Topic 2: Organization: Structure, Staffing and Management

(Chapter 3 – Organizational Structures)

1. Organizational Workflow
2. Matrix Organizational Form
3. The Strong, Weak, or Balanced Matrix
4. Project Management Offices
5. Selecting the Organizational Form
6. Strategic Business Unit (SBU) Project Management
(Chapter 4 - Organizing and Staffing the Project Office and Team)
7. The Staffing Environment
8. Selecting the Project Manager
9. Duties and Job Descriptions
10. The Organizational Staffing Process
11. The Functional Team
12. The Project Organizational Chart
13. Selecting the Project Management Implementation Team
(Chapter 5 - Management Functions)
14. Controlling and Directing
15. Interpersonal Influences
16. Barriers to Project Team Development
17. Team Building as an Ongoing Process
18. Leadership in a Project Environment
19. Value-Based Project Leadership
20. Organizational Impact

1. ORGANIZATIONAL WORKFLOW
Whatever organizational form is finally selected, formal channels must be developed so that each individual has a
clear description of the authority, responsibility, and accountability necessary for the work to proceed.

 Authority is the power granted to individuals (possibly by their position) so that they can make final decisions.
 Responsibility is the obligation incurred by individuals in their roles in the formal organization to effectively
perform assignments.
 Accountability is being answerable for the satisfactory completion of a specific assignment. (Accountability =
authority + responsibility)

Authority and responsibility can be delegated to lower levels in the organization, whereas accountability usually
rests with the individual.

2. MATRIX ORGANIZATIONAL FORM

The matrix organizational form is an attempt to combine the advantages of the pure functional structure and the
product organizational structure. This form is ideally suited for “project-driven” companies.

Project management is a “coordinative” function, whereas matrix management is a collaborative function division of
project management.

The basis for the matrix approach is an attempt to create synergism through shared responsibility between project
and functional management.

No two working environments are the same, and, therefore, no two companies will have the same matrix design.

Participants are full-time on the project; this ensures a degree of loyalty. There exists an inevitable tendency for
hierarchically arrayed units to seek solutions and to identify problems in terms of the scope of duties of particular
units rather than looking beyond them. This phenomenon exists without regard for the competence of the executive
concerned. It comes about because of authority delegation and functionalism. There must be quick and effective
methods for conflict resolution.
  Horizontal, as well as vertical channels, must exist for making commitments.
 There must be good communication channels and free access between managers.
 All managers must have input into the planning process.
 Both horizontally and vertically oriented managers must be willing to negotiate for resources.
 The horizontal line must be permitted to operate as a separate entity except for administrative purposes.

Matrix implementation requires:

 Training in matrix operations
 Training in how to maintain open communications
 Training in problem-solving
 Compatible reward systems
 Role definitions

3. THE STRONG, WEAK, OR BALANCED MATRIX

The most common differentiator between a strong and weak matrix is where the command of technology resides,
whether in the project manager or line managers. If the project manager has a command of technology and is
recognized by the line managers and the workers as being a technical expert, then the line managers will allow the
workers to take technical direction from the project manager.

When a company desires a strong matrix, the project manager is generally promoted from within the organization
and may have had assignments in several line functions throughout the organization. In a weak matrix, the company
may hire from outside the organization but should at least require that the person selected understand the technology
and the industry.

4. PROJECT MANAGEMENT OFFICES (PMO)

As companies begin to recognize the favorable effect that project management has on profitability, emphasis is
placed upon achieving professionalism in project management using the project office concept.

Maturity and excellence in project management comes through strategic planning for project management.
The PMO was transformed into a corporate center for control of project management intellectual property.
 5. SELECTING THE ORGANIZATIONAL FORM
The project management approach can be effectively applied to a one-time undertaking that is:
 Definable in terms of a specific goal
 Infrequent, unique, or unfamiliar to the present organization
 Complex with respect to the interdependence of detailed tasks
 Critical to the company

The basic factors that influence the selection of a project organizational form are:
 Size
 Length
 Span of control
 Cost
 Project location
 Available resources
 Philosophy and visibility of upper-level management
 Experience with project management organization
 Unique aspects of the project

Four fundamental parameters to analyze when considering the implementation of a project organizational form:
 Integrating devices
 Authority structure
 Influence distribution
 Information system

Project management is a means of integrating all company efforts, especially research and development, by selecting
an appropriate organizational form. Integration works best if, and only if, effective collaboration can be achieved
between conflicting units.

Top management must decide on the authority structure that will control the integration mechanism. The authority
structure can range from pure functional authority (traditional management) to product authority (product
management), and finally to dual authority (matrix management).

Additional factors that can influence organizational selection:

 Diversity of product lines
 Rate of change of the product lines
 Interdependencies among subunits
 Level of technology
 Presence of economies of scale
 Organizational size

Successful project management requires that functional units recognize the interdependence that must exist in
order for technology to be shared and schedule dates to be met.

6. STRATEGIC BUSINESS UNIT (SBU) PROJECT MANAGEMENT

Strategic business units (SBUs) is a grouping of functional units that have the responsibility for profit (or loss) of
part of the organization’s core businesses.
Each strategic business unit is large enough to maintain its own project and program managers. The executive in
charge of the strategic business unit may act as the sponsor for all the program and project managers with the SBU.
Project management includes:
 A project manager
 Assistant project managers if necessary
 A project (home) office
 A project team

7. THE STAFFING ENVIRONMENT

To understand the problems that occur during staffing, we first investigate the ff. characteristics of project
management:
1. the project environment
2. the project management process
3. The project manager.

Two major kinds of problems related to the project environment:

1. personnel performance problems – chance for glory
2. personnel policy problems – reporting to two bosses

Project management is successful only if the project manager and his team are totally dedicated to the successful
completion of the project.

Project managers should have both business management and technical expertise. They must understand the
fundamental principles of management, especially those involving the rapid development of temporary
communication channels.

Objectives of project manager during staffing are to:

 Acquire the best available assets and try to improve them
 Provide a good working environment for all personnel
 Make sure that all resources are applied effectively and efficiently so that all constraints are met, if possible.

8. SELECTING THE PROJECT MANAGER

Project management cannot succeed unless a good project manager is at the controls.
Project managers will succeed if it is obvious to the subordinates the general manager has appointed them.
A brief memo to the line managers will suffice.
 9. DUTIES AND JOB DESCRIPTIONS

10. THE ORGANIZATIONAL STAFFING PROCESS

Staffing the project organization can become a long and tedious effort, especially on large and complex engineering
projects. Three major questions must be answered:
 What people resources are required?
To determine the people resources required, the types of individuals (possibly job descriptions) must be
decided on, how many individuals from each job category are necessary, when these individuals will be
needed, the cost of the resources needed, their availability over the duration of the project, their skill level,
training needs and your previous experience working with them.
 Where will the people come from?
whether staffing will be from within the existing organization or from outside sources, such as new hires or
consultants. Outside consultants are advisable if, and only if, internal manpower resources are being fully
utilized on other projects, or if the company does not possess the required project skills.
 What type of project organizational structure will be best?
Typically, it is the matrix organization structure.
 11. THE FUNCTIONAL TEAM
The project team consists of the project manager, the project office (whose members may or may not report directly
to the project manager), and the functional or interface members (who must report horizontally and vertically for
information flow).

Upper-level management can have an input into the selection process for functional team members but should not
take an active role unless the project and functional managers cannot agree.

The selection process for both the functional team member and the project office must include evaluation of any
special requirements. When employees are attached to a project, the project manager must identify the “star”
employees. Most of the time, star employees are found in the line organization, not the project office.

12. THE PROJECT ORGANIZATIONAL CHART

One of the first requirements of the project start-up phase is to develop the organizational chart for the project and
determine its relationship to the parent organizational structure. The next step is to show the program office
structure.

13. SELECTING THE PROJECT MANAGEMENT IMPLEMENTATION TEAM

The implementation of project management within an organization requires strong executive support and an
implementation team that is dedicated to making project management work.

Some employees may play destructive roles on a project team. These roles, which undermine project management
implementation: aggressor, dominator, devil’s advocate, topic jumper, recognition seeker, withdrawer, blocker.

The types of people who should be assigned to implementation teams are initiators, information seekers, information
givers, encouragers, clarifiers, harmonizers, consensus takers, gatekeepers.

14. CONTROLLING AND DIRECTING

Management functions: Planning, Organizing, Staffing, Controlling, Directing.

Controlling is a three-step process of measuring progress toward an objective, evaluating what remains to be done,
and taking the necessary corrective action to achieve or exceed the objectives. These three steps are defined as
follows:
1. Measuring: determining through formal and informal reports the degree to which progress toward objectives is
being made
2. Evaluating: determining the cause of and possible ways to act on significant deviations from planned performance
3. Correcting: taking control action to correct an unfavorable trend or to take advantage of an unusually favorable
trend
Directing is the implementing and carrying out (through others) of those approved plans that are necessary to
achieve or exceed objectives. Directing involves such steps as:
 Staffing: seeing that a qualified person is selected for each position
 Training: teaching individuals and groups how to fulfill their duties and responsibilities
 Supervising: giving others day-to-day instruction, guidance, and discipline as required so that they can
fulfill their duties and responsibilities
 Delegating: assigning work, responsibility, and authority so others can make maximum utilization of their
abilities
 Motivating: encouraging others to perform by fulfilling or appealing to their needs
 Counseling: holding private discussions with another about how he might do better work, solve a personal
problem, or realize his ambitions
 Coordinating: seeing that activities are carried out in relation to their importance and with a minimum of
conflict

15. INTERPERSONAL INFLUENCES

Project managers are generally known for having a lot of delegated authority but very little formal power. They
must, therefore, get jobs done using interpersonal influences. There are five such interpersonal influences:
 Legitimate power: the ability to gain support because project personnel perceive the project manager as
being officially empowered to issue orders
 Reward power: the ability to gain support because project personnel perceive the project manager as
capable of directly or indirectly dispensing valued organizational rewards (i.e., salary, promotion, bonus,
future work assignments)
 Penalty power: the ability to gain support because the project personnel perceive the project manager as
capable of directly or indirectly dispensing penalties that they wish to avoid; usually derives from the same
source as reward power, with one being a necessary condition for the other
 Expert power: the ability to gain support because personnel perceive the project manager as possessing
special knowledge or expertise (that functional personnel consider as important)
 Referent power: the ability to gain support because project personnel feel personally attracted to the project
manager or his project

16. BARRIERS TO PROJECT TEAM DEVELOPMENT

Understanding barriers to project team building can help in developing an environment conducive to effective
teamwork. The following barriers are typical for many project environments.
 Differing outlooks, priorities, and interests
 Role conflicts.
 Project objectives/outcomes not clear.
 Dynamic or changing project environments.
 Competition over team leadership.
 Lack of team definition and structure. - clearly defined task responsibilities and reporting structures.
 Team personnel selection.
 Lack of team member commitment
 Communication problems
 Lack of senior management support.

17. TEAM BUILDING AS AN ONGOING PROCESS

Project leaders should hold regular meetings to evaluate overall team performance and deal with team functioning
problems. The focus of these meetings can be directed toward “what we are doing well as a team” and “what areas
need our team’s attention.” This approach often brings positive surprises in that the total team is informed of
progress in diverse project areas (e.g., a breakthrough in technology development, a subsystem schedule met ahead
of the original target, or a positive change in the client’s behavior toward the project).

18. LEADERSHIP IN A PROJECT ENVIRONMENT

Leadership can be defined as a style of behavior designed to integrate both the organizational requirements and
one’s personal interests into the pursuit of some objective. All managers have some sort of leadership responsibility.
If time permits, successful leadership techniques and practices can be developed.
Leadership is composed of several complex elements, the three most common being:
 The person leading
 The people being led
 The situation (i.e., the project environment)

The most common reason for selecting an individual as project manager is his ability to balance the technical and
managerial project functions.

19. VALUE-BASED PROJECT LEADERSHIP

Project management leadership was perceived before as the inevitable conflict between individual values and
organizational values. Today, companies are looking for ways to get employees to align their personal values with
the organization’s values. To do this, companies have created cultures that support project management and many
of the cultures are driven by a change in perceived values.

20. ORGANIZATIONAL IMPACT

In the project environment, there exists a definite impact due to leadership emphasis. The leadership emphasis is
best seen by employee contributions, organizational order, employee performance, and the project manager’s
performance.

ASSIGNMENT 3:
1. Can anyone be trained to be a project manager?

2. You are the project engineer on a program similar to one that you directed previously. Should you attempt to
obtain the same administrative and/or technical staff that you had before?

3. A person assigned to your project is performing unsatisfactorily. What should you do? Will it make a difference
if he is in the project office or a functional employee?

4. A project manager finds that he does not have direct reward power over salaries, bonuses, work assignments, or
project funding for members of the project team with whom he interfaces. Does this mean that he is totally
deficient in reward power? Explain your answer.

5. What is the correct way for a project manager to invite line managers to attend team meetings?