Project Management Session 9

Project Organization, Structure and

Culture

Project Organization and Culture

Introduction
When project is approved, the question is,
how will it be implemented
Need to consider the project management
structures that optimize project delivery
and fit with classical functional structure
That is however not the only consideration
with implementation the organization
culture is another very important factor
Culture the way we do it here

Project Organization and Culture

Project Management Structures

Challenges to Organizing Projects:
A good system balances the needs of the parent
organization and the project;
This is essentially achieved by defining the interface in
terms of authority, allocation of resources and eventual
integration of the project outcomes with the parent
organization;
Project based on breakdown of tasks and delivery in
according to defined timeline; Function breakdown of
tasks in simplified repetitive work;
Projects are multidisciplinary and require coordination
across disciplines;
Function, based on clustering (silos).

Project Organization and Culture

Project Management Structures

Organizing Projects: Functional Organization:
Different segments of the project are delegated to
respective functional units;
Coordination is maintained through normal
management channels;
Used when the interest of one functional area
dominates the project or one functional area has a
dominant interest in the projects success.

Project Organization and Culture

Functional Organizations

Project Organization and Culture

Functional Organization of
Projects
Advantages when has strong functional focus No Structural Change:
No radical change in design of parent organization;
Flexibility:
Specifically the use of staff, needed from all functions;
In-Depth Expertise:
Specifically if it has a strong functional focus;
Easy Post-Project Transition:
A very important consideration, specifically in expertise
intensive projects, for example IT implementation

Project Organization and Culture

Functional Organization of
Projects

Disadvantages specifically for projects with broader, multifunctional scope Lack of Focus:
Takes focus of functional routine work;
Could also take focus of project to do routine work;
Different functions attach different priorities to a project;
Poor Integration:
Could have poor integration over functions, as functions care only for
their own area and not whole project;
Slow:
Functional organization silo. Project, cross functional;
Lack of Ownership:
Levels of commitment for a project differ, and is always considered in
terms of contribution to own professional development.

Project Organization and Culture

Project Management Structures

Organizing Projects: Dedicated Teams:
Teams operate as separate units under the
leadership of a full-time project manager;
In a projectized organization where projects are
the dominant form of business, functional
departments are responsible for providing support
for its teams;
Interface with parent organization will differ;
Amount of control from parent will also differ.

Project Organization and Culture

Dedicated Project Team

Example
the mining
industry

Project Organization and Culture

Project Organization: Dedicated

Team

Advantages:
Simple:
Functional organization stays in tact while project organization
operates independently;
Fast:
Project teams can focus and not distracted by functional work;
Cohesion:
Because people have a common focus there is a tendency
towards higher levels of motivation and cohesion in the team;
Cross-Functional Integration;
Can source one dedicated team before hand from different
functional specialties under proper guidance.

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Project Organization and Culture

Project Organization: Dedicated

Team

Disadvantages:
Expensive:
New management positions and dedicated human resources.
Could be expensive and loose economies of scale;
Internal Strife:
Us and them climate also might be difficult to assimilate
staff back into parent organization once projects end;
Limited Technological Expertise:
Expertise limited to that of the people who are assigned type
of in breeding;
Difficult Post-Project Transition:
For larger projects a full reintegration is required-if not done
well could have negative effect on motivation and even loss of
valuable expertise.
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Project Organization and Culture

Project Organizational Structure

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Project Organization and Culture

Project Management Structures

Organizing Projects: Matrix Structure:
Hybrid organizational structure (matrix) is overlaid on
the normal functional structure:
Overlay functional and project structure;
Two chains of command (functional and project);
Project participants report simultaneously to both
functional and project managers.
Matrix structure optimizes the use of resources.
Allows for participation on multiple projects while
performing normal functional duties;
Achieves a greater integration of expertise and project
requirements.

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Project Organization and Culture

Matrix Organization Structure

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Project Organization and Culture

Matrix Organization Structure

Project Manager

Negotiated Issues

Functional Manager

What has to be done

Who will do the task

How will it be done?

When should it be done

Where will the task be

done

How much money is

available to do task

Why will the task be done

How will project

involvement impact on
normal functional
activities

How well has the project

in total achieved what
supposed to

Is the tasks satisfactorily

completed

How well has functional

input be integrated

Responsibilities
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Project Organization and Culture

Project Management Structures

Relative power of project manager visa a vie
functional manager often determine success of
format
Reporting level and place in chain of command
Location of team members
Who is responsible for performance appraisal of
team members

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Project Organization and Culture

Different Matrix Forms

Functional (also Weak or Lightweight) Form:

Matrices in which the authority of the functional manager
predominates and the project manager has indirect
authority project manager merely a coordinator
Balance (or Middleweight) Form:
The traditional matrix form in which the project manager
sets the overall plan and the functional manager determines
how work to be done thus there is balance in reporting
relationships and shared responsibility
Strong (Heavyweight) Form:
Resembles a project team in which the project manager has
broader control and functional departments act as
subcontractors to the project

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Project Organization and Culture

Project Organization: Matrix Form

Advantages:
Efficient:
Resources can be shared;
Tasks divided on a need to basis;
Reduces duplication of the projectized structure;
Strong Project Focus:
Project manager responsible for coordinating and integrating
Creates holistic focus;
Easier Post-Project Transition:
Because of the link with functional unit the transition is much
easier;
Flexible:
Brings more balance in the use of resources for projects

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Project Organization and Culture

Project Organization: Matrix Form

Disadvantages:
Dysfunctional Conflict:
Could bring tension due to critical insights from function and
project managers;
In theory good but could be counter productive;
Infighting:
Resources notoriously scare (specifically people) this and
differing priorities lead to infighting;
Stressful:
Violates principle of unity of command also role and status
variation could create stress;
Slow:
The need for multidisciplinary, cross functional input can be
laborious and time consuming
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Project Organization and Culture

Project Management Structures

Organizing Projects: Network Organizations:
Turn of the century - radical shift in organization
formats;
Network organization - an alliance of several
organizations for the purpose of creating products or
services;
A hub or core firm with strong core competencies
outsources key activities to a collaborative cluster of
satellite organizations;
Core competencies usually include marketing,
intellectual capital rights and also research and
development.

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Project Organization and Culture

Mountain Bicycle Network Project

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Project Organization and Culture

Project Organization: Network

Form

Advantages:
Cost Reduction:
Companies can secure competitive prices for contracted
services;
Overheads reduced as host company does not have to
maintain the contracted services;
High Level of Expertise:
Does not have to keep abreast of technology advances;
Can focus on core competence development;
Flexible:
Not constrained by their won resources and talent but can
pursue wide range of projects;
Globalization is also a viable option by working with foreign
partners.
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Project Organization and Culture

Project Organization: Network

Form
Disadvantages:
Coordination of Breakdowns:
Coordination of professionals from different
organizations can be challenging especially if project
work requires close collaboration and mutual adjustment;
Well defined services level agreements are important
also deliverables;
Loss of Control:
Nature of the format is such that control is lost. Thus only
control is in terms of the end product need to build in
safe guards;
Conflict:
Interpersonal conflict is there is not shared priorities,
values and culture.
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Project Organization and Culture

Rated Effectiveness of Different Project

Structures by Type of Project

Source: Larson, E. W., and Gobeli, D. H., Matrix Management: Contradictions and
Insights, California Management Review, vol. 29, no. 4 (Summer 1987), p. 137.

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Project Organization and Culture

Choosing the Appropriate Project

Management Structure
Organization (Form) Considerations:
How important is the project to the firms
success?
What percentage of core work involves projects?
What level of resources (human and physical) are
available?
If over 75% is project driven then probably a
project organization;
If mix between product and project driven, prbably
a matrix organization;
If very few project, probably an informal
arrangement (task team).
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Project Organization and Culture

Choosing the Appropriate Project

Management Structure
Project considerations (the higher the levels of these factors,
the more probability of autonomy and authority to the project
manager):
Size of project;
Strategic importance;
Novelty and need for innovation;
Need for integration (number of departments involved);
Environmental complexity (number of external interfaces);
Budget and time constraints;
Stability of resource requirements.

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Project Organization and Culture

Organizational Culture

Organizational Culture Defined:

A system of shared norms, beliefs, values, and assumptions
which bind people together, thereby creating shared
meanings;
The personality of the organization that sets it apart from
other organizations:
Provides a sense of identify to its members;
Helps legitimize the management system of the
organization;
Clarifies and reinforces standards of behavior;
The way we do things here

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Project Organization and Culture

Organizational Culture

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Project Organization and Culture

Key Dimensions Defining

an Organizations Culture

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Project Organization and Culture

Identifying Cultural Characteristics

Study the physical characteristics of an organization:

Artifacts;
Time and attendance;
Read about the organization:
Reports, minutes of meetings, disciplinary cases;
Observe how people interact within the organization:
Conflict;
Conformism;
Decision making;
Interpret stories and folklore surrounding the organization:
Stories;
Heros;
Crises;
What are the values in action look at priorities.

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Project Organization and Culture

Organizational Culture
Diagnosis Worksheet

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Project Organization and Culture

Implications of Organizational Culture

for Organizing Projects
Challenges for Project Managers in Navigating
Organizational Cultures:
Interacting with the culture and subcultures of the
parent organization;
Interacting with the projects clients or customer
organizations;
Interacting with other organizations connected to
the project;
The culture is the river and the project is the boat.

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Project Organization and Culture

Cultural Dimensions Supportive

of Project Management

FIGURE 3.9
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Project Organization and Culture

Mechanisms for Sustaining

Organizational Culture

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Project Organization and Culture

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