The main goals of this chapter are to: Understand the different project organisational structures that broadly define how the project fits with the organisational structures that may already exist in an organisation, realise the importance of an organisation’s culture and the effect it can have on the management of a project.
CHAPTER Project Organisational Structures and Cultures Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 4-1 Learning Elements 4.1 Understand the different project organisational structures that broadly define how the project fits with the organisational structures that may already exist in an organisation 4.2 Realise the importance of an organisation’s culture and the effect it can have on the management of a project Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 4-2 Project Management Structures Challenges to organising projects • The uniqueness and short duration of projects relative to ongoing longer-term organisational activities • The multidisciplinary and cross-functional nature of projects creates authority and responsibility dilemmas Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 4-3 Project Management Structures (cont.) Functional organisations Dedicated project teams Matrix arrangement • Weak matrix • Balanced matrix • Strong matrix Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 4-4 Functional Organisations • 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 project’s success Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 4-5 Functional Organisations (cont.) Advantages Disadvantages • No structural change • Lack of focus • Poor integration • Flexibility • Slow • In-depth expertise • Lack of ownership • Easy post-project transition Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3–6 4-6 Functional Organisations (cont.) Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 4-7 Dedicated Project Teams • Teams operate as separate units under the leadership of a full-time project manager • In a projectised organisation, where projects are the dominant form of business, functional departments are responsible for providing support for its teams Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 4-8 Dedicated Project Teams (cont.) Advantages Disadvantages • Simple • Expensive • Fast • Internal strife • Cohesive • Limited technological expertise • Crossfunctional integration Difficult post-project transition Copyright â 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3–9 4-9 Dedicated Project Teams (cont.) Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 4-10 Dedicated Project Teams (cont.) Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 4-11 Matrix Organisations Weak form The authority of the functional manager predominates and the project manager has indirect authority Balanced form he project manager sets the overall plan and the functional manager determines how work to be done Strong form The project manager has broader control and functional departments act as subcontractors to the project Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 4-12 Matrix Organisations (cont.) Advantages Disadvantages • Efficient • Dysfunctional conflict • Strong project focus • Infighting • Easier postproject transition • Flexible • Stressful Slow Copyright â 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3–13 4-13 Matrix Organisations (cont.) Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 4-14 What is the Right Project Management Structure? Organisation (form) considerations • How important is the project to the firm’s success? • What percentage of core work involves projects? • What level of resources (human and physical) are available? Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3–15 4-15 What is the Right Project Management Structure? (cont.) Project considerations • Size of project • Strategic importance • Novelty and need for innovation • Need for integration • Environmental complexity • Budget and time constraints Stability of resource requirements Copyright â 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3–16 4-16 Organisational Culture system of shared norms, beliefs, values and assumptions which bind people together, thereby creating shared meanings Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 4-17 Organisational Culture (cont.) he ‘personality’ of the organisation that sets it apart from other organisations • Provides a sense of identify to its members • Helps to legitimise the management system of the organisation • Clarifies and reinforces standards of behaviour Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 4-18 Key Dimensions Of Organisational Culture 10 Member identity Team emphasis Management focus Unit integration Control Risk tolerance Reward criteria Conflict tolerance Means versus end orientation Open-systems focus Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 4-19 Organisational Culture Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 4-20 Identifying Cultural Characteristics tudy the physical characteristics of an organisation ublic documents Read about the organisation ehaviour Observe how people interact within the organisation olklore Interpret stories and folklore surrounding the Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 4-21 Identifying Cultural Characteristics (cont.) Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 4-22 Key Terms • • • • • • • • • • balanced matrix dedicated project team functional structure matrix organisational culture projectitis Project Management Office (PMO) projectised organisation strong matrix weak matrix Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 4-23 ... culture and the effect it can have on the management of a project Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 4-2 Project Management. .. Management Structures Challenges to organising projects • The uniqueness and short duration of projects relative to ongoing longer-term organisational activities • The multidisciplinary and cross-functional...Learning Elements 4.1 Understand the different project organisational structures that broadly define how the project fits with the organisational structures that may already exist in an organisation