Organization Strategy and Culture

CHAPTER THREE
Organization
Strategy and
Culture
Copyright 2014 McGraw-Hill Education.

All Rights Reserved.
PowerPoint Presentation by Charlie Cook
Where
Where We
We Are
Are Now
Now
32
Project
Project Management
Management Structures
Structures
Challenges to Organizing Projects
The uniqueness and short duration of projects relative
to ongoing longer-term organizational activities
The multidisciplinary and cross-functional nature of
projects creates authority and responsibility dilemmas.
Choosing an Appropriate Project Management

Structure
The best system balances
the needs of the project
with the needs of the
organization.
33
Project
Project Management
Structures (contd)
(contd)
Organizing Projects: Functional organization
Different segments of the project are delegated
to respective functional units.
Coordination is maintained through normal
management channels.
Used when
the interest (work content) of one functional area
dominates the project or

one functional area has a dominant interest in the
projects success.
34
Functional
Functional Organizations
Organizations
FIGURE 3.1
35
Functional
Functional Organization
Organization of
of Projects
Projects
Advantages
1. No structural
change
2. Flexibility
3. In-depth expertise
Disadvantages
1. Lack of focus
2. Poor integration
3. Slow
4. Lack of ownership
4. Easy post-project
transition
36
Project
Project Management
Structures (contd)
(contd)
Organizing Projects: Dedicated Teams
Teams operate as separate units under the
leadership of a full-time project manager.
In a projectized organization where projects are the
dominant form of business, functional departments
are responsible for providing support for its teams.
37
Dedicated
Dedicated Project
Project Team
Team
FIGURE 3.2
38
Project
Project Organization:
Organization: Dedicated
Dedicated Team
Team
Advantages
Disadvantages
1. Simple
1. Expensive
2. Fast
2. Internal Strife
3. Cohesive
4. Cross-Functional
Integration
Divisiveness between project team

and the parent company
3. Limited (in house)

Technological
Expertise
4. Difficult Post-Project
Transition
39
Projectized
Projectized Organizational
Organizational Structure
Structure
FIGURE 3.3
310
Project
Project Management
Structures (contd)
(contd)
Organizing Projects: Matrix Structure
Hybrid organizational structure (matrix) is overlaid on
the normal functional structure.
Two chains of command (functional and project)
Project participants report simultaneously to both
functional and project managers.
Matrix structure optimizes the use of resources.

Allows for participation on multiple projects while
performing normal functional duties.

Achieves a greater integration of expertise and
project requirements.
311
Matrix
Matrix Organization
Organization Structure
Structure
FIGURE 3.4
312
Division
Division of
of Project
Project Manager
Manager and
and Functional
Functional
Manager
Manager Responsibilities
Responsibilities in
in aa Matrix
Matrix Structure
Structure
Project Manager
Negotiated Issues
Functional Manager
What has to be done?
Who will do the task?
How will it be done?
When should the task be done?
Where will the task be done?
How much money is available

to do the task?
Why will the task be done?
How will the project involvement

impact normal functional activities?
How well has the total project

been done?
Is the task satisfactorily

completed?
How well has the functional

input been integrated?
TABLE 3.1
313
Different
Different Matrix
Matrix Forms
Forms
Weak Form
The authority of the functional manager predominates
and the project manager has indirect authority.
Balanced Form
The project manager sets the overall plan and the
functional manager determines how work to be done.
Strong Form
The project manager has broader control and
functional departments act as subcontractors
to the project.
314
Project
Project Organization:
Organization: Matrix
Matrix Form
Form
Advantages
(compared to
functional org.)
1. Efficient
Disadvantages
1. Dysfunctional Conflict
Predicated on tension between

functional managers and project
managers,
Due to different expertise &

perspectives, resulting from
conflicting agendas and
accountabilities.
2. Strong Project Focus

3. Easier Post-Project
Transition
2. Infighting
4. Flexible
Among project managers due to

sharing resources
3. Stressful
As it violates the unity of command

mgt. principle
4. Slower than projectized org.
In order to forge agreements across

functional groups
315
Choosing
Choosing the
the Appropriate
Appropriate Project
Project
Management
Management Structure
Structure
Organization (Form) Considerations
How important is project (mgt.) to the firms success?
If critical, => consider projectized organization
What percentage of core work involves projects?

More than 75% of core work involves projects => use project org.
Have both MTS & MTO in the org., => consider matrix.
Very few projects, => dedicated teams or outsourcing
What level of critical resources (human and physical)

are available?
Somewhat available but need to share, => matrix
Not available, => outsourcing
316
Choosing
Choosing the
the Appropriate
Appropriate Project
Project
Management
Management Structure
Structure (contd)
(contd)
Project Considerations
1. Size of project
2. Strategic importance
3. Novelty and need for innovation
4. Need for integration (number of departments involved)
5. Environmental complexity (number of external interfaces)
6. Budget and time constraints
7. Stability of resource requirements
Notes:
The higher the levels of these factors, the more autonomy and
authority the project manger and project team need in order to
be successful
317
Organizational
Organizational Culture
Culture
Organizational Culture Defined
A system of shared norms, beliefs, values, and
assumptions which bind people together, thereby
creating shared meanings.
The personality of the organization that sets it
apart from other organizations.
Provides a sense of identify to its members.
Helps legitimize the management system of the
organization.
Clarifies and reinforces standards of behavior.
318
Key
Key Dimensions
Dimensions Defining
Defining an
an Organizations
Organizations Culture
Culture
FIGURE 3.5
319
Identifying
Identifying Cultural
Cultural Characteristics
Characteristics
Study the physical characteristics
of an organization.
Read about the organization.
Observe how people interact
within the organization.
Interpret stories and folklore
surrounding the organization.
320
Organizational
Culture Diagnosis
Diagnosis Worksheet
Worksheet
Power Corp.
I. Physical Characteristics:
Architecture, office layout, dcor, attire
Corporate HQ is 20 Story modern buildingpresident on top floor. Offices are bigger in the top floors
than lower floors. Formal business attire (white shirts, ties, power suits, . . . ) Power appears to
increase the higher up you are.
II. Public Documents:
Annual reports, internal newsletters, vision statements
At the heart of the Power Corp. Way is our vision . . . to be the global energy company most admired
for its people, partnership and performance. Integrity. We are honest with others and ourselves. We
meet the highest ethical standards in all business dealings. We do what we say we will do.
III. Behavior:
Pace, language, meetings, issues discussed, decision-making style, communication patterns, rituals
Hierarchical decision-making, pace brisk but orderly, meetings start on time and end on time,
subordinates choose their words very carefully when talking to superiors, people rarely work past
6:00 P.M., president takes top performing unit on a boat cruise each year . . .
IV. Folklore:
Stories, anecdotes, heroines, heroes, villains
Young project manager was fired after going over his bosss head to ask for additional funds.
Stephanie C. considered a hero for taking complete responsibility for a technical error.
Jack S. was labeled a traitor for joining chief competitor after working for Power Corp. for 15 years.
FIGURE 3.6
321
Implications
Implications of
of Organizational
Culture
for
for Organizing
Organizing Projects
Projects
Challenges for Project Managers
in Navigating Organizational Cultures
Interacting with the culture and subcultures
of the parent organization
Interacting with the projects clients
or customer organizations
Interacting with other organizations
connected to the project
322
Cultural
Cultural Dimensions
Dimensions of
of an
an Organization
Organization Supportive
Supportive
of
of Project
Project Management
Management
FIGURE 3.7
323
Key
Key Terms
Terms
Balanced matrix
Dedicated project team
Matrix
Organizational culture
Projectized organization
Project Office (PO)
Strong matrix
Weak matrix
324

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CHAPTER THREE

Copyright 2014 McGraw-Hill Education.

Choosing an Appropriate Project Management

dominates the project or

Divisiveness between project team

3. Limited (in house)

functional and project managers.

Matrix structure optimizes the use of resources.

performing normal functional duties.

What has to be done?

Who will do the task?

How will it be done?

When should the task be done?

Where will the task be done?

How much money is available

Why will the task be done?

How will the project involvement

How well has the total project

Is the task satisfactorily

How well has the functional

Predicated on tension between

Due to different expertise &

2. Strong Project Focus

Among project managers due to

As it violates the unity of command

4. Slower than projectized org.

In order to forge agreements across

What percentage of core work involves projects?

What level of critical resources (human and physical)

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