Project Management

BA GES / BA HRM

Prof Assem Tharwat

Professor
Synergy Univeristy Dubai
 Chapter 3
Organization Structure & Culture
 Topics
 1- Organisationnel Structures
 2- Organisationnel Culture
 3- Projects and Organizational Strategy
 4- Stakeholder Management
 5- Heavyweight Project Organizations
 6- Project Management Offices
 7- Q&A - Discussions
 Organizational Structure

Consists of three key elements:

1. Designates formal reporting relationships
– number of levels in the hierarchy
– span of control
2. Groupings of:
– individuals into departments
– departments into the total organization
3. Design of systems for
– effective communication
– coordination
– integration across departments
 Organisationnel Structures
Key Types of Organisationnel Structures
Hierarchical Structure
Functional Structure
Divisional Structure
Flat Structure
Matrix Structure
Network Structure
Project structure
 Project Management Structures
 Three different project management structures are:

1. Functional organization

2. Dedicated project teams

3. Matrix structure
– Weak matrix
– Balanced matrix
– Strong matrix
 1. Hierarchical Structure

 A hierarchical structure is an organization structure that

follows a chain-of-command from the top executives to
regular employees. It resembles a pyramid, and the
individual with the most authority occupies a sole senior-
most position above the pyramid, while the junior-most
workers occupy the positions at the bottom.
 1. Hierarchical Structure

 Follows a direct chain of command from the top to the

bottom
Pros:
–Control orientation
–Clear career and promotion path
–Clearly defined authority
Cons:
–Poor communication
–Slow decision-making processes
–Lack of efficiency
 2. Functional Structure
 The functional org chart is a very common organizational
structure that many companies follow, which is supposed to
divide people into several departments according to
peoples’ specialties and function they perform in the
company. Persons with rich experience and profession
would be appointed as department manager authorized to
be totally responsible for department’s affair such as
training, the task allocating and promotion.

 Functional organizations – group people performing similar

activities into departments
 2- Functional Structure

 Groups collaborators by speciality, skill, or related role.

 Fits better large firms that employ individuals with similar
roles.
Pros:
–Increased productivity
–Skill development
–Clarity
Cons:
–Competition between divisions
–Narrow scope
Organizing Projects within the Functional
Organization
• Top management decides to implement the project,

and different segments of the project are distributed to

appropriate areas.
• Coordination is maintained through normal

management channels.
• It is commonly used when one functional area plays a

dominant role in completing the project or has a

dominant interest in the success of the project.
Functional Organizations
Functional Structures for Project Management

Strengths Weaknesses
1. Firm’s design maintained 1. Functional siloing

2. Fosters development of in- 2. Lack of customer focus

depth knowledge

3. Standard career paths 3. Projects may take longer

4. Project team members remain 4. Projects may be sub-

connected with their functional optimized
group
 Advantages and Disadvantages of using Functional
Organization to Administer and Complete projects

 Advantages  Disadvantages

1. No change 1. Lack of focus

2. Flexibility 2. Poor integration
3. In-depth expertise 3. Slow
4. Easy post-project 4. Lack of ownership
transition
 3. Divisional Structure

 In divisional organizational structures, a company's

divisions have control over their own resources,
essentially operating like their own company within the
larger organization.
 3. Divisional Structure
 1) Market-based
 2) Product-based
 3) Geographical zone-based

Pros:
–Accountability and transparency
–Improves firm culture
–Gains local competitive advantage
Cons:
–Increased operational costs
–Economy of scales
–Encourages rivalries
 4. Flat Structure

 A flat organizational structure is a company with few or

no hierarchical levels between employees, which means
that all employees have essentially the same power and
authority. The lack of hierarchy can be seen as a positive
attribute because it allows for more communication and
collaboration between employees.
 4. Flat Structure
 Low levels of middle-management between executives
and frontline employees.
 Popular in the tech industry and startups.
Pros:
–Lower operating costs
–Improved communications
–Gains local competitive advantage
Cons:
–Difficult for large firms
–Low employee retention
 5. Matrix Structure

 A matrix organization is a company structure where

teams report to multiple leaders. The matrix design keeps
open communication between teams and can help
companies create more innovative products and
services. Using this structure prevents teams from
needing to realign every time a new project begins.

 Matrix organizations – create a dual hierarchy in which

functions and projects have equal prominence
Matrix Organization Structure

 FIGURE 3.4
 5. Matrix Structure
 A combination of two or more different kinds of
organizational structures, such as project management
and functional structure.
 Popular in the tech industry and start-ups.
Pros:
–Encourage collaboration
–Increase efficiency
Cons:
–Unclear management authority and team roles
–Increased work overload
 5. Matrix Structure

• The matrix structure is designed to utilize resources

optimally.
– Individuals work on multiple projects as well as being
capable of performing normal functional duties.
– It attempts to achieve greater integration by creating
and legitimizing the authority of a project manager.
– It provides dual focus between functional/technical
expertise and project requirements.
Responsibilities in a Matrix Structure

23
 TABLE 3.1
 Different Matrix Forms
 Weak matrix

• This form is very similar to a functional approach with the

exception that there is a formally designed project

manager responsible for coordinating project activities.
• Functional managers are responsible for managing their

segment of the project.

• The project manager acts as a staff assistant who draws

the schedules and checklists, collects information on the

status of the work, and facilitates project completion.
 Different Matrix Forms
 Balanced matrix

• The project manager is responsible for defining what

needs to be accomplished. The project manager

establishes the overall plan for completing the project,
integrates the contribution of the different disciplines, set
schedules, and monitors progress.
• The functional managers are concerned with how it will be

accomplished. The functional managers are responsible

for assigning personnel and executing their segment of the
project according to the standards and schedules set by
 Different Matrix Forms
 Strong matrix

• The project manager controls most aspects of the project,

including scope trade-offs and assignment of functional

personnel. The project manager controls when and what
specialists do and has final say on major project decisions.
• The functional managers have title over their people and

are consulted on a need basis. The functional managers

serve as subcontractors for the project.
Matrix Structures for Project Management

Strengths Weaknesses
1. Suited to dynamic 1. Dual hierarchies mean two
environments bosses

2. Equal emphasis on project 2. Negotiation required in order

management and functional to share resources
efficiency

3. Promotes coordination across 3. Workers caught between

functional units competing project & functional
demands
4. Maximizes scarce resources
 Advantages and Disadvantages
of Matrix Management

 Advantages  Disadvantages

1. Efficient 1. Dysfunctional conflict

2. Strong project focus 2. Infighting

3. Easier post-project 3. Stressful

transition 4. Slow
4. Flexible
 6. Network Structure

 In a network structure, an organization's units comprise

teams that work together to achieve an overarching
organizational goal, and the teams use an iterative
approach to accomplish their tasks. When management
creates a team to solve a problem, the team: Assesses
the task. Creates a specific strategy.
 6. Network Structure

 More than one organization combine and partner up to

produce a good or service.
 Relevant to collaborative projects.
 Pros:
– Focus on core activities
– Lower costs
– Increased efficiency
– Diversified expertise
Cons:
– Lack of secrecy
– Low control
 7- Project structure

 A project organization structure helps get clear

communication guidelines and procedures because it is
used to communicate the roles and responsibilities of
each team member. It also contains information about
reporting relationships, forms, templates, and checklists
required for various processes.

 Project organizations – group people into project teams

on temporary assignments
 7- Project structure

 Pros:
 Better Communication
 Teams Resolve Problems Quicker
 Flexible and Empowered Workforce
 Cons:
 Potential for Conflict
 Some People are not Team Players
 Under-performing Employees Hide Behind the Team
 Organizing Projects as Dedicated Teams
• Dedicated project teams operate as units separate from the rest of the
parent organization.
• A full-time project manager is designated to pull together a core group
of specialists who work full time on the project.
• The project manager recruits necessary personnel from both within
and outside the parent company.
• In a projectized organization where projects are the dominant form of
business, the entire organization is designed to support project teams.
• “Projectitis” is referred to as a negative dimension to dedicated project
teams. A we-they attitude can emerge between project team
members and the rest of the organization.
Projectized Organization Structure
Project Structures for Project Management

Strengths Weaknesses
1. Project manager sole authority 1. Expensive to set up and
maintain teams
2. Improved communication
2. Chance of loyalty to the
3. Effective decision-making project rather than the firm

4. Creation of project 3. No pool of specific knowledge

management experts
4. Workers unassigned at project
5. Rapid response end
 Strengths and Weaknesses of the
Dedicated Project Team Approach

 Strengths  Weaknesses

1. Simple 1. Expensive

2. Fast 2. Internal strife

3. Cohesive 3. Limited technological

4. Cross-functional expertise

integration 4. Difficult post-project

transition
 Centralized vs. Decentralized
Organizational Structures
 From a big picture viewpoint, an organizational structure is
either centralized or decentralized. Centralized structures
have linear hierarchies with a clear line of command
between superiors and subordinates – such as exists in the
army, for example. These structures are typically shaped
like a pyramid. The board of directors sits at the top of the
pyramid, making decisions that are then passed down
through the CEO and executive team, to department
managers, line managers and finally, to the workforce at the
bottom of the pyramid.
 Organizational Culture

 Organizational culture refers to the shared values, beliefs,

norms, and practices that shape the behaviour of individuals
within an organization. It is the personality of an organization
and can impact how employees interact with each other and
with external stakeholders. In other words, Culture affects
how people experience an organization , that is, what it's
like for a customer to buy from a company or a supplier
to work with it.

 Culture is reflected through Structure

 Organizational Culture
The unwritten rules of behavior, or norms that are used to shape and
guide behavior, is shared by some subset of organization members
and is taught to all new members of the company.

Key factors that affect culture development

– Technology
– Environment
– Geographical location
– Reward systems
– Rules and procedures
– Key organizational members
– Critical incidents
Key Dimensions for Organization’s
Culture
 Cultural Influences
 Technology
 Environment
 Geographical location
 Reward systems
 Rules and procedures
 Key organizational members
 Critical incidents
Apple’s Organizational Structure and
Culture

Structure:
https://www.youtube.com/
watch?v=5hENFA3CJUY
Culture:
https://www.youtube.com/
watch?v=xcTtQ0hiHbE
 Organizational Culture Affects Project
Management in:

 Departmental interaction

 Employee commitment to goals

 Project planning

 Performance evaluation
 Organizational Culture Impacts The
Project Management Process

Firm’s culture impacts how you go about:

–Ideation Process
–Proposal Process
–Selection Process
–Implementation Process
–Evaluation Process
 Projects and Organizational Strategy
Strategic management – the science of
formulating, implementing and evaluating
cross-functional decisions that enable an
organization to achieve its objectives.

Consists of:
– Developing vision and mission statements
– Formulating, implementing and evaluating
– Making cross functional decisions
– Achieving objectives
 Projects Reflect Strategy

Projects are stepping stones of corporate strategy

The firm’s strategic development is a driving force
behind project development
Some examples include:

A firm wishing to… may have a project

redevelop products or processes,
change strategic direction or product
portfolio configuration,
improve cross-organizational
communication & efficiency
to reengineer products or processes.
to create new product lines.
to install an enterprise IT system.
Relationship of Strategic Elements

Mission

Objectives

Strategy Goals Programs

 Stakeholder Management

Stakeholders are all individuals or groups who have

an active stake in the project and can potentially impact,
either positively or negatively, its development.

Sets of project stakeholders include:

Internal Stakeholders External Stakeholders

• Top management • Clients
• Competitors
• Accountant
• Suppliers
• Other functional managers • Environmental, political, consumer, and
• Project team members other intervenor groups
 Project Stakeholder Relationships

Parent
Organization
Other External
Functional Environment
Managers

Project Top
Clients Management
Manager

Project
Fig 2.3 Accountant Team
 Managing Stakeholders

1. Assess the environment

2. Identify the goals of the principal actors

3. Assess your own capabilities

4. Define the problem

5. Develop solutions

6. Test and refine the solutions

Project Stakeholder Management Cycle

Identify
Stakeholders

Implement Gather Information

Stakeholder on Stakeholders
Management
Strategy
Project
Management Team
Predict
Identify
Stakeholder
Stakeholders’
Behavior
Mission

Identify
Stakeholder Determine
Strategy Stakeholder
Strengths &
Weaknesses
 Heavyweight Project Organizations
Organizations can sometimes gain tremendous benefit from
creating a fully-dedicated project organization

Lockheed Corporation’s “Skunkworks”

 Project manager authority expanded

 Functional alignment abandoned in favor of market
opportunism
 Focus on external customer
 Project Management Offices
Centralized units that oversee or improve the
management of projects. It plays a critical
role in helping matrix systems mature into
more effective project delivery platforms.
Resource centers for:
– Technical details offloaded from manager
– Expertise in project management skills
– Repository of lessons learned, documentation
– Center for project management excellence
 Forms of PMOs

• Can be characterized in different kinds:

– Weather station
Tracks and monitors project performance.
– Control tower
Improves project execution.
– Resource pool
Provides the organization with a cadre of trained project
managers and professionals.
– Command and control center—has direct authority over the
project.
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