pmchap3 organization structure
TRANSCRIPT
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Understanding the theories of Abraham Maslow, Frederick Herzberg and Douglas McGregor on motivation
Describe the three major types of formal organizational structures: functional, pure project, and matrix.
Discuss the advantages and disadvantages of the functional, pure project, and matrix organizational structures.
Understanding the theories of Abraham Maslow, Frederick Herzberg and Douglas McGregor on motivation
Describe the three major types of formal organizational structures: functional, pure project, and matrix.
Discuss the advantages and disadvantages of the functional, pure project, and matrix organizational structures.
Project Human Resource Management Objectives
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Triple Constraints Theory in PMTriple Constraints Theory in PM
Every project is constrained in different ways by its Cost goals: What should it cost? Time goals: How long should it take to
complete? Scope goals: What is the project trying to
accomplish?
Every project is constrained in different ways by its Cost goals: What should it cost? Time goals: How long should it take to
complete? Scope goals: What is the project trying to
accomplish?
Time
CostScope
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Triple Constraints Theory in PMTriple Constraints Theory in PM
Time
CostScope
Fourth Element?
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Why Projects FailWhy Projects Fail
Failure to define objectives
17%
Project Management Problems
32%
Technicalissues14%
Inexperiencein scope andcomplexity
17%
Lack of communication
20%
Source: KPMG
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People in Project Management
People are an organization’s most important assets.
The tasks of a manager are essentially people oriented. Unless there is some understanding of people, management will be unsuccessful.
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Keys to Managing PeopleKeys to Managing People Important areas related to project
management include– motivation– influence and power
OB Theory: psychologists and management theorists, including:– Maslow’s Hierarchy of Needs– Herzberg’s Motivational and Hygiene
Factors– McGregor’s Theory X and Y
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Motivation An important role of a manager is to motivate the
people working on a project. Motivation is a complex issue but it appears that
there are different types of motivation based on:
– Basic needs (e.g., food, sleep, shelter)– Personal needs (e.g., respect, self-
esteem)– Social needs (e.g., to be accepted as
part of a group)
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Motivation Motivations depend on
satisfying needs. It can be assumed that
physiological and safety needs are satisfied.
Social, esteem and self-realization needs are most significant from a managerial viewpoint.
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Need satisfaction Social
– Provide communal facilities– Allow informal communications
Esteem– Recognition of achievements– Appropriate rewards
Self-realization– Training - people want to learn more– Responsibility
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Douglas McGregor Theory X/YDouglas McGregor Theory X/Y– Douglas McGregor
Theory X–Managers assume people dislike work, avoid responsibility, lack ambition, and need close supervision.
Theory Y–Managers assume people enjoy work, accept responsibility, are innovative, and areself-controlling.
– Douglas McGregorTheory X–Managers assume people dislike work, avoid responsibility, lack ambition, and need close supervision.
Theory Y–Managers assume people enjoy work, accept responsibility, are innovative, and areself-controlling.
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Herzberg’s Two-Factor TheoryHerzberg’s Two-Factor TheoryMotivators (job satisfaction)– Motivate and satisfy workers in the job
context (intrinsic) – Are associated with higher order needs
Hygiene factors (job dissatisfaction)– Can only prevent dissatisfaction with job
content (extrinsic)– Are associated with lower order needs– Create dissatisfaction if absent in the
workplace
Motivators (job satisfaction)– Motivate and satisfy workers in the job
context (intrinsic) – Are associated with higher order needs
Hygiene factors (job dissatisfaction)– Can only prevent dissatisfaction with job
content (extrinsic)– Are associated with lower order needs– Create dissatisfaction if absent in the
workplace
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Factors characterizing events on the job that led to job dissatisfaction
Factors characterizing events on the job that led to job satisfaction
Motivators
Hygiene Factors
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Personality types
Needs hierarchy is an over-simplification. Must also take into account different
personality types:
– Task-oriented– Self-oriented– Interaction-oriented
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Personality types Task-oriented.
– The motivation for doing the work is the work itself.
Self-oriented. – The work is a means to an end which is
the achievement of individual goals - e.g., to get rich, to travel etc.
Interaction-oriented– The principal motivation is the presence
and actions of co-workers. People go to work because they like to go to work.
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Which Organization Structure Is Best For Project Management?
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Project OrganizationProject OrganizationHow is the project organized in its parent organization.
–Who is in charge?–who does each individual report to?–at what levels resource allocation decisions made?–Type of Project organizational behavior?
How is the project organized in its parent organization.
–Who is in charge?–who does each individual report to?–at what levels resource allocation decisions made?–Type of Project organizational behavior?
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What is Your Task?What is Your Task?
Your task as a Project Manager is to create an organizational structure that:
1. Supports your strategic project plan
2. Encourages the knowledge, skills and attitudes required to support the strategic project plan
3. Encourages people and groups to cooperate and work together effectively.
Your task as a Project Manager is to create an organizational structure that:
1. Supports your strategic project plan
2. Encourages the knowledge, skills and attitudes required to support the strategic project plan
3. Encourages people and groups to cooperate and work together effectively.
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Choosing the Appropriate Project Management StructureChoosing the Appropriate Project Management Structure
Factors:– Size of project– Strategic importance– Novelty and need for innovation– Need for integration– Budget and time constraints– Stability of resource requirements.
Factors:– Size of project– Strategic importance– Novelty and need for innovation– Need for integration– Budget and time constraints– Stability of resource requirements.
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Choosing the Appropriate Project Management Organization Structure
Choosing the Appropriate Project Management Organization Structure
Two Questions:
– How important is project management to the success of the firm?
– Resource availability—Cash, people, equipment, etc.
Two Questions:
– How important is project management to the success of the firm?
– Resource availability—Cash, people, equipment, etc.
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Structure and Culture AffectStructure and Culture Affect
Behavior
Motivation
Performance
Teamwork and cooperation
Intergroup and Interdepartmental relationships
Behavior
Motivation
Performance
Teamwork and cooperation
Intergroup and Interdepartmental relationships
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What bearing does organizational structure have on organizational behavior?What bearing does organizational structure have on organizational behavior? As a project manager, you (or your team) must
decide:
– How you want your people to behave
– What attitudes you want to encourage
– What you want your people to accomplish Then you can design the organization’s structure
to encourage the development of:– Cultural values and norms (expectations about
appropriate individual and group behavior commonly agreed upon by members)
– Desired attitudes, behaviors, and goals.
As a project manager, you (or your team) must decide:
– How you want your people to behave
– What attitudes you want to encourage
– What you want your people to accomplish Then you can design the organization’s structure
to encourage the development of:– Cultural values and norms (expectations about
appropriate individual and group behavior commonly agreed upon by members)
– Desired attitudes, behaviors, and goals.
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Determinants of StructureDeterminants of Structure
Human Resources: the final factor affecting organizational structure. Higher skilled workers who need to work in
teams usually need a more flexible structure. Higher skilled workers often have
professional norms
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Choosing an Organizational FormChoosing an Organizational Form Functional Form
– focus is on in-depth application of a technology – Most of the talent/expertise resides in one
functional area Pure Project Form
– firm engages in a large number of similar projects (construction)
– one-time, highly specific unique tasks that is not appropriate for a single functional area
Matrix Form– integration of inputs from several functional areas– technical specialists are not required full-time
Functional Form– focus is on in-depth application of a technology – Most of the talent/expertise resides in one
functional area Pure Project Form
– firm engages in a large number of similar projects (construction)
– one-time, highly specific unique tasks that is not appropriate for a single functional area
Matrix Form– integration of inputs from several functional areas– technical specialists are not required full-time
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GeneralManager
Engineering Production Sales MarketingAdminis-tration Director Level
Division Level
Department Level
Section Level Functional Responsibility
The functional Organization
Admin.
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The functional OrganizationThe functional Organization Characterized by
– stratified levels of management – vertical lines of authority– work that is partitioned according to specialties of
discipline (i.e., the “function”). Objective is to emphasize technical excellence The manager of the lead/dominant functional area is
usually the PM PM usually needs to acquire/negotiate
resources/expertise from other functional areas– source of conflict? Who is in charge? What is in it
for us?
Characterized by – stratified levels of management – vertical lines of authority– work that is partitioned according to specialties of
discipline (i.e., the “function”). Objective is to emphasize technical excellence The manager of the lead/dominant functional area is
usually the PM PM usually needs to acquire/negotiate
resources/expertise from other functional areas– source of conflict? Who is in charge? What is in it
for us?
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Advantages of Functional OrganizationAdvantages of Functional Organization Maximum flexibility in the use of staff Individual experts switched between different
projects Maintains a pool of specialists and talent Provides clearly defined communication
channels Base of technological continuity The functional division contains the normal path
of advancement for the individuals whose expertise is in the functional area
Maximum flexibility in the use of staff Individual experts switched between different
projects Maintains a pool of specialists and talent Provides clearly defined communication
channels Base of technological continuity The functional division contains the normal path
of advancement for the individuals whose expertise is in the functional area
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Disadvantages of Functional OrganizationDisadvantages of Functional Organization
Client is not the focus of activity Less concerned with the project objectives and
goals than with functional activities and objectives one individual is not responsible for the project slow communication and decision making Lack of big picture (not a holistic approach) Tendency to sub-optimize
Client is not the focus of activity Less concerned with the project objectives and
goals than with functional activities and objectives one individual is not responsible for the project slow communication and decision making Lack of big picture (not a holistic approach) Tendency to sub-optimize
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Pure Project Structure
General Manager
Project AManager
Project BManager
Project CManager
ENG. MFG.ENG. MFG. ENG. MFG.
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Pure Project Organization
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Projectized Structure AdvantagesProjectized Structure Advantages It provides complete line authority over the
project (i.e., strong control through a single project authority).
The project participants work directly for the project manager.
There are strong communications channels. Staffs can maintain expertise on a given
project without sharing key personnel. Very rapid reaction time is provided.
It provides complete line authority over the project (i.e., strong control through a single project authority).
The project participants work directly for the project manager.
There are strong communications channels. Staffs can maintain expertise on a given
project without sharing key personnel. Very rapid reaction time is provided.
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Advantages (Continued)Advantages (Continued) Personnel demonstrate loyalty to the project;
better morale with product identification. A focal point develops for out-of-company
customer relations. There is flexibility in determining time
(schedule), cost, and performance trade-offs. Interface management becomes easier as unit
size is decreased. Upper-level management maintains more free
time for executive decision making.
Personnel demonstrate loyalty to the project; better morale with product identification.
A focal point develops for out-of-company customer relations.
There is flexibility in determining time (schedule), cost, and performance trade-offs.
Interface management becomes easier as unit size is decreased.
Upper-level management maintains more free time for executive decision making.
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Projectized Structure DisadvantagesProjectized Structure Disadvantages Cost of maintaining this form in a multi-
project company would be prohibitive due to duplication of effort, facilities, and personnel; inefficient usage.
There exists a tendency to retain personnel on a project long after they are needed. Upper-level management must balance workloads as projects start up and are phased out.
Cost of maintaining this form in a multi-project company would be prohibitive due to duplication of effort, facilities, and personnel; inefficient usage.
There exists a tendency to retain personnel on a project long after they are needed. Upper-level management must balance workloads as projects start up and are phased out.
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Disadvantages (Continued)Disadvantages (Continued) Technology suffers because, without strong
functional groups, outlook of the future to improve company’s capabilities for new programs would be hampered (i.e., no perpetuation of technology).
Control of functional (i.e., organizational) specialists requires top-level coordination.
There is a lack of opportunities for technical interchange between projects.
There is a lack of career continuity and opportunities for project personnel.
Technology suffers because, without strong functional groups, outlook of the future to improve company’s capabilities for new programs would be hampered (i.e., no perpetuation of technology).
Control of functional (i.e., organizational) specialists requires top-level coordination.
There is a lack of opportunities for technical interchange between projects.
There is a lack of career continuity and opportunities for project personnel.
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A Matrix Organization
ProjectBeta
manager
ProjectBeta
manager
Productionsupportgroup
Productionsupportgroup
Accountingsupportgroup
Accountingsupportgroup
Engineeringsupportgroup
Engineeringsupportgroup
ProjectAlpha
manager
ProjectAlpha
manager
Productionsupportgroup
Productionsupportgroup
Accountingsupportgroup
Accountingsupportgroup
Engineeringsupportgroup
Engineeringsupportgroup
Productiondepartment
Productiondepartment
Accountingdepartment
Accountingdepartment
Engineeringdepartment
Engineeringdepartment
MachineryDivision
MachineryDivision
Functional authority Project authority
Fig. 13.5
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The Matrix Organization
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The Matrix OrganizationThe Matrix Organization
A pure project organization overlaid on the functional divisions of the parent firm
A mix or hybrid structure, incorporating both the functional and pure project approaches with the hope of optimizing the strengths and minimizing the weaknesses of each
Its objective is control and technical excellence can take on a wide variety of forms on the
continuum from pure project to functional project organization
A pure project organization overlaid on the functional divisions of the parent firm
A mix or hybrid structure, incorporating both the functional and pure project approaches with the hope of optimizing the strengths and minimizing the weaknesses of each
Its objective is control and technical excellence can take on a wide variety of forms on the
continuum from pure project to functional project organization
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Advantages of a Matrix OrganizationAdvantages of a Matrix Organization PM responsible for the project Reservoir of technical talent reduces duplication
therefore cost Flexible utilization of personnel across projects Holistic approach-has the project and company
“big picture” Project team members maintain home base-
less anxiety after project completion Provides a project-customer focal point
PM responsible for the project Reservoir of technical talent reduces duplication
therefore cost Flexible utilization of personnel across projects Holistic approach-has the project and company
“big picture” Project team members maintain home base-
less anxiety after project completion Provides a project-customer focal point
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Disadvantages of a Matrix Organization Disadvantages of a Matrix Organization Violates one-boss principle Authority and responsibility lines are at times
unclear Communication may be chaotic more effort and time are needed to initially define
policies and procedures response time may be slow PM controls administrative decisions (when and
what the people assigned to the project will do); functional managers control who will be assigned to the project
Violates one-boss principle Authority and responsibility lines are at times
unclear Communication may be chaotic more effort and time are needed to initially define
policies and procedures response time may be slow PM controls administrative decisions (when and
what the people assigned to the project will do); functional managers control who will be assigned to the project
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Organization and Project Planning Organizational StructureOrganization and Project Planning Organizational Structure
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1. Define the project with a statement of the objective(s) that identifies the major outcomes desired
2. Determine the key tasks associated with each objective and locate the units in the parent organization that serve as functional “homes” for these types of tasks
3. Arrange the key tasks by sequence and decompose them into work packages
Choosing an Organizational Form Criteria for the selection of a project organization:
Choosing an Organizational Form Criteria for the selection of a project organization:
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P rep areA irc ra ft
In sp ec tA irc ra ft
R ec tifyA irc ra ft
C h eckR ec tifica tion
M ain ten an ce
Work PackageProject Title
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4. Determine which organizational units are
required to carry out the work packages and
which units will work particularly closely with
which others
5. List any special characteristics or assumptions
associated with the project
6. In light of items 1-5, and with full cognizance of
the pros and cons associated with each
structural form, choose a structure
Choosing an Organizational Form Criteria for the selection of a project organization:
Choosing an Organizational Form Criteria for the selection of a project organization:
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A
P rep areA irc ra ft
B C D
In sp ec tA irc ra ft
E F G
R ec tifyA irc ra ft
H
C h eckR ec tifica tion
M ain ten an ce
Activities
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Activity Description Inspection Engineers
Fitters
A Position & jack up aircraft. Clean undercarriage & remove wheels
- 4
B Inspect engines 1 3
C Inspect airframe 2 1
D Inspect undercarriage 1 3
E Rectify airframe - 3
F Rectify engines - 2
G Rectify undercarriage & refit wheels - 1
H Check rectification & sign off 3 1
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Maintenance Project
Planning
Dept.
Power Plant
Dept.
Airframe
Dept.
Plant&Equipment
Dept.
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Choosing an Organizational FormChoosing an Organizational Form
Selecting the organizational interface between the
project and the firm is a difficult task
– The choice is determined by the situation, but is
also partly intuitive
– Must consider the nature of the potential project,
the characteristics of the various organization
options, the advantages and disadvantages of each,
the cultural preferences of the parent organization,
and then make the best compromise that can be
made
Selecting the organizational interface between the
project and the firm is a difficult task
– The choice is determined by the situation, but is
also partly intuitive
– Must consider the nature of the potential project,
the characteristics of the various organization
options, the advantages and disadvantages of each,
the cultural preferences of the parent organization,
and then make the best compromise that can be
made 1
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1. Define the project with a statement of the objective(s) that identifies the major outcomes desired
2. Determine the key tasks associated with each objective and locate the units in the parent organization that serve as functional “homes” for these types of tasks
3. Arrange the key tasks by sequence and decompose them into work packages
Choosing an Organizational Form Criteria for the selection of a project organization:
Choosing an Organizational Form Criteria for the selection of a project organization:
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P rep areA irc ra ft
In sp ec tA irc ra ft
R ec tifyA irc ra ft
C h eckR ec tifica tion
M ain ten an ce
Work PackageProject Title
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4. Determine which organizational units are
required to carry out the work packages and
which units will work particularly closely with
which others
5. List any special characteristics or assumptions
associated with the project
6. In light of items 1-5, and with full cognizance of
the pros and cons associated with each
structural form, choose a structure
Choosing an Organizational Form Criteria for the selection of a project organization:
Choosing an Organizational Form Criteria for the selection of a project organization:
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A
P rep areA irc ra ft
B C D
In sp ec tA irc ra ft
E F G
R ec tifyA irc ra ft
H
C h eckR ec tifica tion
M ain ten an ce
Activities
52
Activity Description Inspection Engineers
Fitters
A Position & jack up aircraft. Clean undercarriage & remove wheels
- 4
B Inspect engines 1 3
C Inspect airframe 2 1
D Inspect undercarriage 1 3
E Rectify airframe - 3
F Rectify engines - 2
G Rectify undercarriage & refit wheels - 1
H Check rectification & sign off 3 1
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Maintenance Project
Planning
Dept.
Power Plant
Dept.
Airframe
Dept.
Plant&Equipment
Dept.
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The Project TeamThe Project Team To staff a project, the project manager works from a forecast
of personnel needs over the life cycle of the project
– A work breakdown structure (WBS) is prepared to determine the exact nature of the tasks required to complete the project
– Skills requirements for these tasks are assessed and like skills are aggregated to determine work force needs
– From this base, the functional departments are contacted to locate individuals who can meet these needs
– Certain tasks may be subcontracted
To staff a project, the project manager works from a forecast of personnel needs over the life cycle of the project
– A work breakdown structure (WBS) is prepared to determine the exact nature of the tasks required to complete the project
– Skills requirements for these tasks are assessed and like skills are aggregated to determine work force needs
– From this base, the functional departments are contacted to locate individuals who can meet these needs
– Certain tasks may be subcontracted
4
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The Project TeamThe Project Team There are some people who are more critical to the
project’s success than others and should report directly to the project manager or the project manager’s deputy:
– Senior project team members who will be having a
long-term relationship with the project
– Those with whom the project manager requires
continuous or close communication
– Those with rare skills necessary to project success
There are some people who are more critical to the project’s success than others and should report directly to the project manager or the project manager’s deputy:
– Senior project team members who will be having a
long-term relationship with the project
– Those with whom the project manager requires
continuous or close communication
– Those with rare skills necessary to project success
5
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Meeting schedule and cost goals, without compromising performance is a technical problem, with a human dimension
– Project professionals tend to be perfectionists
– Pride in workmanship leads the team member to
improve (and thus change) the product
– These changes cause delays in the project
Meeting schedule and cost goals, without compromising performance is a technical problem, with a human dimension
– Project professionals tend to be perfectionists
– Pride in workmanship leads the team member to
improve (and thus change) the product
– These changes cause delays in the project
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Human Factors and the Project TeamHuman Factors and the Project Team
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Human Factors and the Project TeamHuman Factors and the Project Team Motivating Project Team Members:
– The project manager often has little control over the economic rewards and promotions of project team members, but this does not mean he/she cannot motivate members of the team
– How are technical employees motivated? Recognition Achievement The work itself Responsibility Advancement The chance to learn new skills
Motivating Project Team Members:– The project manager often has little control over the
economic rewards and promotions of project team members, but this does not mean he/she cannot motivate members of the team
– How are technical employees motivated? Recognition Achievement The work itself Responsibility Advancement The chance to learn new skills 7
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Human Factors and the Project TeamHuman Factors and the Project Team Empowerment of project teams is also a motivational factor:
– 1. It harnesses the ability of the team members to manipulate tasks so that project objectives are met. The team is encouraged to find better ways of doing things
– 2. Professionals do not like being managed. Participative management does not tell them how
to work but given a goal, allows them to design their own methods
– 3. The team members know they are responsible and accountable for achieving the project deliverables
– 4. There is a good chance that synergistic solutions
will result from team interaction
Empowerment of project teams is also a motivational factor:– 1. It harnesses the ability of the team members to
manipulate tasks so that project objectives are met. The team is encouraged to find better ways of doing things
– 2. Professionals do not like being managed. Participative management does not tell them how
to work but given a goal, allows them to design their own methods
– 3. The team members know they are responsible and accountable for achieving the project deliverables
– 4. There is a good chance that synergistic solutions
will result from team interaction 8
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SummarySummary
There are various organizational structures that can be used for projects including:
– Projects within functional organizations, pure
project and matrix structures
Selecting the appropriate project organizational
form is critical to the success of the project
There are various organizational structures that can be used for projects including:
– Projects within functional organizations, pure
project and matrix structures
Selecting the appropriate project organizational
form is critical to the success of the project
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SummarySummary A useful procedure for selecting an organizational form is:
– Identify the specific outcomes desired
– Determine the key tasks to attain these outcomes
– Sequence the key tasks
– Determine which project subsystems will be assigned which steps and which subsystems must closely cooperate
– Identify any firm or project characteristics
– Consider all pros and cons, then make a decision
A useful procedure for selecting an organizational form is:
– Identify the specific outcomes desired
– Determine the key tasks to attain these outcomes
– Sequence the key tasks
– Determine which project subsystems will be assigned which steps and which subsystems must closely cooperate
– Identify any firm or project characteristics
– Consider all pros and cons, then make a decision
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Sample ExerciseSample Exercise Consider the following statements of sets of
project and decide which form of project structure would be most appropriate for managing these projects.
Consider the following statements of sets of project and decide which form of project structure would be most appropriate for managing these projects.
Designing and developing a new product
Matrix structure!
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Sample ExerciseSample Exercise Consider the following statements of sets of
project and decide which form of project structure would be most appropriate for managing these projects.
Consider the following statements of sets of project and decide which form of project structure would be most appropriate for managing these projects.
Designing and implementing the ISO 9000 quality system
Functional structure!
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Sample ExerciseSample Exercise
In what type of organization structure is team building likely to be most difficult?
In what type of organization structure is team building likely to be most difficult?
Matrix structure!
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Sample ExerciseSample Exercise Project Management organization structure
are design to perform specific functions in the most efficient manner, the major factors that should influence the development of a project management organization are:
Project Management organization structure are design to perform specific functions in the most efficient manner, the major factors that should influence the development of a project management organization are:
•Type of Project
•Type of Staffing
•Communication Channels
•Attitude toward Risks
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Define the project objectives Determine the key tasks to attain these objectives Arrange the key tasks by sequence and
decompose them into work packages (WBS) Determine which organizational units are required
to carry out the work packages and which units will work particularly closely with which others
List any special characteristics or assumptions associated with the project
Select a structure form most advantages to the project
Sample ExerciseSample Exercise
What are the steps in forming a Project Management organization structure:
What are the steps in forming a Project Management organization structure:
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