Project Management Structures PDF

Because learning changes everything. ® Chapter Three Organization: Structure and Culture © 2021 McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written...

Because learning changes everything. ® Chapter Three Organization: Structure and Culture © 2021 McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.  Chapter Outline 3.1 Project Management Structures 3.2 Project Management Office (PMO) 3.3 What Is the Right Project Management Structure? 3.4 Organizational Culture © McGraw-Hill Education 2  3.1 Project Management Structures Three different project management structures are: 1. Functional organization 2. Dedicated project teams 3. Matrix structure Weak matrix Balanced matrix Strong matrix © McGraw-Hill Education 3  Organizing Projects within the Functional Organization Top management decides to implement the project, and different segments of the project are distributed to appropriate areas. Coordination is maintained through normal management channels. It is commonly used when one functional area plays a dominant role in completing the project or has a dominant interest in the success of the project. © McGraw-Hill Education 4  Functional Organizations © McGraw-Hill Education FIGURE 3.1 5  Advantages and Disadvantages of using Functional Organization to Administer and Complete projects Advantages Disadvantages 1. No change 1. Lack of focus 2. Flexibility 2. Poor integration 3. In-depth expertise 3. Slow 4. Easy post-project transition 4. Lack of ownership © McGraw-Hill Education 6  Organizing Projects as Dedicated Teams Dedicated project teams operate as units separate from the rest of the parent organization. A full-time project manager is designated to pull together a core group of specialists who work full time on the project. The project manager recruits necessary personnel from both within and outside the parent company. In a projectized organization where projects are the dominant form of business, the entire organization is designed to support project teams. “Projectitis” is referred to as a negative dimension to dedicated project teams. A we-they attitude can emerge between project team members and the rest of the organization. © McGraw-Hill Education 7  Dedicated Project Team © McGraw-Hill Education FIGURE 3.2 8  Projectized Organization Structure © McGraw-Hill Education FIGURE 3.3 9  Strengths and Weaknesses of the Dedicated Project Team Approach Strengths Weaknesses 1. Simple 1. Expensive 2. Fast 2. Internal strife 3. Cohesive 3. Limited technological expertise 4. Cross-functional integration 4. Difficult post-project transition © McGraw-Hill Education 10  Organizing Projects within a Matrix Arrangement Matrix management is a hybrid organizational form in which horizontal project management structure is overlaid on the normal functional hierarchy. There are usually two chains of command, one along functional lines and the other along project lines. Project participants report simultaneously to both functional and project managers. The matrix structure is designed to utilize resources optimally. Individuals work on multiple projects as well as being capable of performing normal functional duties. It attempts to achieve greater integration by creating and legitimizing the authority of a project manager. It provides dual focus between functional/technical expertise and project requirements. © McGraw-Hill Education 11  Matrix Organization Structure © McGraw-Hill Education FIGURE 3.4 12  Different Matrix Forms Weak matrix This form is very similar to a functional approach with the exception that there is a formally designed project manager responsible for coordinating project activities. Functional managers are responsible for managing their segment of the project. The project manager acts as a staff assistant who draws the schedules and checklists, collects information on the status of the work, and facilitates project completion. © McGraw-Hill Education 13  Different Matrix Forms (Continued) Balanced matrix The project manager is responsible for defining what needs to be accomplished. The project manager establishes the overall plan for completing the project, integrates the contribution of the different disciplines, set schedules, and monitors progress. The functional managers are concerned with how it will be accomplished. The functional managers are responsible for assigning personnel and executing their segment of the project according to the standards and schedules set by the project manager. © McGraw-Hill Education 14  Different Matrix Forms (Continued) Strong matrix The project manager controls most aspects of the project, including scope trade-offs and assignment of functional personnel. The project manager controls when and what specialists do and has final say on major project decisions. The functional managers have title over their people and are consulted on a need basis. The functional managers serve as subcontractors for the project. © McGraw-Hill Education 15  Advantages and Disadvantages of Matrix Management Advantages Disadvantages 1. Efficient 1. Dysfunctional conflict 2. Strong project focus 2. Infighting 3. Easier post-project transition 3. Stressful (2 bosses) 4. Flexible 4. Slow decision making © McGraw-Hill Education 16  3.2 Project Management Office (PMO) Is a centralized unit within an organization or a department that oversees and supports the execution of projects. Plays a critical role in helping matrix systems mature into more effective project delivery platforms. Can be characterized in different kinds: Weather station—tracks and monitors project performance. Control tower—improves project execution. Resource pool—provides the organization with a cadre of trained project managers and professionals. Command and control center—has direct authority over the project. © McGraw-Hill Education 17  3.3 What Is the Right Project Management Structure? Organization Considerations How important is the project management to the success of the firm? What percentage of core work involves projects? What level of resources are available? 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 © McGraw-Hill Education 18  3.4 Organizational Culture Organizational Culture Defined Is a system of shared norms, beliefs, values, and assumptions that blinds people together, thereby creating shared meanings. Reflects the “personality” of the organization. Performs several important functions in organizations. Provides a sense of identity for its members Helps legitimize the management system Clarifies and reinforces standards of behavior Helps create social order © McGraw-Hill Education 19  3.5 Implications of Organizational Culture for Organizing Projects Project managers interact with: The culture of their parent organizations as well as the subcultures of various departments. The project’s clients or customer organizations. Other organizations connected to the project such as suppliers and vendors, subcontractors, consulting firms, government and regulatory agencies, and community groups. “A riverboat trip” is a metaphor describing the relationship between organizational culture and project management. Culture is the river and the project is the boat. © McGraw-Hill Education 20 Because learning changes everything. ® www.mheducation.com © 2021 McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.