Principles of PM

BUS2040M
Project Organisations

Presented by
Herbert Mapfaira
Lincoln International Business School
Reading:
Chapters 1
Discussion Questions – Sydney Opera House
 Is the project a success or a failure?

 What is the most important aspect in such

projects: building’s design, actual construction,
operations, legacy, wider benefits?

 What would you recommend for similar projects

in the future?
Discussion Questions – Sydney Opera House
 Is the project a success or a failure?
 Failure in terms of project management process
 Success in terms of product / deliverable
 What is the most important aspect in such
projects: building’s design, actual construction,
operations, legacy, wider benefits?
 Design?; construction?; legacy/wider benefits?
 What would you recommend for similar projects
in the future?
 Detailed plans / project requirements definition
(business requirements, technical requirements)
Project Organisations

 Ideally created to best suit the project

 A project team is a temporary structure
 Usually multi-functional/multi-organisational
 Led by project manager or project coordinator
Project Organisations

 Why should projects be managed in a

different way compared to other
organizational activities?
Project Organisations: Basic Variations

 Traditional pyramid organisation (hierarchical)

 Task force within traditional pyramid
 Pure project (project arm and stand alone)
 Matrix
 Traditional Pyramid Organisations: Silos
Sr. Mgt

Engr Mktg Fin HR PD Mfg

Reason for silos: A manager is responsible only for one part

of the organisation’s goal
Traditional Pyramid Organisation

 Specialisation necessitates differentiation

 Different bases of differentiation:
Subject matter, Products, Geographic etc.

 Problem with differentiation/specialisation:

 Lack of integration

 Losing sight of the bigger picture

Project within a Traditional
Organisation:
Single Function Project
Sr. Mgt

Engr Mktg Fin HR PD Mfg

PM
PT

PM = Project manager, team leader or coordinator

PT = Project team
Project within a Traditional Organisation

 Pros

 Functional units develop competencies

 Good for single-function projects

Project within a Traditional Organisation
 Con
 Poor for cross-functional efforts

 No coordination among functional

areas
 Functional areas tend to be self-

serving
 No project accountability
Project within a Traditional
Organisation:
Multifunctional Task Force/Ad Hoc
Sr. Mgt PM
Committee PT

Engr Mktg Fin HR PD Mfg

PM = Project leader, expeditor or coordinator

Multifunctional Task Force (cont’d)

 Pros
 Project expeditor or coordinator

oversees project work, schedules

meetings, etc.

 Expertise drawn from all areas

contributing to or affected by the project
Multifunctional Task Force (cont’d)

 Cons

 Authority of project leader is

weak/ineffectual

 Project is side-job for team members

Pure Project—Stand-Alone

PM

Engr Mktg Fin HR PD Mfg

The project IS the organisation

Pure Project—Stand-Alone

Chief Executive

Project 1 Project 2 Project 3 Project 4

Marketing Marketing Marketing Marketing

Finances Finances Finances Finances
Design Design Design Design
Construction Construction Construction Construction
Pure Project – Staff Functions
Centralised Chief Executive
Human Resources Administration

Finances Legal services

Project 1 Project 2 Project 3 Project 4

Design Design Design Design

Construction Construction Construction Construction
Procurement Procurement Procurement Procurement
Pure Project—Stand-Alone: Boston’s Big
Dig
Central Artery/Tunnel Project
 Cost estimate (1989): $2.5bln – to be
completed in 1998
 Completion in 2007, $22bln

https://www.youtube.com/watch?v=0f95n9otA0g
 Pure Project—Stand-Alone
Boston’s Big Dig

Bechtel, Parson-Brinkerhoff
Joint Venture Prime
Architectural contractor
subcontractor
Manage and
Manage
Wallace, Floyd do
prelim. design

Final design Construction

Final design Construction
Subcontractors
Subcontractors
Organisational structure of the enabling works, main works civils, and  main
works stations delivered by Integrated Project Teams (IPTs) and Joint
Venture (JV) organisations with HS2 Ltd as the client organisation.
HS2 Delivery Partners (Stand Alone
Project Organisation)
Enabling Works
  HS2 Contracts
Contractors
Costain Group PLC;
CSjv Skanska Construction Area South
UK
Morgan Sindall
Construction &
Fusion JV               Infrastructure Ltd, BAM Area Central
Nuttall Limited, Ferrovial
Agroman (UK) Limited
Laing O’Rourke
LMJV Construction Limited, J Area North
Murphy & Sons Limited
Project or Programme Management?
 Key differences between programmes and projects:

 Programme extends over a longer time horizon

 It consists of several parallel or sequential work efforts or
projects coordinated to meet a programme goal
 Projects within a programme share a common goal and
resources, and often are interdependent

 Other similar organisational forms:

 Product Management
 New Venture Management
Pure Project—Projects as “Arms” to
Parent Organisation
Sr. Mgt

Engr Mktg Fin HR PD Mfgr

BETA SPECTOR
PM PM

Customer Procurement Design

Service Design

Engineering Research Engineering Research

Pure Project & Pure Project “Arms”

 Suitable when

 Project has high strategic importance

 Project is large

 Project has long duration

Pure Project & Pure Project “Arms”

 Pros
 Project manager has high authority

 Work of team is entirely devoted to the

project
 Necessary resources are procured

 Motivation, focus and team spirit

Pure Project & Pure Project “Arms” (cont’d)
 Cons
 Costly duplication of effort in multi-project organisations

 Lack of inter-project knowledge sharing

 Personnel gain experience of one project only

 Development of competencies neglected

 Hiring/layoff cycle: low morale, high expense

Sr. Mgt

Engr Mktg Fin HR PD Mfgr

BETA SPECTOR
PM PM
Customer Procurement Design
Service Design
Engineering Research Engineering Research
The Problem of Integration
 In the traditional organisation: lack of
integration between functions

 In projectised structures: lack of integration

between projects

 The focus should be:

The mission of the entire organisation!
Ways to Achieve Integration

Alternatives:
 The CEO integrates
 Informal structures
 Individuals with integrative role
 Task forces & permanent committees
Ways to Achieve Integration: The
Matrix
Both functional and projectised structures have
specific advantages (and disadvantages)

Superimposed matrix structures for

simultaneous focus:

Differentiation/specialisation (Functions)
AND
Projects
Matrix
Sr. Mgt

Engr Mktg Fin HR Mfg

BETA
PM

SPECTOR
PM
Matrix
Sr. Mgt

Engr Mktg Fin HR Mfg

BETA
PM Beta team

SPECTOR
PM Spector team
A Weak Matrix Structure
A Balanced Matrix Structure
Chief Executive

Other
functions

Engineering Marketing Finance Construction

Project
Manager
Project
Manager
A Strong Matrix Structure
Chief Executive
Other
functions

Manager of
Marketing Engineering Construction
Project
Managers

Project 1

Project 2

Project 3

H Steyn (Ed) Project Management – a Multidisciplinary Approach

 Matrix, Pros
 Emphasis on the bigger picture
 Focus on functional specialisation as well as on
projects
 Synergies within each function are exploited
 Synergies between projects are exploited
 Often used in complex, interdependent & changing
situations
 Enriched information processing
Matrix, Pros (cont’d)

 Functional areas serve as resource

repository
 Each project has dedicated PM
 Necessary resources are procured/made
available
Sr. Mgt

Engr Mktg Fin HR Mfgr

BETA
PM

SPECTOR
PM
Matrix, Pros (cont’d)
 Personnel have a functional “home”—a
“place to go”;
 inter-project knowledge sharing
 people may work on multiple projects

Sr. Mgt

Engr Mktg Fin HR Mfgr

BETA
PM

SPECTOR
PM
Matrix, Cons
Power struggles
(between functional and project structures)
Sr. Mgt

Engr Mktg Fin HR Mfgr

BETA
PM

SPECTOR
PM

Conflicts about resources:

 between PM and functional managers

 between managers of different projects

 Matrix, Cons (cont’d)
 The multi-boss situation
 Unclear responsibilities and accountabilities
 Requires new roles and new ways of
thinking
 Implementing is problematic & often involves
resistance to change
Matrix – more than a structure

A focus on processes & systems

(Davis & Lawrence)

Systems to support a matrix

Matrix – more than a structure –
Culture & Behaviour

“All the world’s a stage,

And all the men and women
merely players”
William Shakespeare

It’s about roles!

Roles and Power in a Matrix
Positional power (legitimate power) can give
rewards and can coerce
Personal power:
 Expert power (knowledge, judgment,
experience)
 Referent power (Creates more positive, trusting

relationships)
 Rational persuasion (present a logical, well-reasoned
explanation to influence team members)

Team power
 Culture & Behaviour in a Matrix
 More collaborative / team effort
 Focus on common goals / corporate strategy
 More negotiation
 More communication – lateral, vertical and joint
 Communication sometimes less formal
 Less emphasis on a bureaucratic (paternalistic)
hierarchy
 More reliant on interpersonal relations
Summary
 The “perfect” structure does not exist

 Not all structures equally good

 Any structure can be made to work

 And it is about more than just structure…