Project organization

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Project organization

  1. 1. Chapter 4 Project Organization 1 Ch 4 Project Organization “Organize - to form into an association for a common purpose or arrange systematically”
  2. 2. Chapter 4 Project Organization2 Project Organization  Specialization of the human elements  Different types = functional, 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. 3. Chapter 4 Project Organization3 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. 4. Chapter 4 Project Organization4 President VP Finance VP Marketing VP Manufacturing VP Engineering Functional Organization Project New Model Proton SURIE New Layout – Robot Line
  5. 5. Chapter 4 Project Organization5 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. 6. Chapter 4 Project Organization6 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. 7. Chapter 4 Project Organization7 Pure Project Organization  Project is separated from the rest of the parent system  Becomes self contained unit
  8. 8. Chapter 4 Project Organization8 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. 9. Chapter 4 Project Organization9 Project Organization F in a n c e M a n u fa c tu rin g V ic e P re s id e n t P ro je c t A F in a n c e M a n u fa c tu rin g V ic e P re s id e n t P ro je c t B F in a n c e M a n u fa c tu rin g V ic e P re s id e n t P ro je c t C P re s id e n t
  10. 10. Chapter 4 Project Organization10 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. 11. Chapter 4 Project Organization11 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. 12. Chapter 4 Project Organization12 Matrix Organization PM1 PM2 PM3 Manufacturing Program Manager R&D Marketing President
  13. 13. Chapter 4 Project Organization13 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. 14. Chapter 4 Project Organization14 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. 15. Chapter 4 Project Organization15 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. 16. Chapter 4 Project Organization16 Mixed Organizational Systems  Divisionalization – breaking down large organization into smaller more flexible units  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. 17. Chapter 4 Project Organization17 Mixed Organization P r o je c t M F in a n c e E n g in e e r in g P r o je c t N P r e s id e n t
  18. 18. Chapter 4 Project Organization18 Staff Organization  Set up like functional organization  Adds a staff office to administer projects  Used for small, short run projects
  19. 19. Chapter 4 Project Organization19 Staff Organization Finance Manufacturing Engineering President Project S
  20. 20. Chapter 4 Project Organization20 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. 21. Chapter 4 Project Organization21 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. 22. Chapter 4 Project Organization22 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. 23. Chapter 4 Project Organization23 Key Team Members  Project Engineer  Manufacturing Engineer  Field Manager  Contract Administrator  Project Controller  Support Services Manager
  24. 24. Chapter 4 Project Organization24 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. 25. Chapter 4 Project Organization25 Typical Organization of Engineering Projects F ie ld M a n a g e r M a n u f a c t u r in g E n g in e e r P r o je c t E n g in e e r S u p p o r t S e r v ic e s M a n a g e r C o n t r o l A d m in is t r a t o r P r o je c t c o n t r o lle r P r o je c t M a n a g e r
  26. 26. Chapter 4 Project Organization26 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. 27. Chapter 4 Project Organization27 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. 28. Chapter 4 Project Organization28 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. 29. Chapter 4 Project Organization29 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. 30. Chapter 4 Project Organization30 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

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