INEN261:
Chapter # 5
The Project and the Organizational
Structure
Presented by:
Jasim Alnahas
Chapter Learning Outcomes
If you complete the given assignments for this
chapter you will:
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Understand Organizational structures and how
they vary between different institutions
Understand the importance of project
organization and its impact on project success
and the activities of the Project Manager
Understand how effective project managers
build a strong project team
Lets move beyond the Project Manager
to the organization of the project
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Organization must be discussed at two levels
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How is the Project Team organized to accomplish the
project work?
How does the Project Team fit within the overall
organization of the enterprise (or enterprises)
We will start with fitting the team into the overall
organization
Traditional Forms of Organization
4.
Functional
Projectized
Matrix
Composite
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Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition,
Wiley & Sons Inc., 2012
1.
2.
3.
Think of enterprise organizational structure
as fitting somewhere within a continuous
spectrum with two endpoints:
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A purely functional organization
A purely “projectized” organization
Purely
Functional
Purely
Projectized
A “pure” organization of either extreme rarely exists.
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Projects in a Functional Organization
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Make it a part of one of the functional
divisions
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More than one choice may exist
If support from other areas is needed, they are
expected to help support the project
Another way is to assign the work to all
divisions with the top management
overseeing the effort
The functional (classical) organization
Executive Office
Financial
Operations
Engineering
Manufacturing
Materials Supply
Shipping
Packing
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Shipping
Marketing
Administration
Engineering organizations (can also be
purely functional)
Executive Office
Financial
Operations
Electrical
Department
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Engineering
Mechanical
Department
Marketing
Civil
Department
Administration
Advantages
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Maximum flexibility in the use of staff
Experts can be utilized by many different
projects
Specialists can be grouped to share
knowledge and experience
Functional division serves as a base of
technological continuity
Functional division contains the normal
path of advancement
Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition,
Wiley & Sons Inc., 2012
Disadvantages
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Client is not the focus of the activity
Functional units tend to be oriented toward
the activities of that particular function
No individual is given full responsibility
Response to client needs is slow and
arduous
Tendency to suboptimize the project
Motivation tends to be weak
A holistic approach to the project is not
facilitated
Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition,
Wiley & Sons Inc., 2012
At the other end of the spectrum is
the pure “Projectized” organization
Executive Office
Finance
Legal
Other Support
Project A
Project (or Product)
Manager
Project B
Project (or Product)
Manager
Project C
Project (or Product)
Manager
Dedicated Project Team A
Dedicated Project Team B
Dedicated Project Team C
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In most cases project teams are composed of
team members selected from different
functions and from different levels, because
it is thought the team can solve a problem
Management Gaps
Project
Team
Functional Gaps
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In the “projectized” organization, putting
a ring around the team is fairly easy
Executive Office
Finance
Legal
Other Support
Project A
Project (or Product)
Manager
Project B
Project (or Product)
Manager
Project C
Project (or Product)
Manager
Dedicated Project Team A
Dedicated Project Team B
Dedicated Project Team C
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Advantages
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Project manager has full authority
All members report to the project manager
Short lines of communication
When there are similar projects, expertise can
be retained
Strong and separate identity
Swift decisions
Unity of command
Structurally simple and flexible
Supports a holistic approach
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Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition,
Wiley & Sons Inc., 2012
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Disadvantages
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Duplication in staffing
Stockpiling
Workers tend to fall behind in other areas of
their technical expertise
Inconsistency in policies and procedures
A project takes on a life of its own
Worry about life after the project is over
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Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition,
Wiley & Sons Inc., 2012
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But with the functional organization the
project team spans functional and
management gaps
Executive Office
Financial
Operations
Engineering
Marketing
Electrical Mechanical
Civil
Department Department Department
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Administration
Successful projects within a functional
organization are difficult
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No one individual responsible and no
customer focus
Project tasks are lower priority than functional
tasks
Coordination across the gaps is tough
Projects are completed slowly
Solutions are functionally oriented
But there are some advantages of housing
Project in a functional organization
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Maximum flexibility in the use of staff
Individual experts can be utilized by many different
projects
Specialists in the division can be grouped to share
knowledge and experience
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Various strategies for project execution
improvement evolved to mitigate these
problems
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Rules of engagement (policies, rules, procedures)
The well known “Five Stages” of a Project (later)
Project leaders
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Task forces
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Temporary project leaders within functional departments
Full and part time project staff commitments
Department leaders as Task Force Leaders
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Five Stages of a Project: Stage 1 – We are
told to proceed with the project!
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Excitement and
euphoria
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We got the job!!!
Stage 2: Realization of the enormity
of the project sets in
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Disenchantment
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We actually have to do
what we said we could
do!
Stage 3: Something is bound to go
wrong
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Search for the guilty
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Why did this turn into
such a mess?
Stage 4: There have to be
consequences when things go wrong
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Punishment of the
innocent
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You can bet it is not the
boss.
Stage 5: Somehow, finally you reach
the completion of the project
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Distinction and rewards
for the uninvolved and
undeserving
A late stage of the evolution toward the “Projectized”
organization results in the Matrix Organization
General Manager
Function A
Function B
Function C
PMgr X
PMgr Y
PMgr Z
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Project Responsibility
A variation of the matrix with a
manager of project managers
Sr VP of Engr
VP Projects
PMgr X
PMgr Y
PMgr Z
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Electrical Engr
Civil Engr
Mechanical Engr
Strong Matrix
Figure 5-3
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Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition,
Wiley & Sons Inc., 2012
Weak Matrix
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Project might have only one full-time person,
the project manager
Functional departments devote capacity to
the project
Primary task of the project manager is to
coordinate project activities carried out by the
functional departments
Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition,
Wiley & Sons Inc., 2012
Why a Matrix organization for
projects?
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Gives projects “status” within the organization. The
PM has some authority.
Project processes and procedures can be
customized to fit the project
Project staff can be shared between projects and
have a home at the end of the project assignment.
Attempts to get the best of both organizational
extremes
Advantages
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The project is the point of emphasis
The project has access to the entire
organization for labor and technology
Less anxiety about what happens when the
project is completed
Response to client needs is rapid
Access to administrative units of firm
Better balance of resources
Great deal of organizational flexibility
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Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition,
Wiley & Sons Inc., 2012
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Disadvantages
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Power balance is delicate
Projects compete for resources
Projectitis is still a serious disease
Division of authority and responsibility is
complex
Matrix management violates the
management principle of unity of command
Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition,
Wiley & Sons Inc., 2012
Virtual Projects
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Project team crosses time, space,
organizational, or cultural boundaries
Facilitated by the use of the Internet
Often organized as a matrix
Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition,
Wiley & Sons Inc., 2012
Virtual Project Rules
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Challenging and interesting projects
Use volunteers
Include few people who know each other
Create an online resource to learn about
each another
Encourage frequent communication
Divide work into independent modules
Source: Meridith, J.R., and Mantel, S.K. Jr., Project Management, A Managerial Approach, Eight Edition,
Wiley & Sons Inc., 2012
What is the “Best” organization for
accomplishing successful projects?
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There is no universal best. Only best for your
organization. And even that “best” is temporary.
It depends:
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Project size
Project length
Experience with PM organization
Upper mgt. philosophy and experience
Project location
Resource availability
Other factors
But Project Work is not the only work to be done
How do we organize the Project?
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Typical Project Organizational Components
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Project Manager
Assistant Project Manager
Project Office
Project Team
The Project Organization Chart
Project Manager
Assistant Project Manager
(Can also be in line position)
Project Team Member A
(Or Team Leader A)
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Project Office Staff
(Clerical)
(Billing/Accounting)
(Document Control)
Project Team Member B
(Or Team Leader B)
Project Team Member C
(Or Team Leader C)
The Project Office vs. the Project Team
Project Manager
Assistant Project Manager
(Can also be in line position)
Project Team Member A
(Or Team Leader A)
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Project Office Staff
(Clerical)
(Billing/Accounting)
(Document Control)
Project Team Member B
(Or Team Leader B)
Project Team Member C
(Or Team Leader C)
Project Office vs. Project Team
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The project office staff typically are assigned
full time and provide functional support to the
project
The project team are chosen for their
technical expertise and generally contribute
to a variety of projects
I will generally not differentiate between full
and part time project assignments
Selecting the Project Team
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Typically a joint responsibility of the Project Manager
and the functional manager
Based on the work breakdown structure (WBS) which
defines the work to be accomplished
Skills requirements for tasks are assessed and similar
skills are aggregated to determine overall project
needs
From this baseline, the functional departments are
contacted to locate individuals who can meet these
needs
Negotiations ensue
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Staffing a project (determining the people
resource) is a balancing act
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The PM wants to choose the very best from
throughout the organization
The general management or functional managers
want to assign staff to satisfy their own, sometimes
different organizational objectives
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Utilization
Human resource growth
Availability
Others?
The Project Office
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Dedicated to the project
Usually solid line reported to the PM
Often located in project space
Can provide both project management and
functional support
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Assistant or “section” managers responsible for managing
bid packages or major subsystems
Billing, record keeping, communications, IT, even HR
support
Assigning people (even the right ones) to
the project does not assure success
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“Managers are needed to convert disorganized
resources of people, machines, and money into a
useful enterprise.” (Newman & Warren, The Process
of Management)
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What you have at the outset is disorganization
The conversion process requires building a high
performing team of project participants
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This is not always easy – people are involved
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Assignment to a project means change
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Change brings on anxiety
Anxiety creates barriers to effective teamwork
Without effective teamwork among the project staff it
is unlikely that the project will be successful
Creating a TEAM within the temporary
organizational structure of a project is an early
Project Management responsibility
Effective PM’s realize that they have to do
something to build (and maintain) teamwork.
Building a Team: The PM and the Team
need to get to know one another
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PM/Individual meetings to discuss
 Project objectives
 Who will be involved and why
 The importance of the Project
 Why you are involved
 Rewards/incentives for excellent performance
 Problems/constraints/challenges of the project
 Rules of the Project Road
 Suggestions for improvement
 Professional development agendas
 The necessity for teamwork
Building a Team: The team members must
get to know each other
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Project Kickoff meetings or events (with the staff
although client customer meetings are important
too)
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Project administration
Project scope
Project schedule
Project budget
Project deliverables
Client/customer desires or special needs
Barriers to effective teams and tips for
overcoming them (1)
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Differing outlooks, priorities, judgments
 Smoke them out early
 Clarify responsibilities and project priorities
 Align individual interests with project duties
Role conflicts
 Ask people to define their role in their terms
 Correct or reassign as necessary
 Communicate roles and role changes continuously
Barriers to effective teams and tips for
overcoming them (2)
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Project objectives not clear
 Clarify (Internally and Externally)
 Communicate (I and E)
Continual change (the moving target)
 Try to slow or stop the target with the client
 Plan for multiple environments/contingency plans
Team leadership competition
 Clarification from above
 Demonstrate the right to lead (win the competition)
Barriers to effective teams and tips for
overcoming them (3)
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Lack of team definition and structure
 Draw the org chart
 Reinforce with team meetings
 Specialized communication mediums
People don’t want to work on the project or aren’t
committed
 Find out why
 Explain advantages in personal terms
 Ask functional manager to explain
 Find new staff
Barriers to effective teams and tips for
overcoming them (4)
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Credibility of Project Manager
 Demonstrate top management support for you in this
role
 Seek functional manager’s support and confidence
 Earn respect via sound decisions, hard and smart
work
 Sometimes replacing a single team member removes
the doubt
Barriers to effective teams and tips for
overcoming them (5)
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Communication problems
 Over communicate
 Written
 One on one
 Meetings
 Involve clients and top management
Lack of upper management support
 Bring them into the tent
 Project reviews
 Client reviews
 Kill the project or find another job
Management of the Team to a successful
conclusion
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Management involves:
1.
2.
3.
4.
5.
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Planning
Organizing
Staffing
Controlling
Directing
The first 3 are obvious. The last two may need
some definition.
Controlling in a management sense is
similar to controlling in a systems
engineering sense
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Systems Control
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Sensory Device
Control Device
Activating Device
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Management Control
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Measuring
Evaluating
Correcting
Directing involves implementing through
others to get the project completed
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Includes steps to:
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Staff
Train
Supervise
Delegate
Motivate
Counsel
Coordinate
There are very different thoughts on human
behavior that may govern how Project
Managers control and direct the team
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Theory X: The project team is composed of people
who are inherently lazy and require supervision
Theory Y: The project team is composed of people
who want to get the job done and will do so without
constant supervision
Effective PM’s will use a variety of approaches to
direct different team members
Summary of Chapter 5
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Organizational structures vary between different institutions
How the project organization is overlaid onto the overall
organization can impact the chances of project success and the
activities of the Project Manager
Generally organizations are moving toward a more project
friendly organization as project success becomes more critical for
organizational success
Acquiring adequate project staff can require negotiation
The effective project manager will develop a strong team among
the project staff
Next week
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Chapters 4 and 8
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Negotiations and scheduling
Assignment 2 is due early next week (see course
calendar).
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Project Staffing Requirements
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Other Resources that are needed
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What types of people are needed for the work? (Disciplines/skills and
numbers)
How will they be organized? (Project organization chart(s)
Equipment, Space, Subcontractors etc.
Team Project Status Presentations is due next
week. You need to send me your professional
presentation.
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