Identify Organizational Influences Otto Tawanda Chisiri

The Project Management Context and Processes Course Technology 20012

 Projects must operate in a broad organizational environment  Project managers need to take a holistic or systems view of a project and understand how it is situated within the larger organization Course Technology Projects Cannot Be Run In Isolation

 A systems approach emerged in the 1950s to describe a more analytical approach to management and problem solving  Three parts include: ◦ Systems philosophy: View things as systems, interacting components working within an environment to fulfill some purpose ◦ Systems analysis: problem-solving approach ◦ Systems management: Address business, technological, and organizational issues before making changes to systems Course Technology A Systems View of Project Management

Course Technology Figure 1. Three Sphere Model for Systems Management Laptop Project for Students

Course Technology Understanding Organizations Structural frame: Focuses on roles and responsibilities, coordination and control. Organization charts help define this frame. Human resources frame: Focuses on providing harmony between needs of the organization and needs of people. Political frame: Assumes organizations are coalitions composed of varied individuals and interest groups. Conflict and power are key issues. Symbolic frame: Focuses on symbols and meanings related to events. Culture is important.

 Most people understand what organizational charts are  Many new managers try to change organizational structure when other changes are needed  3 basic organization structures ◦ functional ◦ project ◦ matrix Course Technology Many Organizations Focus on the Structural Frame

 Recall that project stakeholders are the people involved in or affected by project activities  Project managers must take time to identify, understand, and manage relationships with all project stakeholders  Using the four frames of organizations can help meet stakeholder needs and expectations  Senior executives are very important stakeholders Course Technology Recognize the Importance of Project Stakeholders

 Several studies cite top management commitment as one of the key factors associated with project success  Top management can help project managers secure adequate resources, get approval for unique project needs in a timely manner, receive cooperation from people throughout the organization, and learn how to be better leaders Course Technology Need for Top Management Commitment

 If the organization has a negative attitude toward IT, it will be difficult for an IT project to succeed  Having a Chief Information Officer (CIO) at a high level in the organization helps IT projects  Assigning non-IT people to IT projects also encourage more commitment Course Technology Need for Organizational Commitment to Information Technology (IT) example

 Communication skills: listening, persuading  Organizational skills: planning, goal- setting, analyzing  Team Building skills: empathy, motivation, esprit de corps  Leadership skills: sets example, energetic, vision (big picture), delegates, positive  Coping skills: flexibility, creativity, patience, persistence  Technological skills: experience, project knowledge Course Technology Suggested Skills for a Project Manager

 Leadership by example  Visionary  Technically competent  Decisive  Good communicator  Good motivator  Stands up to upper management when necessary  Supports team members  Encourages new ideas  Sets bad example  Not self-assured  Lacks technical expertise  Poor communicator  Poor motivator Course Technology Table 3. Most Significant Characteristics of Effective and Ineffective Project Managers Effective Project Managers Ineffective Project Managers

13-13 Organizational Structure and Culture Organizational Structure Organizational Culture The formal system of work roles and authority relationships that govern how associates and managers interact with one another. Involves the values and norms shared by managers and associates that influence behavior. It is a powerful force in organizations.

13-14 Knowledge Objectives 1.Define key elements of organizational structure, including both structural and structuring dimensions. 2.Explain how corporate and business strategies relate to structure. 3.Explain how environment, technology, and size relate to structure. 4.Define organizational culture, and discuss the competing-values cultural framework. 5.Discuss socialization. 6.Describe cultural audits and subcultures. 7.Explain the importance of a fit between individual values and organizational culture.

13-15 Fundamental Elements of Organizational Structure Structural Characteristics Structuring Characteristics Hierarchy

13-16 Structural Characteristics Span of Control Height Departmentation

13-17 Span of Control Adapted from Exhibit 13-1: Average Span of Control: Effects on Height of the Hierarchy Average span of FourAverage span of Ten Highest Lowest Organizational Level Associates Associates 1000

13-18 Functional Organization Adapted from Exhibit 13-2: Simplified Functional Organization VP Research and Development VP Research and Development VP Operations VP Human Resources VP Finance VP Marketing CEO

13-19 Divisional Organization Adapted from Exhibit 13-3: Simplified Divisional Organization CEO Head of Operations Head of R&D Head of Human Resources Head of Finance Head of Marketing V.P. Product/Service Area 1 Head of Operations Head of R&D Head of Human Resources Head of Finance Head of Marketing V.P. Product/Service Area 1 Head of Operations Head of R&D Head of Human Resources Head of Finance Head of Marketing V.P. Product/Service Area 1

13-20 Factors Affecting Structure Corporate Strategy GrowthDiversification

13-21 Environment and Basic Structure Effective organizations experiencing high environmental uncertainty tend to be more organic. Effective organizations experiencing low environmental uncertainty tend to be less organic. Environmental uncertainty – the degree to which an environment is complex and changing; uncertain environments are difficult to monitor and understand. Jay W. Lorsch Paul R. Lawrence

13-22 Experiencing Strategic OB Google Culture Attracts High-Quality Associates Larry Page and Sergy Brin Do you think Google would have enjoyed its success had a different type of structure and culture been introduced? What types of organizations could benefit with a similar structure and culture? What types of organizations might have difficulty? As Google continues to grow, will the culture survive or will it possibly be replaced by a more traditional culture?

Project Management Structures Challenges to Organizing Projects –The uniqueness and short duration of projects relative to ongoing longer-term organizational activities –The multidisciplinary and cross-functional nature of projects creates authority and responsibility dilemmas

Project Management Structures Choosing an Appropriate Project Management Structure –The best system balances the needs of the project with the needs of the organization.

Project Management Structures Organizing Projects: Functional organization –Different segments of the project are delegated to respective functional units. –Coordination is maintained through normal management channels. –Used when the interest of one functional area dominates the project or one functional area has a dominant interest in the project’s success.

Functional Organizations

Functional Organization of Projects Advantages –No Structural Change –Flexibility –In-Depth Expertise –Easy Post-Project Transition Disadvantages –Lack of Focus –Poor Integration –Slow –Lack of Ownership

Project Management Structures (cont’d) Organizing Projects: Dedicated Teams –Teams operate as separate units under the leadership of a full-time project manager. –In a projectized organization where projects are the dominant form of business, functional departments are responsible for providing support for its teams.

Dedicated Project Team

Project Organization: Dedicated Team Advantages –Simple –Fast –Cohesive –Cross-Functional Integration Disadvantages –Expensive –Internal Strife –Limited Technological Expertise –Difficult Post-Project Transition

Project Organizational Structure

Project Management Structures (cont’d) 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.

Matrix Organization Structure Omni Continental Engineering

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 Why will the task be done? How will the project involvement do the task?impact normal functional activities? How well has the total project Is the task satisfactorilyHow well has the functional been done? completed? input been integrated?

Project Management Structures (cont’d) Matrix Structure –Hybrid organizational structure (matrix) is overlaid on the normal functional structure Two chains of command (functional and project) All project participants report simultaneously to both a functional and a project manager –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

Different Matrix Forms Functional (also Weak or Lightweight) Form –Matrices in which the authority of the functional manager predominates and the project manager has indirect authority. Balance (or Middleweight) Form –The traditional matrix form in which the project manager sets the overall plan and the functional manager determines how work to be done. Strong (Heavyweight) Form –Resembles a project team in which the project manager has broader control and functional departments act as subcontractors to the project.

Project Organization: Matrix Form Advantages –Efficient –Strong Project Focus –Easier Post-Project Transition –Flexible Disadvantages –Dysfunctional Conflict –Infighting –Stressful –Slow

Project Management Structures (cont’d) Organizing Projects: Network Organizations –An alliance of several organizations for the purpose of creating products or services. A “hub” or “core” firm with strong core competencies outsources key activities to a collaborative cluster of satellite organizations.

Mountain Bicycle Network Project FIGURE 3.5

Project Organization: Network Form Advantages –Cost Reduction –High Level of Expertise –Flexible Disadvantages –Coordination of Breakdowns –Loss of Control –Conflict

Choosing the best structure How should you go about selecting the optimal structure?

Developing Organizational Culture Adapted from Exhibit 13-7: Process of Developing Organizational Culture Organizational Culture Norms Reinforcing Outcomes Shared Values Individual and Group Behavior

Organizational Culture Adapted from Exhibit 13-8: Competing Values Model of Organizational Culture Effectiveness Cohesion and Morale Leadership Mentors and Coaches Clan Effectiveness Creativity and Innovation Leadership Entrepreneurs and Innovators Adhocracy Effectiveness Goal Achievement and Winning Leadership Hard Drivers and Competitors Market Effectiveness Efficiency and Order Leadership Monitors and Organizers Hierarchy Internal Focus/IntegrationExternal Focus/ Differentiation Stability/Control Flexibility/ Discretion

Cultural Socialization A process through which an organization imparts its values to newcomers Context Content Social Dynamics

Types of Personal Values Means (Behavior) Values End (Goal) Values Adapted from Exhibit 13-9: Types of Personal Values

Choosing the Appropriate Project Management Structure Organization (Form) Considerations –How important is the project to the firm’s success? –What percentage of core work involves projects? –What level of resources (human and physical) are available?

Rated Effectiveness of Different Project Structures by Type of Project FIGURE 3.6 Source: Larson, E. W., and Gobeli, D. H., “Matrix Management: Contradictions and Insights,” California Management Review, vol. 29, no. 4 (Summer 1987), p Why?

Choosing the Appropriate Project Management Structure (cont’d) Project Considerations –Size of project –Strategic importance –Novelty and need for innovation –Need for integration (number of departments involved) –Environmental complexity (number of external interfaces) –Budget and time constraints –Stability of resource requirements

Organizational Culture Organizational Culture Defined –A system of shared norms, beliefs, values, and assumptions which bind people together, thereby creating shared meanings. –The “personality” of the organization that sets it apart from other organizations. Provides a sense of identify to its members. Helps legitimize the management system of the organization. Clarifies and reinforces standards of behavior.

Key Dimensions Defining an Organization’s Culture FIGURE 3.7

Identifying Cultural Characteristics Study the physical characteristics of an organization. Read about the organization. Observe how people interact within the organization. Interpret stories and folklore surrounding the organization.

Organizational Culture Diagnosis Worksheet FIGURE 3.8

Implications of Organizational Culture for Organizing Projects Challenges for Project Managers in Navigating Organizational Cultures –Interacting with the culture and subcultures of the parent organization –Interacting with the project’s clients or customer organizations –Interacting with other organizations connected to the project

Cultural Dimensions of an Organization Supportive of Project Management FIGURE 3.9

Cultural Audit A tool for assessing and understanding the culture of an organization. Use these five steps for conducting the cultural audit: Analyze process and content Analyze responses to critical incidents Analyze values and beliefs of culture creators Explore anomalies or puzzling features Examine linkage – culture with goals Subcultures – groups that share values that differ from the main values of the organization.

Managerial Advice Finding a Fit Robert Nardelli Do you agree that an individual’s management style and values should agree with the organization’s culture? Why or why not? Have you worked with a leader whose style was very different than the culture of the organization? What was that like? Can some organizations benefit from a major change in leadership philosophy?

Person-Organization Fit Abstract ideals that relate to proper life goals and methods for reaching those goals. Values Types of personal goals that one ought to have Types of behaviors that one ought to use in reaching those goals End-Means Dimension

The Strategic Lens 1.Consider an organization of which you are a member or an associate. What is the structure in this organization? Is it centralized or decentralized? Is it organic and flexible? How would you change the structure in this organization to make it more effective? 2.How would you describe the culture in the organization discussed in question #1? How does the culture affect members’ behavior in the organization? 3.When you become a manager, what type of culture will you establish in your unit? What values do you want to emphasize? Why? 4.Share your experience on the impact of organisational culture and project delivery

Questions

The end Thank you