Project Organization : A project organization is a structure that facilitates the

coordination and implementation of project activities. Its main reason is to create an

environment that fosters interactions among the team members with a minimum
amount of disruptions, overlaps and conflict

Characteristics of a Projectized Organizational Structure

The following are a few characteristics of a projectized organizational structure:

 Projectized organizations are dynamic and adaptive.

 Project managers have full authority over project resources. They control the
budget and work assignments.
 Project managers have full-time team members under their control.
 Team members are often collocated for better performance until the project
ends.
 When the project is completed, the team is disbanded, and resources are
released.

Organizational Structure Types

There are three basic types of organizational structures...
 Functional Organizational Structure
 Project-Based Organizational Structure
 Matrix Organizational Structure

FUNCTIONAL ORGANIZATIONAL STRUCTURE

Functional organizations are structured around the organization's primary
functions.
 Functional Organizational Structure

Examples of functions within a company are:

 Advertising
 Engineering
 Human Resources
 Manufacturing

In a functional organization, every employee is positioned within only one

function and has one manager they report to, the Functional Manager. The
Functional Manager assigns and manages the employees work and handles
administrative tasks such as employee compensation.

PROJECT-BASED ORGANIZATIONAL STRUCTURE

Project-based organizations are structured around projects and not functions. This
type of structure is also called a projectized organizational structure.
 Project-Based Organizational Structure

In a project-based organization most of the organization's resources are involved

in project work. Project Managers have high levels of independence and authority
for the project and control the project resources.

MATRIX ORGANIZATIONAL STRUCTURE

Matrix organizations blend features of project-based and functional organizational
structures.

The key challenge with a matrix organization is that every employee has two (or
more) managers they report to, their Functional Manager and the Project Manager.
If they are working on multiple projects, they may have even more managers to
report to.

There are three types of matrix organizations:

 Weak Matrix
 Balanced Matrix
 Strong Matrix
WEAK MATRIX

Weak Matrix Organizational Structure

A weak matrix organizational structure maintains many of the features of

the functional organizational structure. The role of the Project Manager is more
that of a Project Coordinator. Their ability to make or enforce decisions is low and
most of the authority remains with the Functional Manager.
BALANCED MATRIX

Balanced Matrix Organizational Structure

A balanced matrix organizational structure recognizes the need for a Project
Manager. However, the Project Manager does not have full authority over the
project, project staff or project budget.
STRONG MATRIX

Strong Matrix Organizational Structure

A strong matrix organizational structure has many of the features of

the projectized organizational structure. They have full-time Project Managers
and project administrative staff. Project Managers have considerable authority
over the project in this organzational structure.
 Chapter 7 Project Monitring and control
2  Monitoring and Control
Monitoring is the collection, recording, and reporting of project information

Control uses the monitored data to bring actual performance into agreement with the plan

Monitoring and Control are the opposite sides of project selection (which dictates what to
monitor) and planning (which identifies the elements to be controlled)

Designing the Monitoring System

Identify special characteristics of performance, cost, and time that need to
be controlled
performance characteristics should be set for each level of detail in the project
Real-time data should be collected and compared against plans
mechanisms to collect this data must be designed
Avoid tendency to focus on easily collected data
How to Collect Data 
• It is necessary to define precisely what pieces of information should be gathered
and when
• A large proportion of all data collected take one of the following forms: •
Frequency counts
• Raw numbers
• Subjective numeric ratings
• Indicators
• Verbal measures
Information Needs and the Reporting Process
 • The monitoring system ought to be constructed so that it addresses every level
of management
• Reports do not need to be of the same depth or at the same frequency for each
level
• The relationship of project reports to the project action plan or WBS is the key
to the determination of both report content and frequency
 • Reports must contain data relevant to the control of specific tasks that are
being carried out according to a specific schedule
• The timing of reports should generally correspond to the timing of project
milestones
• The primary objective is to ensure achievement of the project plan through
control
• The scheduling and resource usage columns of the project action plan will
serve as the key to the design of project reports

Controlling
Project Control • Control is the last element in the implementation cycle of
planning-monitoring-controlling

Elements of Control
Control is focused on three elements of a project
• Performance • Cost • Time
Controlling Performance
 There are several things that can cause a project’s performance to require
control:
 Unexpected technical problems arise
  Insufficient resources are available when needed
 Insurmountable technical difficulties are present
 Quality or reliability problems occur
 Client requires changes in specifications
 Interfunctional complications arise
• Technological breakthroughs affect the project
Controlling Cost 
There are several things that can cause a project’s cost to require control:
 Technical difficulties require more resources
 The scope of the work increase
 Initial bids were too low
 Reporting was poor or untimely
 Budgeting was inadequate
 Corrective control was not exercised in time
 Input price changes occurred
Controlling Time 
There are several things that can cause a project’s schedule to require control
 Technical difficulties took longer than planned to resolve
 Initial time estimates were optimistic
 Task sequencing was incorrect
 Required inputs of material, personnel, or equipment were
unavailable when needed
 Necessary preceding tasks were incomplete
 Customer generated change orders required rework
 Governmental regulations were altered
Purposes of Control
 • There are two fundamental objectives of control:
• 1. The regulation of results through the alteration of activities
• 2. The stewardship of organizational assets
• The project manager needs to be equally attentive to both regulation and
conservation
• The project manager must guard the physical assets of the organization, its
human resources, and its financial resources

DESIGNING THE CONTROL SYSTEM

Purpose is to correct errors, not punish the guilty

 Investments in control subject to diminishing returns

Must consider impact on creativity and innovation

Be careful not emphasize short-run results at the expense of long-run objectives

Dangers of across the board cuts

Three Types of Control Processes 

• No matter what the purpose in controlling a project there are two basic types of
control mechanisms that can be used
1. Go/no-go control
2. Post control
• Cybernetic control is a third, but less common control mechanism that is rarely
directly applicable to projects.
Go/No-go Controls 
• Take the form of testing to see if some specific precondition has been me
t • Most of the control in project management falls into this category
• This type of control can be used on almost every aspect of a project
• Must exercise judgment in the use of go/no-go controls
• Go/no-go controls operate only when and if the controller uses them
Postcontrol 
• Postcontrols are seen as much the same as a report card
• They may serve as the basis for reward or punishment, but they are received
too late to change current performance because postcontrols are placed on the
process of conducting a project, they may be applied to such areas as:
communication, cooperation, quality of project management, and the nature of
interaction with the client
• Postcontrols are applied after the fact
• Directed toward improving the chances for future projects to meet their goals
• It is applied through a relatively formal document that contains four distinct
sections
1. The project objectives
2. Milestones, checkpoints, and budgets
3. The final report on project
4. Recommendations for performance and process improvement
Cybernetic Controls 
• Human response to steering controls tends to be positive
• Steering controls are usually viewed as helpful rather than a source of
unwelcome pressure
 • Response to steering controls also depends on the acceptance that the goals of
the control system are appropriate

Chapter 8 Project Evaluation and Termination

Project evaluation is a systematic and objective assessment of an ongoing or
completed project.

The aim is to determine the relevance and level of achievement of project

objectives, development, effectiveness, efficiency, impact and sustainability

Purposes of Evaluation – Goals of the System.

 Primary purpose of evaluation is to help translate the achievement of the

project’s goal into contribution to the parent organization’s goals.

 Efficiency in meeting both the budget and the schedule.

 Customer satisfaction.

 Business/Direct success.

 Future potential.

 Direct Goals of the project ignores many costs & benefits to the project, team
members, parent organization.

 Ancillary goals attempts to –

  Improve understanding of the ways in which project’s value to the

organization.  Improve process for organizing & managing projects.

  Provide congenial environment in which project team members can work

creatively together.

  Identify organizational strengths & weaknesses in project related

personnel, management & decision making techniques & systems
   Identify & improve the response to risk factors in the firm’s use of the
project.

  Allow access to project policy decision making by external stakeholders.

  Improve the way project contribute to the professional growth of the

project team members.

  Identify the project personnel who have high potential for managerial
leadership.

 Problems associated with finding the ancillary goals

  One can not measure the performance against unknown goal.

  Individuals pursue their own ends while working for organizations.

  Lack of trust.

  Multi purposed project

The Project Audit

A through examination of the management of a project, its methodology &

procedures, its records, its properties, its budgets & expenditure, and its degree
of completion.

Studies financial, managerial, and technical aspects of the project.

Six Parts -

  Current status of the project.

  Future status.

  Status of crucial tasks.

  Risk assessment.

  Information pertinent to other projects.

   Limitations of the audit.

The Project Audit Life Cycle.

 Six basic phases:

 Project audit initiation

Purpose and scope of audit; gathering sufficient information; assess

methodologies, team members required

 Baseline Definition

Determine the standards against which performance will be measured.

(Benchmarking)

 Establishment of Audit Database

Gathering/organizing pertinent data

Focus on what’s necessary

 Preliminary Analysis of the Project

The judgment phase

Comparison of actual to standard

 Audit Report Preparation

Present findings to PM first

Then, prepare final report

 Audit Termination

Review of audit process

Disbanding of team
Construction & use of the Audit Report

 General format for all audit report.

 Communication device.

 The information should be arranged so as to facilitate the comparisons of

the predicted vs. actual results.

 Negative comments about individuals or groups associated with the

project should be avoided.

 Writing in clear, professional, unemotional style & restricting content to

information & issues that are relevant to the project.

 Format for Project Audit Report.

 Introduction

 To provide the framework of understanding for the reader.

 Including project objectives

 Also audit assumptions, limitations

 Current project status

 Cost - comparing actual costs to budgeted costs.

 Schedule

 Progress/Earned Value

 Quality

 Future Project Status

 Conclusions and recommendations

 Critical Management Issues

 A Pareto approach
 Risk Management

 Major threats to project success

 Caveats, Limitations, Assumptions

 Appendices

Termination
A project Termination –

when work on the substance of the project has ceased or slowed to the point that
further progress is no longer possible

• A Project life – Each and every project has a beginning and ending.

• Nature of Problems and cause to: Nature Cause to Easily solved Successful completion
Bye-passed Ceased Lived Delayed / slowed Ignored Replaced / better alternative

Reason of Termination: –
Poor planning and risk management –

Uncertainty of environment –

Lack of Resources –

Key people left –

Time and cost –

Lack check and balance and involvement –

Corporate merger –

Political Assassination –

Lack of management support –

Lack of customer support

• Change of vision and mission Introduction of Project Termination

Varieties of termination
Termination by extinction:

– Successful:

• objectives met

– Unsuccessful:

• say no to bye

• Better, faster, cheaper and obvious outputs are available

• Clients become either happy, angry and frustrated.

• Environment dynamics

• Termination by Addition

–Applies to an in-house project

–When the project is successful, it is institutionalized

–While the project goes away, project personnel and assets are transferred to the new
business

• Termination by Integration

– The most common way to terminate a project

– The project comes into the business

– It is absorbed into the existing structure

– That structure absorbs the assets of the project

Aspects of the Transition from Project to Integrated Operation

• Personnel • Manufacturing • Accounting/finance • Engineering • Information systems

• Marketing • Purchasing • Risk management The Varieties of project termination

• Termination by Starvation:

– Termination by starvation involves greatly reducing the budget of a project

– Used when it is politically dangerous to cancel a project

– Bad manners to enquire the status of the project

What are the primary duties of a termination manager?

 ensure completion of the work

 ensure that delivery is accomplished

 ensure that documentation is complete-Final Report

 billing + sending invoices to the customer

 redistribute resources to the appropriate places

 clear project with legal counsel or consultant  records

The Termination Process

Components of termination process

–Whether or not to terminate

 Goal/Objective-based

or

 Qualification factors

–If terminate:

 Carry out termination procedures

 Planned Orderly

 Procedures vary