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Project Management. Project Organization Jiwei Ma. Content. Introduction Organization theory Basic organization types Project organization and project Project team building. Introduction. Project organization is the foundation of project management

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Project management

Project Management

Project Organization

Jiwei Ma


Content
Content

  • Introduction

  • Organization theory

  • Basic organization types

  • Project organization and project

  • Project team building


Introduction
Introduction

  • Project organization is the foundation of project management

  • Project objective is decisive to project organization

  • Project organization is designed mainly to carry out project controlling


Project objective and project organization

Objective

Production methods and tools

Production personnel

Management methods and tools

Management personnel

Project Objective and Project Organization

Methods & Tools

People

Organization


Organization model
Organization Model

Environment

Social

structure

Physical

Structure

ORG

Culture

Technology


Organization theory
Organization Theory

  • Organization theory studies,

    • The structural components of a system

      • Organization structure

      • Task breakdown and responsibility definition

      • Management functionalities arrangement

    • The mechanism and procedure of a system

      • The mechanism of material flow

      • The mechanism of information flow


Development of organization theory
Development of Organization Theory

  • Adam Smith

    • efficiency on division of labor  social structure of organization

  • Karl Marx

    • Relationships between the organization and individuals, fundamental antagonism between labor and the interests of capital

  • Emile Durkheim

    • increasing specialization, hierarchy, interdependence of work tasks

    • formal and informal aspects of organization  tension between economic and human aspects


Development of organization theory1
Development of Organization Theory

  • Max Weber

    • bureaucracy is objective and impersonal  benefits of rationality (formal authority)

    • types of social action: formal rationality, substantive rationality, affectional, traditional

    • three types of legitimate ’Herrschaft’: rational, traditional, charismatic

  • Fredrick Winslow Taylor

    • Scientific Management: method to discover the most efficient working techniques for manual forms of labor

    • close supervision of highly specified physical work

    • managerial control


Development of organization theory2
Development of Organization Theory

  • Henry Fayol

    • universal principles for the rational administration of organizational activities

    • principles: span-of-control, exceptions, departmentation, unity-of-command, hierarchy

    • esprit de corps: unity of sentiment and harmony contribute to the functioning of an organization

    • functions of manager: planning, organizing, command, coordination, control


Classical organization theory
Classical Organization Theory

  • The classical organization theory is focused on the mechanism of power, authority, and control

  • Three types of organizations

    • Charismatic authority

      • Based on the sacred or outstanding characteristic of the individual

    • Traditional authority

      • Essentially a respect for custom

    • Rational legal authority

      • Based on code or set of rules

  • The last one was regarded as the predominant form of organization


Classical organization theory1
Classical Organization Theory

  • Bureaucracy is the most efficient form of organization

    • A legal code shall be established for all members to obey

    • The code form a system of abstract rules, and administration looks after the interest of the organization within the limit of this system

    • The person exercising authority also obeys this impersonal order

    • Only through being a member does the member obey the law

    • Obedience is due not to the person who holds the authority but to the impersonal order which has granted him this position


Classical organization theory2
Classical Organization Theory

  • The theory is based on the assumption of formal and total rationality

  • Isolated from the environment

  • The primary concern of the theory is

    • the behaving mechanism to avoid corruption, unfairness, and nepotism within the organization

    • instead of the slow, rigid and inefficient bureaucracy


Organization theory modified
Organization Theory - Modified

  • The modified organization theory has less idealistic assumption and established organization control principles with more practical realism

  • Principles

    • Division of work - Repetition of the same function brings speed and accuracy. Thus work should be divided according to skill and technical expertise

    • Authority and responsibility - Authority is linked to responsibility, and together require increasing judgment and morality at senior levels


Organization theory modified1
Organization Theory - Modified

  • Principles

    • Discipline – essential for the smooth running of an organization

    • Unity of command – an employee should receive orders from one superior only

    • Unity of direction – One and one plan for a group having the same objective

    • Remuneration of personnel

      • Assure fairness

      • Encourage keenness by rewarding well-directed effort

      • Avoid over-payment beyond reasonable limits


Organization theory modified2
Organization Theory - Modified

  • Principles

    • Equity – employees must be treated equally and fairly

    • Stability of tenure of personnel – a period of stability will help employees to delivery their best

    • Esprit de corps – dividing one’s own team is a grave sin against the business

  • Provide a key to modern organization and possible approach to current organizational solutions

  • Unable to explain many modern practices contradictory to the principles due to the limits


Organization structure

Hierarchical organization

Functional organization

Project organization

Matrix organization

……

Organization Structure


Hierarchical organization

B1

B2

B3

. . .

. . .

C21

C22

C23

. . .

. . .

Hierarchical Organization

A


Example army

Brigade

Brigade

Brigade

……

……

Regiment

Regiment

Regiment

Regiment

Regiment

……

……

Battalion

Battalion

Battalion

Battalion

Battalion

Battalion

Battalion

Battalion

Battalion

Company

Company

Company

Example: Army

Division


Functional organization

B1

B2

B3

. . .

C5

C6

. . .

Functional Organization

A


General Manager

R&D

Production

Sales/Marketing

Accounting

Human Resource

Example:Typical Functional Organization in Manufacturing Industry


Example: Modified Functional Organization

HR VP

Accounting VP

Marketing VP

EngineeringVP

Production VP

SupplyVP

Purchasing Mng

Inspection Mng

System Eng. Mng

ElectronicEng. Mng

Software Eng. Mng

Mechanical Eng. Mng

Technical Booking Mng

Customer Service Mng

Domestic SalesMng

I/E Mng

Manufacturing Mng

Assembly Mng

Testing/Inspct. Mng

ProductionPlanning Mng

TransportationMng

President


Functional organization1
Functional Organization

  • Advantages

    • Emphasis of specialization and opportunities for employees to obtain professional training and advances

    • Promotion opportunity for professionals

    • Professionals can work for different project at same time

    • Functional department can be the basis of technical continuity and sustainability

    • Stability of tenure of professionals


Functional organization2
Functional Organization

  • Disadvantages

    • Instead of customers, functional activities become the focus of departments

    • It’s difficult to find a fully responsible person for a problem or fault

    • Slow and hindered reaction to customer’s requirement due to multi-layer and multi-branch management structure

    • Negligence of the needs of project and individuals working on project

    • Difficult for cross-department coordination due to communication and information exchange barriers, which is critical to the complex project


Project Manager

R&D

Production

Marketing

Accounting

Human Resource

AProject Manager

BProject Manager

R&D

Production

Sales

Accounting

HR

R&D

Production

Sales

Accounting

HR

Example: Project Organization

General Manager


Example: Project Organization

Marketing VP

Human Resource VP

Accounting VP

Legal Department VP

A Project Manager

B Project Manager

Engineering Manager

Manufacturing Manager

Supply Manager

Consultant

Engineering Manager

Manufacturing Manager

Supply Manager

Subcontractor

AjaxExpress Company President


Project organization
Project Organization

  • Advantages

    • Project manager is fully responsible for the project and directly report to senior management level

    • Members of project team report to project manager

    • Separation of project from functional department makes communication simple and easy

    • Unity of direction enables project teams to concentrate on project objective

    • Centralization of management expedites the decision making process and enable an fast reaction

    • Unity of command


Project organization1
Project Organization

  • Disadvantages

    • Duplication of resource input when there are more than one project

    • Waste of critical resources due to project manager’s preparatory inventory

    • Inconsistency in company’s regulatory management

    • Difficulty for communication and information exchange

    • Lack of stability of tenure and continuity of professional career for employees


Matrix organization

X1

X2

X3

Y1

Y2

Y3

Matrix Organization

A


R&D

Project Mng.

AProj. Mng

BProj. Mng

CProj. Mng

Example: Matrix Organization

General Manager

Production

Marketing

Accounting

HR


Example: Matrix Organization

Marketing VP

HR VP

Accounting VP

Legal Dept. VP

Project VP

Engineering VP

Manufacturing VP

Logistics VP

Assembly

Inspection

& Testing

Production

Installation

Training

PM

System

Electronic

Software

Mechanical

Technical

Booking

A Project

Manager

Jack

Jim

Julie

Cathy

Rose

Dennis

Chris

Sharon

Tyler

B Project

Manager

Beth

Jeff

Maggie

Jen

Paul

Steve

Jessi

Chris

Katie

Gerri

Wendy

C Project

Manager

Jack

Joe

Cattry

Rose

Katie

Hanna

AjaxExpress Company President


Multi level matrix organization

A

X Y

X1

X2

X3

YX YY

Y1

Y1X1

Y1X2

Y!Y1

Y!Y2

Y2

Y2X1

Y2X2

Y2Y1

Y2Y2

Y3

Multi-level Matrix Organization

A


Matrix organization1
Matrix Organization

  • Advantages

    • Most of works center around project

    • Different projects can share the expertise of various functional departments

    • Project team member has a strong connection to project, while still maintains a sense of belonging

    • Fast reaction to both internal and external requirement

    • Part of project team members are from administrative department, it helps to maintain the consistency in regulatory management

    • Easy to maintain the balance of resource input among different project


Matrix organization2
Matrix Organization

  • Disadvantages

    • Lack of the unity of command

    • Project manager will concentrate on project objective, instead of company’s objective

    • It’s difficult to allocate resources and easy to invoke dispute between project managers

    • High demand on the coordination between project manager and functional department manager



Project organization case
Project Organization Case

  • An office building is fully invested by public fund and will be used by a governmental institute.

  • This institute does not have construction specialist or a team to manage the project, so it’s decided to hire a consulting company to manage the project under an owner’s representative.

  • The owner’s representative, reporting to the director of this governmental institute, will be fully responsible for all of the project issues.

  • Any decision regarding major functionality and project implementation of this office building will be made by top management level of this institute, and than carried out by the owner’s representative.

  • It is also required by law to hire a certified consulting company to deal with project procurement, and a site supervising company to monitor the construction procedure.


Project organization case1
Project Organization Case

  • A state owned company decided to expand its production capacity by building a new facility.

  • This company has a maintenance team with mechanical, electrical, and production equipment engineers.

  • The top management level assigned an owner’s representative to be responsible for all the project issues, who will directly report to the president of the company.

  • A decision-making committee has been established to monitor the project and support the president regarding critical decision making procedure.

  • The company decided to hire a consulting company to provide project management consulting service to the owner’s representative and owner’s project engineers.

  • It is also required by law to hire a certified consulting company to deal with project procurement, and a site supervising company to monitor the construction procedure.


Project organization case2
Project Organization Case

  • A foreign invested joint-venture is going to build an industrial facility in China.

  • This company has a maintenance team with mechanical, electrical, and production equipment engineers.

  • The company has set up a project engineering department to deal with project engineering issues.

  • The director of the project engineering department will be reporting to the chief operating officer of the company.

  • Other functional departments of the company such as purchasing, accounting, etc. will also be involved in certain project issues.

  • A consulting team has been hired as a part of the project engineering department to deal with project management issues as well as certain technical issues during design and construction procedure.

  • A site supervising company has also been hired to monitor the construction procedure.


Team building
Team Building

  • Basic Concept

  • Types of Team

  • Rules of a Team

  • Steps to Build a Team

  • Team Effectiveness


Team building1
Team Building

  • Basic Concept

    • A team is a group of people working towards a common goal

    • Every team member has his/her own goals in a hierarchy system that conform to the common goal

    • A team may be a formal organization or an informal workgroup

    • Team building is the process of enabling that group of people to reach their goal


Types of team in size
Types of Team – in Size


Types of team in size1
Types of Team – in Size


Team building2
Team Building

  • Rules of a Team

    • Purpose: Members share the vision and the sense of the mission

    • Priorities: Members know what needs to done next, by whom, and by when

    • Roles: Every member know his own role

    • Decisions: Authority and decision making lines are clearly understood

    • Conflict: Conflict is dealt openly and is considered important issues

    • Personal traits: members feel their unique personalities are appreciated and well utilized.


Team building3
Team Building

  • Rules of a Team

    • Norms: Group norms for working together are well established and observed.

    • Effectiveness: Members find team meetings efficient and productive.

    • Success: Members share the clear view of the team’s success and the sense of accomplishment.

    • Training: Opportunities for updating skills are provided and taken advantage of by team members.


Team building4
Team Building

  • Steps to Build a Team

    • Forming

    • Storming

    • Norming

    • Performing

    • Adjourning


Steps to build a team
Steps to Build a Team

  • Forming

    • Personal relations are characterized by dependence

    • Members have a desire for acceptance by the group

    • Members behave to keep things simple and to avoid controversy

    • Serious topics and feelings are avoided

    • Discussion centers around orientation to tasks and one another

    • To advance to next step, members have to risk discussions beyond non-threatening topics with possible conflict


Steps to build a team1
Steps to Build a Team

  • Storming

    • Characterized by competition, conflict in personal relations and organization of tasks/functions

    • Conflicts arise when members are organized for tasks and structured for function

    • Individuals have to bend to suit the group organization

    • There will be questions over leadership, structure, power, and authority

    • To advance to the next step, members have to move from a “testing and proving” mentality to a problem-solving mentality


Steps to build a team2
Steps to Build a Team

  • Norming

    • Characterized by cohesion and recognition

    • Members are willing to change and mold their feelings, ideas, attitudes, and beliefs

    • Leadership is shared and cliques dissolve with more and more sense of group belonging

    • Data flow between group members increases and creativity is high

    • Interactions between members are characterized by openness and sharing of information


Steps to build a team3
Steps to Build a Team

  • Performing

    • Not reached by all groups

    • Characterized by interdependence in personal relations and efficiency of problem solving

    • Members can work independently, in subgroups, or as a total unit with equal performance

    • Roles and authorities can dynamically adjust to the changing needs of the group and individuals

    • Members are both highly task and people oriented

    • Group morale is high and group loyalty is intense


Steps to build a team4
Steps to Build a Team

  • Adjourning

    • Characterized by termination of task behavior and disengagement from relationships

    • There will be a recognition for participation and achievement

    • There might be a sense of fear due to the feeling of giving up control and inclusion in the group


Team building5
Team Building

  • Team Effectiveness

    • Team goals are development through team interaction and by members’ willingness

    • Participation of team members is high

    • Feedback is asked openly and given freely with a desire to help

    • Decision making is participated actively by all members

    • Leadership is distributed and shared among team members


Team building6
Team Building

  • Team Effectiveness

    • Problem solving becomes the focal point of team work

    • Conflict is not suppressed, but openly dealt and managed among team members in order to improve team performance

    • Team member resources (talents, skills, knowledge, and experiences) are fully identified, recognized, and utilized whenever appropriate.

    • Risk taking and creativity are encouraged, while mistakes are treated as a source of learning rather than reasons for punishment


Team building7
Team Building

  • Team Leader

    • To put forward exciting vision with team members and keep it in front of the team

    • To help the team develop principles, including norms, success criteria, performance quality standards, and reward system

    • To facilitate communication and information exchange within the team

    • To tolerate failure

    • To accept group decision even with personal disagreement when needed

    • To act as interface and buffer between team and rest of the world


Team building8
Team Building

  • Team Member

    • To take responsibility

    • To be positive in determining team principles

    • To have a positive attitude toward any changes

    • To accomplish tasks with a strong feeling of control

    • To make kind and constructive criticism

    • Don’t have to be a good friend, but need to be a good teammate


Thank you

Thank You

Jiwei Ma

[email protected]


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