1. Project Organization

2. Project Organization Specialization of the human elements
Functional division, product line, geographical location, production process, type of customer, subsidiary organization, time, vertical or horizontal organization
How to tie project to the parent firm
How to organize the project itself

3. Project as Part of Functional Organization
E.g. new technology project – under vice president of engineering
Introduction of new product line – under vice president of marketing
Project assigned to the functional unit that has most interest

4. President
VP Finance
VP Marketing
VP Manufacturing
VP Engineering

5. Major Advantages Maximum flexibility in the use of staff
Individual experts can be utilized by many different projects
Specialist in the division can be grouped to share knowledge and experience
Functional division serves as a base of technological continuity
Functional division contains normal of advancement

6. Disadvantages The client is not the focus of activity and concern
Tend to be oriented towards functional activities
No individual is given full responsibility for the project
Slow response to client’s needs
Tendency to sub-optimize the project
Motivation of project team is weak
Does not facilitate a holistic approach to the project

7. Project Organization
Project is separated from the rest of the parent system
Becomes self contained unit

8. Advantages PM has full line authority over the project
All project workforce directly responsible to the PM
Lines of communication are shortened
Maintain permanent group of experts
High level of commitment
Ability to make swift decisions
Unity of command
Simple and flexible structure
Support holistic approach to the project

9. Project Organization

10. Disadvantages Duplication of effort
Stockpile equipment and technical assistance “just in case”
Lack of expertise in high technology project
Foster inconsistency and cutting corners
Project takes on a life of its own
Worry about “life after project ends”

11. Matrix Organization
Combination of functional and pure project organizations
Matrix project is not separated from parent organizations
Individuals come from respective functions divisions and are assigned to the project full time or part time

12. Matrix Organization President Manufacturing Program Manager R&D
Marketing
PM1
PM2
PM3

13. Matrix Organization Cross-functional team members
Draw temporarily on technological expertise of relevant functions
High technology areas – integrate functional specialties
Iterations in adapting “over the wall” approach
Systems approach – integrity of product design
Close coordination and communication among all parties

14. Advantages of Matrix Approach
The project is the point of emphasis
Reasonable access t pools of technical talents
Less anxiety about what happens after project completion
Rapid response to client needs
Access to administrative units of the parent firms
Better balance of company resources in multiple projects
Flexibility in control

15. Disadvantages Delicate balance of power
Movement of resources – conflict
Projects resist death
Complex division of authority and responsibility
Violates the principle of unity of command

16. Mixed Organizational Systems
Divisionalization – more flexible
Spin-off the large projects as subsidiaries or independent operations
Allow formation of venture team
Hybrid leads to flexibility
Dissimilar groupings encourage overlap, duplication and friction

17. Mixed Organization

18. Staff Organization Set up like functional organization
Adds a staff office to administer projects
Used for small, short run projects

19. Staff Organization Project S President Finance Manufacturing
Engineering

20. Choosing an Organizational Form
Functional form – major focus on in-depth technology, require large capital investment
Pure project – large number of similar projects
Matrix organization – require integration of inputs from several functional areas and involves reasonably sophisticated technology and several projects must share technical expertise
Matrix organizations are complex

21. Selection of Project Organization
Define the project / objectives
Determine the key tasks
Arrange key tasks by sequence and decompose them into work packages
Determine project subsystems
List special characteristics – level of technology, probable length, resource requirements, level of outsourcing

22. Project Team
Project office – control center, chart room (focus of all project activity)
Close location to project manager
Co-location of external parties
Reduce physical distance
Better communication
Pressure to complete tasks

23. Key Team Members Project Engineer Manufacturing Engineer Field Manager
Contract Administrator
Project Controller
Support Services Manager

24. Work Organization
Project engineer (technical performance) and project controller (budget) report to PM
PM forecast of personnel needs
Prepare WBS to determine exact nature of tasks
Skills requirements are assessed and aggregated
Outsourcing of certain tasks

25. Typical Organization of Engineering Projects

26. Staff Critical to Project Success
Senior project team members
Staffs whom the PM will require close communication
Staffs with rare skills for project success

27. Human Factors Technical problem with a human dimension
Perfectionist – can cause delay
Motivation – recognition, achievement, responsibility, advancement, the work itself
Interpersonal conflict
Management by Objectives (MBO) – allows worker to take responsibility for design and performance of a task

28. Advantages of MBO Participative mechanism
Allow professionals to design their own method
Team members know what is expected of them
Members have the opportunity to participate in deciding their own responsibilities
Members get timely feedback on their performance
Project manager is provided a tool for evaluating and controlling performance

29. MBO
Superior set objectives in consultation and agreement with subordinates
Subordinate develops action plan, a detailed plan and scheduled that will result in achieving the objective
Final plan becomes a contract

30. Major Sources of Conflict
Life cycle phase
Conflict source
Project formation
Priorities, procedures, schedules
Buildup phase
Priorities, schedule, procedures
Main program
Schedule, technical, manpower
Phase out
Schedules, personality, manpower