Download Chapter 3: Organization: Structure and Culture

Chapter 3: Organization: Structure and Culture 4KF3
Lecture Notes
Organization Structure Key Elements***
1. Work specialization
2. Departmentalization
3. Chain of command
4. Span of control
5. Centralization/decentralization
6. Formalization
Functional Organization
Pure Project Organization
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Chapter 3: Organization: Structure and Culture 4KF3
Matrix Organizations
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Weak matrix is closer to functional organization because departmental Manager
has more control
Strong matrix closer to pure project organization because Project Manager has
more control
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Chapter 3: Organization: Structure and Culture 4KF3
Organizational Culture
Ex. if there is strong team emphasis, you would have more inclination to use a pure project
organizational structure
Identifying Cultural Characteristics
 Study physical characteristics of organization.
 Read about the organization.
 Observe how people interact with the organization.
 Interpret stories and folklore about the organization.
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Chapter 3: Organization: Structure and Culture 4KF3
Right Management Project Structure Considerations
How to Choose Organizational Form
 Define project outcomes
 Determine key tasks and functional expertise locations
 Arrange key tasks by sequence and decompose into work packages
 Determine which organizational units need to work on work packages
 List any special characteristics or assumptions
 Considering the above, choose a structure
Project Management Offices
PMO Models
 Weather Station
o Source of information for everyone in the company to use as a reference
o Gives advice to other employees
 Control Tower
o Everything is run from the PMO
 Resource Pool
o When a project needs to be done, they will send in help
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Chapter 3: Organization: Structure and Culture 4KF3
Reading Notes
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Three types of project management structures: functional organization, dedicated project
teams, matrix structure
 Organizational culture: reflects the personality of a an organization
Project Management Structures
 System provides a framework for launching and implementing project activities within a
parent organization
o Balances the needs of both the parent organization and the project by defining
the interface in terms of authority, allocation of resources, and eventual
integration of project outcomes into mainstream opportunities
 Efficiency is achieved by breaking down complex tasks into simplified, repetitive
responses
Organizing Projects within the Functional Organization
 Different segments of a project are delegated to the respective functional units
 Coordination is maintained through normal management channels
 Commonly used when one functional area plays a dominant role in completing the
project
o A high ranking manager in that area is given the responsibility of coordinating the
project
 Major advantages of this structure
o No change to the existing organizational structure
o Flexibility for staff (can be switched on and off fairly easily)
o In-depth expertise
o Early post-project transition – normal career paths are maintained
 Disadvantages of this structure (worse when the scope is broad and no one function
takes over)
o Lack of focus because everyone has their own core routine work to complete
o Poor integration
o Slow – harder to communicate efficiently
o Lack of ownership – because they only work on a segment, they do not identify
Organizing Projects as Dedicated Teams
 Teams operates as separate units from the rest of the parent organization
 Full-time project manager is designated to bring together full-time specialists
 Interface between parent organization and project teams will vary
 Projectized organization: when an organization consists of quasi-project teams and
functional departments assist those teams
 Major advantages of this structure:
o Simple – functional teams can operate independently as before
o Fast – participants are on projects full-time, decisions not deferred for approval
o Cohesive – common goal is motivating
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Chapter 3: Organization: Structure and Culture 4KF3
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o Cross-Functional Integration – commitment to optimizing the project
Disadvantages of this structure (more so when the parent’s needs are taken into
account)
o Expensive – duplication of efforts and a loss of economies of scale
o Internal Strife – we-they divisiveness
o Limited technological expertise – can stop members from looking outside
o Difficult post-project transition – when the project is over, what to do with
members
Organizing Projects with a Matrix Arrangement
 Matrix management is a hybrid organizational form in which a horizontal project
management structure is overlaid on the normal functional hierarchy
 Two chains of command: one across functional lines and one across project lines
 Could be temporary or permanent
 Each project has an administrative assistant
 Designed to optimally utilize resources by having individuals work on multiple projects as
well as being capable of performing normal functional duties
 Dual focus between functional/technical expertise and project requirements
 Different matrix forms:
o Weak matrix: similar to a functional approach with the exception that there is a
formally designated project manager responsible for coordinating project
activities. Project manager has indirect authority, functional managers still call the
shots
o Balanced matrix: project manager defines what needs to be accomplished while
functional managers are concerned with how it will be accomplished. Must work
closely together.
o Strong matrix: project manager controls most aspects of the project while the
functional manager has title over her people and is consulted on need basis.
 Major advantages of this structure:
o Efficient – resources can be scared across projects and divisions
o Strong project focus – formally designated project manager helps sustain a
holistic approach to problem solving
o Earlier post-project transition – homeport is specified upon dissolution of team
o Flexible – with resources and people
 Disadvantages of this structure (more complicated)
o Dysfunctional conflict – predicated on tension between functional managers and
project managers who bring expertise. Tension is critical but it can become
personal.
o Infighting – when there is sharing of resources
o Stressful – violates the management principle of unity of demand (more than one
boss)
o Slow – can get bogged down in disagreements, especially in the balanced matrix
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Chapter 3: Organization: Structure and Culture 4KF3
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The strong matrix is likely to enhance project integration, diminish internal power
struggles, and ultimately improve control of project activities. But technical quality might
suffer and there may be projectitus.
The weak matrix is likely to improve technical quality as well as provide a better system
for managing conflict across projects; however, there may be poor project integration
The balanced matrix can achieve better balance between technical and project
requirements, but it is a very delicate system to manage and is more likely to experience
problems
What is the Right Project Management Structure?
 Organization Considerations
o How important is project management to the success of the firm? (less important,
less formalized)
o Resource availability – can people allocated and by how much
o Assess current practices and what changes are needed
o May be resistance to a move towards project management from functional
divisions
 Project Considerations:
o Size of project
o Strategic importance
o Novelty and need for innovation
o Need for integration (number of departments involved)
o Environmental complexity
o Budget and time constraints
o Stability of resource requirements
 The higher the level of these seven factors, the more autonomy and
authority the project manager and team need to be successful
 More and more companies using the mix and match approach to managing projects
Organizational Culture
Organizational Culture: refers to a system of shared norms, beliefs, values, and assumptions
which binds people together, thereby creating shared meanings
 Manifested by customs and habits that exemplify values and beliefs
 Culture is one of the defining aspects of an organization
 10 primary characteristics that capture the essence of organizational culture:
1) Member Identity – identification with the company as a whole (not just job)
2) Team Emphasis – activities centered around groups and not individuals
3) Management Focus – management decisions considering outcome
4) Unit Integration – units participating in coordinated or interdependent manner
5) Control – rules, policies and direct supervision
6) Risk Tolerance – the degree to which employees are encouraged to be risktaking
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Chapter 3: Organization: Structure and Culture 4KF3
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7) Reward Criteria – favouritism vs. merit
8) Conflict Tolerance – the degree to which conflicts are aired openly
9) Means Vs. End Orientation - management focusing on outcomes or the
processes to get there
10) Open-Systems Focus – monitoring changes in the environment
Organizations culture provide a sense of identity for its members
o More stated = more identification
Organizational culture helps legitimize the management system of the organization
o Helps clarify authority relationships
Organizational culture clarifies and reinforces standards of behaviour
o What is appropriate/ inappropriate
Organizational culture helps create social order within an organization
Strong/thick culture means the culture pervades across the organization vs. weak/thin
culture means it is not widely shared
Countercultures can sometimes emerge
Identifying Cultural Characteristics (How to Study Organizational Culture)
1) Study the physical characteristics of an organization – who has power, how is the
organization differentiated, how formal
2) Read about the organization – emphasis on people or bottom line
3) Observe how people interact within the organization – pace, meeting styles,
conversations about issues
4) Interpret stories and folklore surrounding the organization – similar stories, how do
people see advancement
Implications of Organizational Culture for Organizing Projects
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Project managers have to interact with :
o organizational culture of parent and various departments
o project’s client or customer
o other organizations connected to a project
in many case, the ideal culture is not at either extreme
key issue is the degree of interdependency between the parent organization and the
project team – weaker ties = more flexibility
in a dominant culture, the best strategy is to insulate the project team and have it be selfsufficient
project culture could represent its own counterculture in extreme cases
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