Project Management: A Managerial Approach Meridith and Mantel

Kelly Brown 5/2/97

Chapter 4 4.1 Project as part of the functional organization For functionally organized projects, the project is assigned to the functional unit that has the most interest in ensuring its success or can be the most helpful implementing it. Assuming the appropriate functional unit has been chose for the projects home, there are several advantages to this structure: 1. Maximum flexibility in the use of the staff 2. Individual experts can be used by many different projects 3. Specialists can be grouped to share knowledge and experience 4. Functional group can serve as a basis for continuity when individuals choose to leave. 5. Functional organization contains the normal path of advancement. Disadvantages include: 1. Lack of client focus and concern as the group has its own work to do. 2. Activities are usually oriented toward ones particular to the groups function 3. Occasionally no individual is given full responsibility for the project, resulting in a lack of coordination and ensuing chaos 4. Response to client needs is slow and arduous 5. Tendency to suboptimize the project 6. Weak motivation due to project is out of mainstream of activity and interest 7. Structure does not favor a holistic approach to the project. 4.2 Pure Project Organization A pure project organization is separate from the parent system. It is a self contained unit with its own technical staff, administration, and tied to the parent organization only by periodic reports and oversight. Advantages are:

1. Project Manager (PM) has full line authority over the project 2. Project workforce members are directly responsible to the PM 3. Ability to make swift decisions is enhanced because of centralized authority 4. Unity and continuity of command exists 5. Simple and flexible organizational structure 6. holistic approach to the project Disadvantages are: 1. Duplication of effort on multiple projects due to staffing levels of each project 2. Tendency of PM to stockpile resources and materials to ensure availability when needed, or just in case 3. Pure project approach tends to foster inconsistency in the way policies and procedures are carried out. 4. Project takes on a life of its own team members develop bonds, a we-they divisiveness grows (projectitis) 5. Worry about life after the project ends tends to make the project last longer than necessary 43 Matrix Organization Matrix organization is an attempt to combine functional and pure project organizations to couple the positive aspects of both and minimize the negative. Advantages are: 1. Project as a point of emphasis PM takes the responsibility for managing the project. 2. Project has reasonable access to all required resources without having to maintain them draws from the functional resource pool as required 3. Less anxiety about what happens when the project is completed 4. Response to client is as rapid as pure project 5. Project has access to the administrative units of the parent firm to maintain consistency w/ policies, practices and procedures

Project Management: A Managerial Approach Meridith and Mantel

Kelly Brown 5/2/97

Disadvantages include: 1. Delicate balance of focus of decision making power between PM and functional manager 2. Multiple projects have to be monitored as a set to derive the benefits of a matrix organization 3. Strong matrix organizations have problems shutting down projects similar to pure project organizations 4. Division of decision making responsibilities between PM (administrative decisions) and functional manager (technological decisions) is complex and not so clear for the operating PM 5. Project members have at least two bosses, the functional and the PM. This can lead to confusion and disorder. 4.4 Mixed Organizational Systems Creating organizations within the larger company structure allows a business to be more flexible and to act like a smaller business. Other organizational structures include organizing products by project, organizing by territory 4.5 Choosing an organizational form Choice is determined by the situation, but is partly intuitive. Use the following criteria to narrow the choice:
1. Define the project with a statement of the objectives that identifies the major

outcome desired
2. Determine the key tasks associated with each objective and locate the functional

homes of these objectives

3. Arrange the key tasks by sequence and decompose them into work packages 4. Determine which project subsystems are required and which work closely with which 5. Recognizing all of the above, choose a structure.

PROJECT CONTROL Monitoring indicates that:- Project is behind time-schedule, and/or-Project has exceeded budget, and/or-Quality of materials or finished work is below standard, and/or-Productivity is lower than as planned, etc. How can we tell when Project Control is needed? Performance Unexpected technical problems arise Insufficient resources are unavailable when needed Quality or reliability problems occur Owner/Client requires changes in technical specifications Inter functional complications and conflicts arise Market changes that increase/decrease the projects value Inter functional complications and conflicts arise InterMarket changes that increase/decrease the project How can we tell when Project Control is needed? Cost Technical difficulties that require more resources Technical resources--Scope of work increases Scope increases Bid amount (accepted for the contract award) is too low Reporting of the monitoring results are poor/late Reporting late Project budgeting for contractor cash flows not done right Project right Changes in market prices of the inputs Changes inputs How can we tell when Project Control is needed?
Page 4 of 13

Time Technical difficulties require more time to solve Technical solve Scope of work increases Scope increases--Unexpected utilities needing relocation Task sequencing not done right Task right--Required material, labor/equipment unavailable when needed. Key preceding tasks were not completed on time. 2. Resources for Project Control 1. Money 2. Machinery (Equipment) 3. Materials and Supplies Materials Supplies 4. Manpower (Labor and Supervision) Elements of Project Control Manpower related control Machinery related control Money related control Material related control Project control serves two major functions 1-It ensures regular monitoring of performance 2-It motivates project personal to strive for achieving project objectives.

Project Management: A Managerial Approach Meridith and Mantel

Kelly Brown 5/2/97

Reasons for ineffective project control Effective control is critical for the realization of project objective. Yet, control of projects in practice tends to be ineffective. Why? There seems to be three reasons for poor control of projects.
Page 5 of 13

Characteristics of the project- Most of the projects are large ,complex undertaking involving many origination and people .this renders the task of control because: Keeping track of physical performance and expenditure on hundreds or thousands of activities which are often non -routine is a stupendous task. Coordination and communication problem multiply when several org. are involved in the project. People problems To control a non routine project, a manager requires an ability to monitor a wide range of desperate factors, a sensitivity to symptoms indicative of potential of problems, and a faculty for comprehending the combined effect of multiple forces .naturally, most of the operational managers, used to the steady rhythm of normal operations and routine work lack the experience, training, competence, and inclination to control projects. Poor control and information system One of the factors which inhibit effective control is the poor quality of control and information system. Some of the weaknesses observed in the control and the information system are: Delay in reporting performance Often there is delay in the reporting of performance .This prevents effective monitoring of the project and initiation of timely action to check adverse developments Inappropriate level of detail Generally cost information for control is collected in terms of cost codes found in the companys cost accounting system ,irrespective of the level of details employed for project planning and budgeting .consider an extreme example wherein cost and value of work done are reported for the project as a whole. What is the value of such information for identifying where slippages are occurring and who is responsible for them?
Page 6 of 13

Unreliable information One of the major problems in project control is unreliable and inaccurate data and information. Often project managers receive reports which suggest that everything is okay when the reality is otherwise. Further, for months after the project is completed, cost dribble in to change a favorable variance into an unfavorable one or to aggravate an unfavorable variance.
5