Chapter 5

Project Organization
• Project organization:
Project organization is a concept that defines the structure of
the organization. A well-organized project ensures that
everyone knows what’s expected of them, what their
authority is, and what they need to do.
 Areas of responsibility in the project organization.

• Project leadership – It is associated with the management

side of the project.

• Project team – The project team is assigned with the

implementation aspect of the project

• Project board – It is the decision-making body who makes

important decisions like whether a project should be canceled
or continued.
 Factors to be considered in project organization
1. Designing the job:
Job design is the process of establishing employees' roles and
responsibilities and the systems and procedures that they should
use or follow. The main purpose of job design, or redesign, is to
maximize performance.

2. Grouping the job:

The process of grouping jobs is called departmentalization.
Departmentalization is a method of dividing an organization
into different departments, which perform certain tasks in
accordance with the department's specialization.
3. Chain of command:
It refers to a company's hierarchy of reporting relationships. A
chain of command is an organizational structure that documents
how each member of a company reports to one another.

4. Decision-making approach:
Decision-making can also be classified into three categories
based on the level at which they occur.
• Strategic decisions are those decisions that have an influence
over years, and even beyond the lifetime of the project.
• Tactical decisions are decisions about how things will get
done.
• Finally, operational decisions are decisions that employees
make each day to run the organization.
5. Span of control:
The span of control in project management suggests the
optimum number of subordinates managed by a single
supervisor. It depicts the organization’s size and workgroups.
 Types of project organization
1. Functional organization
This is one of the most common organizational structures. The
company is divided into several departments and individuals
with similar skills. The project manager and the other resources
work in the same division, for instance, marketing, sales,
accounting, etc.
The advantages of a functional structure are as follows-
• It is the best for small projects as well as small teams because
the function can gain full control and authority over team
members and other resources
• It is easy to motivate members as they are small in number
• It is easy to gain access to experts as they are in the same
functional area
• It is easy to gather everyone related to a project and have a
discussion about a relevant issue
The disadvantages of a functional structure are as follows:

• Project manager has little to no formal authority.

• Multiple projects compete for limited resources and priority
• Projects team members will likely remain loyal to their
functional manager.
2. Project-based organization
Here the project manager has full responsibility for every project.
He has a full-time role with a whole team and budget control for
its successful completion. He reports to the project board.
The advantages of a project-based organization structure are
as follows-

• Full control over the team

• It has a clear line of authority
• Strong communication with a single reporting system
• Flexibility in the trade-off, and fast decision making
The disadvantages of a project-based organization structure are
as follows-
• Authority and power can make the project manager arrogant
• The work environment can be stressful because there is always a
deadline
• If the projects get longer, the cost of employees and equipment can
go higher
3. Matrix project organization
A matrix project organization structure is created by integrating both
project-based and functional organizations. There are two structures
horizontal and vertical and hence an employee can work on a project
as well as in a functional group.
The matrix organization is of three types
• Strong matrix – The project manager has a full-time team and has
full authority and control over the team and the project
• Weak matrix – This is closer to a functional structure, and the
project manager has less power. He has a part-time team and
budget control
• Balanced matrix – The project manager has medium authority
and a part-time team.
The advantages of matrix organization are as follows-
• Resources are used in an effective manner
• Resources can be moved easily between various projects
• Individuals, as well as the team members, are responsive by nature
• More support from functional areas

The disadvantages of matrix organization are as follows-

• Requires extra administration
• Require more than one boss for projects teams
• More complex to monitor and control
 How to make a project organization chart?
A project organization chart helps to identify the roles and
responsibilities undertaken by a team as well as whether training is
needed, how to allocate resources, and find ways to involve the
participation of stakeholders. The steps necessary are as follows-

1. Identify personnel
The first step is to identify the people related to the project and who
has the power to yield a powerful impact on the project. These are
generally the key staffs that influence marketers, department heads,
salespeople, support staff, consultants, and even IT personnel.
2. Create management team
The second step is creating a team that will be responsible for the
project and making sure that it is successful.

3. Assign project coordinators

The third step includes assigning project coordinators who will be the
point-person at mid and low management. It will be their
responsibility to carry out duties at this level and coordinate team
tasks.
4. Stakeholders
Identify the key stakeholders and try to involve them in the project
development.

5. Identify training requirements

In some cases, a team can handle a task efficiently. In contrast, others,
do not have enough tools, skills, or knowledge to handle the activities
of the project. Identify the training requirements and offer to the
members who need.
 Chapter 6
Project Monitoring and Control
 Monitoring:
Monitoring is the process of collecting, recording, and reporting
information concerning any aspects of project performance that
the project manager or others in the organization wish to know.

 The planning-monitoring-controlling cycle

• The functions of making plans, monitoring, and controlling

are closely related to a project.

• That’s why most of the projects are managed by using a loop

to maintain that relationship.
• The key things to be planned, monitored, and controlled are
time, cost, and performance.

• If, those are set precisely the control process will work as a
closed-loop system and the planning-monitoring-controlling
cycle will be continued in the process until the project is
completed.
 Designing the monitoring system

1. Identify the key factors to be controlled:

• The monitoring system must identify the key factors to be
controlled.
• Clearly, the project manager wants to monitor performance,
cost, and time.
• Project manager must define which specific characteristics of
performance, cost, and time should be controlled and then
establish exact boundaries within which control should be
maintained.

2. Considering data:
Project manager needs to collect data on the basis of importance.
Project manager should collect both quantitative and qualitative
data.
3. Measuring output:
Monitoring should concentrate on measuring various facets of
output rather than the intensity of activity. It is important to
remember that effective project managers are not interested in
how hard their project teams work. They are interested in
achieving results.

4. Information to be collected must be identified:

The information to be collected must be arranged and classified
in a way so that it could be identified according to its nature.
This may consist of accounting data, operating data,
engineering test data, customer reactions, etc.
 How does a project manager collect data?
• Data can be collected and gathered using different methods
but in the case of project management concerned, it is more
important to concentrate on the forms of data.

• A large proportion of all data collected take one of the

following forms, each of which is suitable for some types of
measures:

1. Frequency counts: A frequency count is a measure of the

number of times that an event occurs. The type of measure is
often used for ‘complaints’, ‘number of times a project report
is late’, and similar items.
2. Raw numbers: Raw number indicates the accurate figure of
any data. Dates, dollars, hours, physical amount of resources
used, and specifications are usually reported in this way. The
numbers are reported in a wide variety of ways, but often as
direct comparisons with expected or standard numbers.

3. Subjective numeric ratings: These numbers are subjective

estimates, usually of quality, made by knowledgeable
individuals or groups. Those can be expressed in numeric terms.
4. Indicators: When the project manager can not measure
some aspect of performance directly, it may be possible to find
an indirect measure or indicator. Changes are incorporated into
the project often a good measure of team efficiency.

5. Verbal measures: Data is collected by asking questions to

the team members regarding the project’s progress. Measuring
the project performance in terms of ‘quality of team member
and team cooperation’ frequently takes the form of verbal
measures.
 Project report
After data collection has been completed, reports on project
progress should be generated. These includes:

• Status report: To what extent the project work has been

completed.

• Time/cost report: How much time and cost are involved in

completing a task or a part of a task.

• Variance report: How do the actual performance, time, and

cost vary with the standard.
 In case of preparing the project report the following
points should be kept in mind:
1. Depth of the report:
The reports do not need the same depth for each level. Lower-
level personnel has a need for detailed information but the upper
level may not have the time to go through the detail.

2. Frequency of the report:

Report frequency is usually high for the lower level but reports
should be issued less often to the upper level.
 Project Control
• Control is the act of reducing the difference between a plan
and reality.

• In a project, reporting performance, comparing the difference

between desired and actual performance levels, and finding
why such differences exist are all parts of the control process.
 Types of control processes
There are three basic types of control mechanisms used in project
control:
1. Cybernetic control
• The key feature of cybernetic control is its automatic
operation.
• This function is performed by sensors that measure one or
more aspects of the output, those aspects one wishes to control.
• Measurements taken by a sensor are transmitted to the
comparator, which compares them with a set of predetermined
standards.
• The difference between actual and standard is sent to the
decision-maker, which determines whether or not the
difference is of sufficient size to deserve correction.
2. Go/No-go control:
• This technique can be used when facing a risk condition
where a risk response has been prepared.
• If the risk condition is not present, the control decision will
be to “go,” or continue as planned without implementing the
risk response.
• On the other hand, if the risk condition is present then a “no-
go” control decision must be made. This simply means that
the original plan is replaced with the risk response plan.

3. Post control:
• Control followed after completion of a project is narrated as
post control.
• As a project is a single-time activity so controlling activities
after its completion would not work.
• But, the experience of the project would help to run another
project effectively and it is the main cause of post control.