Another means of reducing conflicts and minimizing the need for communication was

detailed planning. Functional representation would be present at all planning,

scheduling,
and budget meetings. This method worked best for nonrepetitive tasks and projects.
In the traditional organization, one of the most important responsibilities of
upper-
level management was the resolution of conflicts through �hierarchical referral.�
The con-
tinuous conflicts and struggle for power between the functional units consistently
required
that upper-level personnel resolve those problems resulting from situations that
were either
nonroutine or unpredictable and for which no policies or procedures existed.
The fourth method is direct contact and interactions by the functional managers.
The
rules and procedures, as well as the planning process method, were designed to
minimize
ongoing communications between functional groups. The quantity of conflicts that
execu-
tives had to resolve forced key personnel to spend a great percentage of their time
as arbi-
trators, rather than as managers. To alleviate problems of hierarchical referral,
upper-level
management requested that all conflicts be resolved at the lowest possible levels.
This
required that functional managers meet face-to-face to resolve conflicts.
In many organizations, these new methods proved ineffective, primarily because
there
still existed a need for a focal point for the project to ensure that all
activities would be
properly integrated.
When the need for project managers was acknowledged, the next logical question was
where in the organization to place them. Executives preferred to keep project
managers
low in the organization. After all, if they reported to someone high up, they would
have to
be paid more and would pose a continuous threat to management.
The first attempt to resolve this problem was to develop project leaders or
coordina-
tors within each functional department, as shown in Figure 3�2. Section-level
personnel
were temporarily assigned as project leaders and would return to their former
positions at
project termination. This is why the term �project leader� is used rather than
�project man-
ager,� as the word �manager� implies a permanent relationship. This arrangement
proved
effective for coordinating and integrating work within one department, provided
that the
correct project leader was selected. Some employees considered this position an
increase
in power and status, and conflicts occurred about whether assignments should be
based on
experience, seniority, or capability. Furthermore, the project leaders had almost
no author-
ity, and section-level managers refused to take directions from them, fearing that
the
project leaders might be next in line for the department manager�s position.
When the activities required efforts that crossed more than one functional
boundary, con-
flicts arose. The project leader in one department did not have the authority to
coordinate activ-
ities in any other department. Furthermore, the creation of this new position
caused internal
conflicts within each department. As a result, many employees refused to become
dedicated to
project management and were anxious to return to their �secure� jobs. Quite often,
especially
when cross-functional integration was required, the division manager was forced to
act as the
project manager. If the employee enjoyed the assignment of project leader, he would
try to
�stretch out� the project as long as possible.
Even though we have criticized this organizational form, it does not mean that it
can-
not work. Any organizational form will work if the employees want it to work. As an
example, a computer manufacturer has a midwestern division with three departments,
as
in Figure 3�2, and approximately fourteen people per department. When a project
comes

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