to put into operation, especially when
it is carried out at low levels
Lack of Co-ordination- Disciplinary control becomes weak as a worker is commanded not by
one person but a large number of people. Thus, there is no unity of command.
Difficulty in fixing responsibility- Because of multiple authority, it is difficult to fix
responsibility.
Conflicts- There may be conflicts among the supervisory staff of equal ranks. They may not
agree on certain issues.
Costly- Maintainance of specialist’s staff of the highest order is expensive for a concern.
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PROJECTIZED ORGANIZATION
The entire company is organized by projects.
The project manager has control of projects.
Personnel are assigned and report to a project manager.
Team members complete only project work and when its over they don't have
HOME.
❑ Communication generally occurs only within the project.
❑
❑
❑
❑
▪ Here, the project manager
is in charge of the project,
and has full authority over
it. Everyone in the team
reports to him. The
projectized organization
structure is the opposite to
the functional organization
structure.
▪ Here, either there will be
no functional manager, or if
he exists, he will have a
very limited role and
authority.
• Advantages of a Projectized Organized Structure
• Since the team members directly report to the project
manager, there is a clear line of authority. This reduces
conflict and makes decision making faster and more flexible.
• Due to a single reporting system, there are shorter lines of
communication which creates strong and effective
communication within the project management team.
• Due to a single authority, less time is consumed in
communication, and the response to stakeholders’ concerns is
fast.
• Due to a sense of urgency, milestones, good communication,
and cooperation, the learning curve is faster for any new
member.
• Team members become versatile and flexible due to
experience in different kinds of projects.
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• Disadvantages of a Projectized Organization Structure
• Since the project manager has full authority and power over his team
members, he can become arrogant. A lack of power is a problem for
project managers in functional organizations, while the abundance of
power of a project manager can be a problem for team members in
projectized organizations.
• In projects, there is always a deadline and usually a tight schedule, which
makes the work environment stressful.
• If the organization has multiple projects, there can be poor
communication among them, causing resources to be duplicated.
• There is a sense of insecurity among the team members, because once the
project is completed, they feel they may lose their jobs. Therefore, they
tend to be less loyal towards the organization.
• The cost of employees and equipment can be higher because you may be
hiring skilled people and specialized equipment for a shorter period of
time. Moreover, if the project gets stretched out, the cost of equipment
and other resources can be much higher.
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MATRIX ORGANIZATION
▪
Organizing Projects: Matrix Structure
– Hybrid organizational structure (matrix) is overlaid on the normal functional structure.
• Two chains of command (functional and project)
• Project participants report simultaneously to both functional and project managers.
– Matrix structure optimizes the use of resources.
• Allows for participation on multiple projects while performing normal functional duties.
• Achieves a greater integration of expertise and project requirements.
President
Program
manager
Functional Manager
Manufacturing
Marketing
Finance
R&D
Personnel
PM1
3
1½
½
4
½
PM2
1
4
¼
1½
¼
PM3
0
½
3
½
1
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WEAK MATRIX ORGANIZATION
❑
❑
❑
❑
❑
Two Bosses
Team members reports to Project Manager and Functional Manager
Team members do project work in addition to normal departmental work
Power rests with functional manager
Project Manager plays a role of:
❖ Project Expediter: Cannot take decision. Staff assistant and Communication
coordinator.
❖ Project Coordinator: Similar to Project Expeditor except has some power to
take decision.
STRONG MATRIX
❑Power rests with the Project Manager
BALANCED MATRIX
❑ Two Bosses
❑ Team members reports to Project Manager and Functional Manager
❑ Team members do project work in addition to normal departmental work
❑ Power is shared between the functional and project manager
Project
Characteristics
Organizational Structure Type
Functional
Weak Matrix
Project manager’s
authority
Percent of
performing
organization’s
personnel assigned
full-time to project
work
Who controls the
project budget
Matrix
Balanced
Matrix
Low to
Moderate
15-60%
Project
Strong
Matrix
Moderate
to high
50-95%
High to
almost total
85-100%
Little or none
Limited
Virtually none
0-25%
Functional
manager
Functional
manager
Mixed
Project
manager
Project
manager
Project manager’s
role
Part-time
Part-time
Full-time
Full-time
Full-time
Common title for
project manager’s
role
Project
Coordinator/
Project Leader
Project
Coordinator/
Project
Leader
Part-time
Project
Manager/
Project
Officer
Part-time
Project
Manager/
Program
Manager
Full-time
Project
Manager/
Program
Manager
Full-time
Project
Part-time
management
administrative staff
PMBOK Guide, 2000, 19, and PMBOK Guide 2004, 28.
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