Project Management

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Project Management

• Project Organization
• Jiwei Ma

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Content

• Introduction
• Organization theory
• Basic organization types
• Project organization and project
• Project team building

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Introduction

• Project organization is the foundation of project
  management
• Project objective is decisive to project
  organization
• Project organization is designed mainly to carry
  out project controlling

4
Project Objective and Project Organization
Methods Tools
People
Organization
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Organization Model
Environment
Social structure
Physical Structure
ORG
Culture
Technology
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Organization Theory

• Organization theory studies,
• The structural components of a system
• Organization structure
• Task breakdown and responsibility definition
• Management functionalities arrangement
• The mechanism and procedure of a system
• The mechanism of material flow
• The mechanism of information flow

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Development of Organization Theory

• Adam Smith
• efficiency on division of labor ? social
  structure of organization
• Karl Marx
• Relationships between the organization and
  individuals, fundamental antagonism between labor
  and the interests of capital
• Emile Durkheim
• increasing specialization, hierarchy,
  interdependence of work tasks
• formal and informal aspects of organization ?
  tension between economic and human aspects

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Development of Organization Theory

• Max Weber
• bureaucracy is objective and impersonal ?
  benefits of rationality (formal authority)
• types of social action formal rationality,
  substantive rationality, affectional, traditional
• three types of legitimate Herrschaft rational,
  traditional, charismatic
• Fredrick Winslow Taylor
• Scientific Management method to discover the
  most efficient working techniques for manual
  forms of labor
• close supervision of highly specified physical
  work
• managerial control

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Development of Organization Theory

• Henry Fayol
• universal principles for the rational
  administration of organizational activities
• principles span-of-control, exceptions,
  departmentation, unity-of-command, hierarchy
• esprit de corps unity of sentiment and harmony
  contribute to the functioning of an organization
• functions of manager planning, organizing,
  command, coordination, control

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Classical Organization Theory

• The classical organization theory is focused on
  the mechanism of power, authority, and control
• Three types of organizations
• Charismatic authority
• Based on the sacred or outstanding characteristic
  of the individual
• Traditional authority
• Essentially a respect for custom
• Rational legal authority
• Based on code or set of rules
• The last one was regarded as the predominant form
  of organization

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Classical Organization Theory

• Bureaucracy is the most efficient form of
  organization
• A legal code shall be established for all members
  to obey
• The code form a system of abstract rules, and
  administration looks after the interest of the
  organization within the limit of this system
• The person exercising authority also obeys this
  impersonal order
• Only through being a member does the member obey
  the law
• Obedience is due not to the person who holds the
  authority but to the impersonal order which has
  granted him this position

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Classical Organization Theory

• The theory is based on the assumption of formal
  and total rationality
• Isolated from the environment
• The primary concern of the theory is
• the behaving mechanism to avoid corruption,
  unfairness, and nepotism within the organization
• instead of the slow, rigid and inefficient
  bureaucracy

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Organization Theory - Modified

• The modified organization theory has less
  idealistic assumption and established
  organization control principles with more
  practical realism
• Principles
• Division of work - Repetition of the same
  function brings speed and accuracy. Thus work
  should be divided according to skill and
  technical expertise
• Authority and responsibility - Authority is
  linked to responsibility, and together require
  increasing judgment and morality at senior levels

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Organization Theory - Modified

• Principles
• Discipline essential for the smooth running of
  an organization
• Unity of command an employee should receive
  orders from one superior only
• Unity of direction One and one plan for a group
  having the same objective
• Remuneration of personnel
• Assure fairness
• Encourage keenness by rewarding well-directed
  effort
• Avoid over-payment beyond reasonable limits

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Organization Theory - Modified

• Principles
• Equity employees must be treated equally and
  fairly
• Stability of tenure of personnel a period of
  stability will help employees to delivery their
  best
• Esprit de corps dividing ones own team is a
  grave sin against the business
• Provide a key to modern organization and possible
  approach to current organizational solutions
• Unable to explain many modern practices
  contradictory to the principles due to the limits

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Organization Structure

• Hierarchical organization
• Functional organization
• Project organization
• Matrix organization

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Hierarchical Organization
A
18
Example Army
Division
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Functional Organization
A
20
Example Typical Functional Organization in
Manufacturing Industry
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Example Modified Functional Organization
President
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Functional Organization

• Advantages
• Emphasis of specialization and opportunities for
  employees to obtain professional training and
  advances
• Promotion opportunity for professionals
• Professionals can work for different project at
  same time
• Functional department can be the basis of
  technical continuity and sustainability
• Stability of tenure of professionals

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Functional Organization

• Disadvantages
• Instead of customers, functional activities
  become the focus of departments
• Its difficult to find a fully responsible person
  for a problem or fault
• Slow and hindered reaction to customers
  requirement due to multi-layer and multi-branch
  management structure
• Negligence of the needs of project and
  individuals working on project
• Difficult for cross-department coordination due
  to communication and information exchange
  barriers, which is critical to the complex project

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Example Project Organization
General Manager
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Example Project Organization
Ajax Express Company President
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Project Organization

• Advantages
• Project manager is fully responsible for the
  project and directly report to senior management
  level
• Members of project team report to project manager
• Separation of project from functional department
  makes communication simple and easy
• Unity of direction enables project teams to
  concentrate on project objective
• Centralization of management expedites the
  decision making process and enable an fast
  reaction
• Unity of command

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Project Organization

• Disadvantages
• Duplication of resource input when there are more
  than one project
• Waste of critical resources due to project
  managers preparatory inventory
• Inconsistency in companys regulatory management
• Difficulty for communication and information
  exchange
• Lack of stability of tenure and continuity of
  professional career for employees

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Matrix Organization
A
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Example Matrix Organization
General Manager
Marketing
Production
Accounting
HR
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Example Matrix Organization
Ajax Express Company President
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Multi-level Matrix Organization
A
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Matrix Organization

• Advantages
• Most of works center around project
• Different projects can share the expertise of
  various functional departments
• Project team member has a strong connection to
  project, while still maintains a sense of
  belonging
• Fast reaction to both internal and external
  requirement
• Part of project team members are from
  administrative department, it helps to maintain
  the consistency in regulatory management
• Easy to maintain the balance of resource input
  among different project

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Matrix Organization

• Disadvantages
• Lack of the unity of command
• Project manager will concentrate on project
  objective, instead of companys objective
• Its difficult to allocate resources and easy to
  invoke dispute between project managers
• High demand on the coordination between project
  manager and functional department manager

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Comparison of Various Organization Structures
Functional Matrix Matrix Matrix Project
Functional Light-weight Balanced Heavy-weight Project
Project managers power Few or none Limited middle Strong Fully authorized
Percentage of full time members None 0 25 15 60 50 95 85 100
Project manager position Part-time Part-time Full-time Full-time Full-time
Title for project manager Project Coordinator Project Coordinator Project Manager Project Manager Project Manager
Project administrative personnel Part-time Part-time Part-time Full-time Full-time
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Project Organization Case

• An office building is fully invested by public
  fund and will be used by a governmental
  institute.
• This institute does not have construction
  specialist or a team to manage the project, so
  its decided to hire a consulting company to
  manage the project under an owners
  representative.
• The owners representative, reporting to the
  director of this governmental institute, will be
  fully responsible for all of the project issues.
• Any decision regarding major functionality and
  project implementation of this office building
  will be made by top management level of this
  institute, and than carried out by the owners
  representative.
• It is also required by law to hire a certified
  consulting company to deal with project
  procurement, and a site supervising company to
  monitor the construction procedure.

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Project Organization Case

• A state owned company decided to expand its
  production capacity by building a new facility.
• This company has a maintenance team with
  mechanical, electrical, and production equipment
  engineers.
• The top management level assigned an owners
  representative to be responsible for all the
  project issues, who will directly report to the
  president of the company.
• A decision-making committee has been established
  to monitor the project and support the president
  regarding critical decision making procedure.
• The company decided to hire a consulting company
  to provide project management consulting service
  to the owners representative and owners project
  engineers.
• It is also required by law to hire a certified
  consulting company to deal with project
  procurement, and a site supervising company to
  monitor the construction procedure.

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Project Organization Case

• A foreign invested joint-venture is going to
  build an industrial facility in China.
• This company has a maintenance team with
  mechanical, electrical, and production equipment
  engineers.
• The company has set up a project engineering
  department to deal with project engineering
  issues.
• The director of the project engineering
  department will be reporting to the chief
  operating officer of the company.
• Other functional departments of the company such
  as purchasing, accounting, etc. will also be
  involved in certain project issues.
• A consulting team has been hired as a part of the
  project engineering department to deal with
  project management issues as well as certain
  technical issues during design and construction
  procedure.
• A site supervising company has also been hired to
  monitor the construction procedure.

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Team Building

• Basic Concept
• Types of Team
• Rules of a Team
• Steps to Build a Team
• Team Effectiveness

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Team Building

• Basic Concept
• A team is a group of people working towards a
  common goal
• Every team member has his/her own goals in a
  hierarchy system that conform to the common goal
• A team may be a formal organization or an
  informal workgroup
• Team building is the process of enabling that
  group of people to reach their goal

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Types of Team in Size
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Types of Team in Size
Type of Team Building Scale Key Factors
Individual 1 person Individual skills and perceptions
Small Team 2-12 people Relationships between people
Team Island 2 or more teams Relationships between teams
Organization 15 people The culture of the organization
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Team Building

• Rules of a Team
• Purpose Members share the vision and the sense
  of the mission
• Priorities Members know what needs to done next,
  by whom, and by when
• Roles Every member know his own role
• Decisions Authority and decision making lines
  are clearly understood
• Conflict Conflict is dealt openly and is
  considered important issues
• Personal traits members feel their unique
  personalities are appreciated and well utilized.

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Team Building

• Rules of a Team
• Norms Group norms for working together are well
  established and observed.
• Effectiveness Members find team meetings
  efficient and productive.
• Success Members share the clear view of the
  teams success and the sense of accomplishment.
• Training Opportunities for updating skills are
  provided and taken advantage of by team members.

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Team Building

• Steps to Build a Team
• Forming
• Storming
• Norming
• Performing
• Adjourning

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Steps to Build a Team

• Forming
• Personal relations are characterized by
  dependence
• Members have a desire for acceptance by the group
• Members behave to keep things simple and to avoid
  controversy
• Serious topics and feelings are avoided
• Discussion centers around orientation to tasks
  and one another
• To advance to next step, members have to risk
  discussions beyond non-threatening topics with
  possible conflict

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Steps to Build a Team

• Storming
• Characterized by competition, conflict in
  personal relations and organization of
  tasks/functions
• Conflicts arise when members are organized for
  tasks and structured for function
• Individuals have to bend to suit the group
  organization
• There will be questions over leadership,
  structure, power, and authority
• To advance to the next step, members have to move
  from a testing and proving mentality to a
  problem-solving mentality

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Steps to Build a Team

• Norming
• Characterized by cohesion and recognition
• Members are willing to change and mold their
  feelings, ideas, attitudes, and beliefs
• Leadership is shared and cliques dissolve with
  more and more sense of group belonging
• Data flow between group members increases and
  creativity is high
• Interactions between members are characterized by
  openness and sharing of information

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Steps to Build a Team

• Performing
• Not reached by all groups
• Characterized by interdependence in personal
  relations and efficiency of problem solving
• Members can work independently, in subgroups, or
  as a total unit with equal performance
• Roles and authorities can dynamically adjust to
  the changing needs of the group and individuals
• Members are both highly task and people oriented
• Group morale is high and group loyalty is intense

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Steps to Build a Team

• Adjourning
• Characterized by termination of task behavior and
  disengagement from relationships
• There will be a recognition for participation and
  achievement
• There might be a sense of fear due to the feeling
  of giving up control and inclusion in the group

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Team Building

• Team Effectiveness
• Team goals are development through team
  interaction and by members willingness
• Participation of team members is high
• Feedback is asked openly and given freely with a
  desire to help
• Decision making is participated actively by all
  members
• Leadership is distributed and shared among team
  members

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Team Building

• Team Effectiveness
• Problem solving becomes the focal point of team
  work
• Conflict is not suppressed, but openly dealt and
  managed among team members in order to improve
  team performance
• Team member resources (talents, skills,
  knowledge, and experiences) are fully identified,
  recognized, and utilized whenever appropriate.
• Risk taking and creativity are encouraged, while
  mistakes are treated as a source of learning
  rather than reasons for punishment

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Team Building

• Team Leader
• To put forward exciting vision with team members
  and keep it in front of the team
• To help the team develop principles, including
  norms, success criteria, performance quality
  standards, and reward system
• To facilitate communication and information
  exchange within the team
• To tolerate failure
• To accept group decision even with personal
  disagreement when needed
• To act as interface and buffer between team and
  rest of the world

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Team Building

• Team Member
• To take responsibility
• To be positive in determining team principles
• To have a positive attitude toward any changes
• To accomplish tasks with a strong feeling of
  control
• To make kind and constructive criticism
• Dont have to be a good friend, but need to be a
  good teammate

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Thank You

• Jiwei Ma
• jiweima_at_hotmail.com