3/17/2020

Project Management
BA023IU Recap of Session 4
 Conflict resolution
 Negotiation
 Case: “Habitat for Humanity Wins a Big One”

Agenda
Why project organization matters?
Session 5 

 Three major project organization forms

Project Organization
 Selecting appropriate organization form
 Project management office and project team

Lecturer: Tung Nhu Nguyen

1. The importance of project

organization Project-oriented organization
 Remember in Session 1, what made project  Has the advantages in terms of
emerged as an important alternative:  Response to market
 Skills and knowledge specification, knowledge  The traditional way
explosion  The project way
 Demands for more complex and customized  Diverse specialized knowledge required
goods and services, increased customer focus,  Manufactured goods vs. agricultural goods
compressed product life cycle  Software: graphics vs. logical design vs. programming
 Evolution of larger and more sophisticated  Films
markets, global competition

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2. Different ways in organizing

Project-oriented organization projects
 Responsive to organizational changes  As a part of functional department
 Those happen more and more frequently: companies  Pure project organization
buying other companies, or product lines
 When new management trends emerged: applying
 Matrix organization
corporate reengineering, CRM… Functional Matrix Pure project
 Enable total-control, one-stop contact point of
organizational issues. Level of independence
 Communicating with single project managers rather than to
multiple functional managers on complicated matters  Deciding on project design is usually the
responsibility of senior management, PMs
can give comments or be involved

2.1 Project as part of a 2.1 Project as part of a

functional department functional department
 Advantages
President  Flexibility of staff, of resources
 Better use of resources for multiple projects inside
the department
 Exchange of ideas, knowledge, assistance among
experts inside the department
Marketing  Retain knowledge and know-how inside
Finance HR department and organization; continuity
Market research project Z
Launching Brand X  Incubator for potential experts

2.1 Project as part of a

functional department 2.2 Pure project organization
 Disadvantages President

 Project may not received focus needed inside

functional dept., when other daily activities are Program manager Vice President marketing Vice President HR

going on, slow response to project issues

 Discipline oriented rather than problem oriented Project 1 Project 2 Project …

 No dedicated PM may result in chaos

Marketing Marketing
 More priorities are given to tasks related to the
department
Design Design
 Lack of motivation, as project staff are not “seen”
 Lack of holistic view to address problems or better Finance Finance
serve the clients

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2.2 Pure project organization 2.2 Pure project organization

 Organization consists of many projects and  Advantages
no official functional department  The PM has total authority, single boss
 The staff are also responsible to one boss only
 Each project has “everything”: manager, staff
 Communications are streamlined, decision
of different specialization, resources, office making is quicker, better responses to changes or
 For instance  Project identity is promoted
 An IT outsourcing company organizes project as  Better commitment and motivation
nucleus of operation  Structure is easily understood, better working
 A research lab that has various projects on some atmosphere in general
breakthrough products  Problems are solved with a holistic approach

2.2 Pure project organization 2.3 Matrix organization

 Disadvantages
 Resources and efforts, not shared but duplicated President
and wasted
 Excess resources tend to be stored idle in
individual projects to be ready “when necessary”
 Project technical staff might become outdated
with technical advancement, lack of a breadth of Manufacturing Marketing HR Finance
knowledge as they are away from functional dept.
Project 1 - Mfg Project 1 – Mar. Project 1 – HR Project 1 – Fin
 Technical procedure not strictly followed
Project 2 - Mfg Project 2 – Mar. Project 2 – HR Project 2 – Fin
 Mental issues: rivalries among projects, anxiety
for life after projects finished Project 3 - Mfg Project 3 – Mar. Project 3 – HR Project 3 – Fin

2.3 Matrix organization 2.3 Matrix organization

 Matrix = Pure + Functional  Advantages
 Different levels of matrix exist  Better identity, better focus, better commitment
 The roles of PMs: when and what tasks to be  Flexibility prevails, resources shared, waste and
duplication reduced
finished
 Less anxiety when projects end as staff still
 The roles of functional managers: who to belong to functional departments
send and how tasks to be finished  Administrative and technical procedures tend to
 For instance: be followed more strictly
 The project to design, produce and introduce a  Loads tend to be more balanced or optimized
new homepage of the university among projects, problems holistically addressed

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2.3 Matrix organization Variations of matrix org.

 Disadvantages  Weak matrix (functional matrix)
 Conflict between project manager and functional  A person is formally designated to oversee the
manager: who is in charge? (WHO?) PMs tend to project across different functional areas. This
have strong negotiating skills to succeed person has limited authority over functional
 In times of success, who is the creditor? in times people involved and serve primarily to plan and
of difficulties, who is the culprit? coordinate the project.
 Conflicts among project managers as they
compete to secure resources for one’s own  The functional managers retain primary
project responsibility for their specific segments of the
 Staff have to work under two bosses project.
 Share capacity rather than dedicated expert

Variations of matrix org. Variations of matrix org.

 Balanced matrix  Strong matrix (project matrix)
 When a functional group is to serve several  A person is assigned to oversee the project and is
similar projects responsible for the completion of the project. The
 A person is assigned to oversee the project and functional managers involvement is limited to
interact on an equal basis with functional assigning personnel as needed and providing
managers. This person and the functional advisory expertise.
managers jointly direct workflow segments and
approve technical and operational decisions.

Organization structure influences

on projects 3. Selecting an appropriate
project organization form
 Situation determined
 Each form has pros and cons
 No one form is best for all projects, or even
best for one project throughout its entire life
cycle.

Source: PMI

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3. Selecting an appropriate 3. Selecting an appropriate

project organization form project organization form
 What to consider:  Common sense:
 The nature of the project
 Importance
 Functional project: Technology driven, building,
 Size, budget, time constraints
equipment, large capital investment
 Innovation involved  Pure project: Many similar projects (construction),
 Options from organizational point of view control required, specific, unique (to market a new
 Resources available, stability of supplies, potential product)
problems…
 Attitudes of management  Matrix: when??
 Experience
 Freedom given to PM
 Then, decide

3. Selecting an appropriate
project organization form 4.1 Project Management Office
 Examples:  Role:
 A construction company won a tender and to build  Facilitator for project management tasks
a theatre  Not project implementation
 A supermarket to use new shelves and change  Responsibilities
the arrangement of the floor
 Improve efficiency of project implementation
 A bank to implement a customer relationship
management system  Promote good practices
 Data and information streamlines
 Communication with stakeholders about progress
 Which form is appropriate?

4.1 Project Management Office 4.2 Project Team

 Tasks  The PM and his key members
 Establish processes  Typical key members of a project may
 Develop management system include:
 Help with administrative details  Project engineer
 Conducting review, audit  Manufacturing engineer
 Field manager
 Report progress
 Contract administrator
 Serve as a place for PMs to exchange
 Project controller
 Support service manager

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Quiz
4.2 Project Team
 Issues in managing project team
 Perfectionism
 Motivating the team
 Participatory approach
 Empowerment
 Delegation
 Conflict resolution