Unit Three

Project Organization and Project Organization: Functional ImplementationOrganization. Organization & Matrix
Project Team Building. project Implementation & its process. Project procurement management Conflict and Negotiation in the Project. Risk Involvement in Project Project Risk Management
4/18/12 Project Management/ Unit 11

Project Organization
Project organization is essential for

the designing of project structure, pooling of human & non-human resources, establishing authority & responsibility relationship & establishment of project office. It is the engine of project management. It coordinates & integrates human & 4/18/12 Project Management/ Unit 22 non-human resources of the project.

The project organization is a temporary

organization. It lasts till the life of the project. Project organization can be defined as a group of people who must coordinate their activities in order to meet organizational objectives. Project organization is concerned with the patterns of relationship between person in project so contrived upon as to fulfill theProject Management/ Unit project function. 4/18/12 33

Project organization consists: a structure: Group 1. Designing

of project activities are assigned to positions. Organization chart reflects the structure. It defines project hierarchy. 2. Pulling together project team: It is drawn from functional departments for a specific purpose. Integration is done through coordination Management/ Unit mechanism. 4/18/12 Project 44

1.Establishing

authority & responsibility relationship: Authority & responsibility of each position is clearly defined. Job description are prepared. 2.Establishing project office: A project office is established to serve for the project. 4/18/12 Project Management/ Unit 55

The Project as a part of the Functional Organization

The project activities are performed as

a part of functional organization that consists various functional departments such as production, marketing, finance, human resource & R&D departments. It is pyramid or hierarchical in shape. The project is assigned to functional unit that has the interest in ensuring its success or can be helpful in 4/18/12 Project Management/ Unit 66 implementing it.

 A person is appointed with the main

responsibility of coordinating the work of people in the functional departments. The person usually designated as project coordinator act in a staff position to facilitate the coordination of line management in functional department. It is suitable for small nature of the
4/18/12 Project Management/ Unit 77

Functional organization Structure

GM

Producti on Depart ment Projec tA Projec 4/18/12 t B

Market ing Dept.

Financ ial Dept.

Huma n Resou rce Dept.

R& D Dept .
88

Project Management/ Unit

Advantages
1. Flexibility:

This structure facilitates maximum flexibility in the use of existing human resources. 2. Specialization: This structure develops expertise & specialization in human resources. 3. It provides better supervision & increases efficiency of the project. 4. The mass production is possible in this structure due to the provision of specialization & standardization. Project Management/ Unit 99 5. 4/18/12 is systematic communication channel There

Disadvantages
1. Lack of project focus: There is no

clear cut responsibility for the project. There is no mechanism for the effective coordination & integration of resources for the project. 2. Decision delays: Decision delays result because of hierarchy. 3. There is low morale & motivation among employees. 4. It fails to take holistic approach in project. Project Management/ Unit 4/18/12 1010

Matrix Organization
Matrix

organization structure is formed to complete various types of project of specific & unique nature. It requires diverse technical & administrative experts to adjust efficiently with dynamic & rapidly changing environment of the organization.
4/18/12 Project Management/ Unit 1111

It has been developed to meet the

need of large & complex organization which requires a structure more flexible & technically oriented rather than the product functioning structure. This form of organization superimposes project structure on functional structure. The basic organizational design is functional. 4/18/12 Management/ TemporaryProjectproject Unit structure 1212is

The project team is assigned from

the functional departments. The project manager has overall responsibility for achieving project objectives. It is most useful structure wherever a new task is to be done when specialist from different areas must grouped together, when a compact project constraints & deadlines must 4/18/12 Project certain cost limits. 1313 be met within Management/ Unit

1. Focus on project objectives: This

Advantages

structure focuses on project objectives through the project manager. 2. Coordination: The interface between project manager & functional managers facilitates coordination across department lines. 3. Flexibility: It provides adequate flexibility & able to adopt the changes during the project implementation. 4. Efficiency: It facilitates efficient utilization Project Management/ Unit of organizational resources. 4/18/12 1414

5. Employee

development: Employees develop their skills & knowledge through interdisciplinary interactions. 6. Free time for top management: The authority for day to day decisions in the project is delegated to project manager which makes free time for top 4/18/12 Project Management/ Unit planning 1515 & management for

1. Dual boss problem: The project employees

Disadvantages

report vertically to departmental managers. Horizontally, they report to the project manager. 2. There is conflict between management goal & project goal. 3. Many problems & difficulties may create in monitoring & control. 4. There is duplication of efforts & resources. Project can duplicate the efforts of line department. 5. This structure is costly to implement & 4/18/12 Project Management/ Unit 1616 maintain. Overheads are heavy.

Project Team Building

Team means two or more than two

persons who work together to achieve common objectives. It consists of two or more people who: v Perceive themselves as a group. v Interact & are independent on each other to achieve a common objectives. Team work consists of a group of people from different backgrounds, experiences, disciplines, skills & 4/18/12 Project Management/ a 1717 personal needs. It is Unit continuous &

 The success of any project depends upon

whether the people who been brought into its fold will willingly cooperate with each other or not. When all participants of the project work hand in hand for the good of the project, then the participant can said to be working as a team. Successful teams do not just happen. They need to be built. A project manager is the leader of the project team. It is his responsibility to build project people into a cohesive Management/ Unit integrating 1818 their 4/18/12 Project team by

Identify Necessary Skills Identify People With Skills Talk to Potential Team Members Negotiate with Their Supervisor Success? Ye s Assemble the Team
4/18/12

Building the Project Team

Renegotiate with Top Management

No Yes

Success? No

Build Fallback Positions

Project Management/ Unit

Characteristics of project team

Project team is a formal group created to

achieve particular objectives. The followings are the major characteristics of project team: 1. Performance: There is high performance & task efficiency of the team members. 2. Commitment: There is high level of commitment of members to fulfill the project objectives. 3. Innovative: Innovative & creative behavior on the part of team members are reflected in team work. They seek better ways of doing things. 4/18/12 Project Management/ Unit 2020

4. Member goals: The personal goals of

team members are in harmony with project goals & requirements. 5. Result orientation: The project team is focused on achieving project results as the key priority. 6. Enthusiasm: The project team has high energy levels & enthusiasm. The level of morale is high. 7. Communication: There is an effective & open communication within the 4/18/12 Project 2121 project team. Management/ Unit

8. Conflict

management: Functional conflict is encouraged & managed by the project team for beneficial results. 9. Interdependence: The project team members are highly interdependent & interface with each other. 10.Trust: There is high level of trust & cooperation among the team members. 11.Change orientation: The project manager is concerned with creating & managing change.
4/18/12 Project Management/ Unit 2222

Effective Project Teams

v Clear Sense of Mission v Cohesiveness v Trust v Enthusiasm v Results Orientation v Productive Interdependency

4/18/12

Project Management/ Unit

Poorly developed or unclear goals Poorly defined project team roles &
interdependencies Lack of project team motivation Poor communication Poor leadership Turnover among project team members Dysfunctional behavior
4/18/12 Project Management/ Unit

Reasons Why Teams Fail

Stages in Group Development 1. Forming members

acquainted
2. Storming conflict begins 3. Norming

become

members members

reach work

agreement
4. Performing

together
4/18/12 Project 5. Adjourning Management/ Unit group disbands

4. Performing

Team Development Stages Adjourn Convene

1. Forming
n sio clu In
Pro du cti
Trust Flexible Supportive Confident Efficient High Morale

vit y

Quiet Polite Guarded Impersonal Business-like High Morale

Productive Organized
Establish procedures Develop team skills Confront issues Rebuild morale

Testing Infighting
Conflict over control Confrontational Alienation Personal agendas Low morale

3. Norming
4/18/12

on ati er op Co

Project Management/ Unit

Co ntr ol

2. Storming

Barriers to the project team development

1. Differing outlook, priorities &

interest: The professional outlooks & priorities of team members may differ from the project objectives & priorities. 2. Unclear project objectives: Power struggles & conflicts between team members occur when there is lacking of clear 4/18/12 Project Management/ Unit 2727 defined project objectives.

3. Lack

of team member commitment: Due to the lack of team members commitment, project activities can not be effectively performed. The sources of poor commitment among team members may be: q. Feeling of job insecurity in the project. q. Interpersonal conflict within the team. q. Unclear reward & punishment policy. q. Lack of professional interests of the team members. 4/18/12 Project Management/ Unit 2828

4. Lack of top management support:

Lack of top management support results in team member poor level of enthusiasm & poor commitment to the project. The top management may not provide adequate attention to create right project environment. 5. Communication problems: Poor communication system also adversely affects for the project team development. There should be continuous & regular flow of 4/18/12 Project Management/ Unit 2929 communication among the project

6. Poor selection of team members: The

appropriate project team can not be developed if the project manager may not give adequate attention in the selection of team members. Poor selection of team members results in low motivation, conflict & lack of motivation. 7. Dynamic & complex project environment: It is very difficult to work project activities in the dynamic & complex project environment. Due to the changes in the internal & external environment, the project activities are highly affected & it is difficult to Project Management/ Unit make adjustment over 3030 such 4/18/12

Factors Affecting Project Team Building The project manager 1. Project culture:
should set team norm & behaviors to build project team. He should create conducive environment in the project for effective teamwork. 2. Clear sense of direction: Every member of the team should know why he is in the team. There should be no confusion about any aspect of the project. The objective & outcomes should be Project Management/ Unit made clear. 4/18/12 3131

3. Communication:

Sharing of information, opinions & feelings should be encouraged among team members. Information flow should be in all directions-vertical, horizontal & diagonal. 4. Leadership: The project manager should guide & influence team members to create team spirit to achieve project targets willingly & enthusiastically. He should build trust & respect in Project Management/ Unit the team. 4/18/12 3232

5. Team

stability: The project manager should give proper emphasis for team stability. Stability facilitates team building. Team members should be properly selected. 6. Relationships: The authorityresponsibility relationships of team members should be clearly stated. The reporting relationship should be clarified. Unit 4/18/12 Project Management/ 3333

7. Development:

Personal growth & development of team members should be encouraged. Training & development opportunities should be made available to the team. 8. Control: The team performance should be controlled. Actual performance should be compared with targets to find out the deviations. Corrective actions should be taken over such deviations. Good performance should be rewarded.
4/18/12 Project Management/ Unit 3434

Project Implementation
Project implementation is vital phase of

project which helps to convert project plans into action. Project implementation involves the allocation of project tasks to project team within the project organization. Project in paper does not yield any results. Project plan has to be converted into action by adopting certain procedures. 4/18/12 project manager is responsible for The Project Management/ Unit 3535

1. Preparing

for

project

implementation .The first step of project implementation is to establish the project office at project site & arrangement of human & non-human resources. Procedures for Project .This is the preparation step of project implementation in Implementation which project manager tries to convert project plan into action. .The following things should be 4/18/12 Project Management/ Unit considered for the preparation for3636 the

a. Establishing the project office: The

project office should be established at the project site. All physical & logistic facilities needed in an office should be provided. b. Acquisition of human resources: The success of project activities largely depends on the competency, efficiency & skills of the project team. The project manager should manage & acquire the capable & talent manpower in the project. Project Management/ Unit 4/18/12 3737

c. Defining

& assigning responsibility: Every level of management & employees should have their own job description which can specify the duties & responsibilities, authority, accountability for results in a precise way. d. Establishing a project information system: An information system should be established to record all project 4/18/12 3838 activities. Project Management/ Unit The project information

2. Engaging

&

Supervising

consultant .Project extensively used consultants for specialized activities like preparation & review of engineering design, bidding documents, evaluation of bids, civil construction works on etc. .The project manager has to prepare the guidelines to be followed in the appointment of capable & experienced consultants.
4/18/12 Project Management/ Unit 3939

 The work of consultants has significant

effect on project functioning & progress. So the work of consultants should be closely supervised & monitored. 3. Contracting for civil works .It involves preparation & application of guidelines, procedures, financial rules & regulations for contracting of civil works. .Projects involve a lot of contracting & subcontracting for civil construction 4/18/12 Project 4040 work. Almost Management/ Unit 80% of project work is

 Generally, selection of contractors is

based on: i. Tender documents( including engineering design) ii. Notice for call of tender bids iii. Evaluation of tender bids & selection of contractor. iv. Contract agreement with the selected contractor. . Contractors play a vital role in project implementation.
4/18/12 Project Management/ Unit 4141

4. Procurement of goods & services .Projects allocate a major portion of

budget for the procurement of goods & services. .Proper financial rules & regulations & guidelines must be followed in procurement of goods & services. .Delay in procurements results in delay in project implementation. Generally, procurement can be made through: i. Direct purchase from the market. ii. Calling tender which can be local, 4/18/12 4242 national &Project Management/ Unit global.

5. Supervision

of equipment installation & civil works .The project consultants & technical personnel are engaged in supervision & installation of machinery & equipments. .Project consultants & technical personnel should supervise the construction of civil works. .The supervision should be done on the basis of international construction standards. 4/18/12 Project Management/ Unit 4343

6.Receiving project budget . The financial resources are

the key elements for the implementation of project activities. .It can be acquired from the concerned donors, sponsor, customers & parent organization. 4/18/12 Project Management/ Unit 4444

7. Controlling cost .Project investment

should be controlled in order to make it feasible to operate within budget. .Project manager should control the cost by using the standard costing & budgetary control techniques. .Cost is major constraints in the 4/18/12 4545 project. Project Management/ Unit

8. Adjusting project changes .Project operates in a dynamic

environment. Environmental change necessitates changes in project functioning. .The implication of such changes on cost, time & quality should be carefully studied.
4/18/12 Project Management/ Unit 4646

9. Monitoring

&

control

of

project .The project performance should be measured, evaluated & corrected during the implementation phase of project by effective monitoring & controlling system. .It has to see whether the desired end results have been 4/18/12 Project Management/ Unit materialized within cost, time4747 &

10.Preparing project progress report .Project requires periodic reporting of

progress for feedback. .All activities during implementation should be documented & reported. .The project progress reports should be delivered on time to the project participants & others. .They should provide information about the following issues of the project:
4/18/12 Project Management/ Unit 4848

qPhysical targets & achievements qScheduling targets & achievements qFinancial targets & achievements qProblems encountered in project

implementation. qPossible solutions for solving the problems.

4/18/12

Project Management/ Unit

4949

The conflict environment in project

Conflict

the outcome of behavioral interactions. Where there are people, there is conflict. Conflict is inevitable. It is the result of misunderstanding among persons, groups & organizations. Perhaps there are no organizations having no conflict.
4/18/12 Project Management/ Unit 5050

is

Conflict is an important element of

the project environment. It is a way of life in project management. Generally, project conflict arises out of mutual misunderstanding in objectives, roles, values, interest or relationships. Conflicts are more common in Nepalese organizations. They are viewed as harmful, destructive & unnecessary. Nepalese managers do not believe in the necessity of conflict 4/18/12 Project Management/ Unit 5151 for improving organizational

Causes of conflict
The causes of conflict should be identified

to manage organizational conflicts. The major causes of conflicts in the project are as follows: 1. Limited resources: Conflict may arise in the project due to the limited resources like physical, economical, human, technological, informational & so-on. Competition for the attainment of such resources may create conflict. 2. Unclear relationships: Another reason of conflict creation is due to unclear 4/18/12 Project Management/ Unit 5252 relationships. Lack of clarity in authority-

3. Objective

differences: Different interpretations of objectives cause conflict. Individuals in the same group may have different objectives to cause conflict. Priorities may also differ. 4. Structural change: Change in project structure may cause conflict. Change & conflict go together. 5. Communication obstacles: It is a major source of conflicts in project. The conflict may create due to the lack of clarity in information, misunderstanding, incomplete 4/18/12 Project Management/ Unit 5353

6. Personality

clashes: Differences in values, attitudes, interest & personality cause conflict. There is involvement of different personality of project members that may be different in terms of opinion, approaches or views. As a result, personality clashes create conflict in the project. 7. Project climate: Power struggle, working condition, cooperative environment, motivation, mutual relation etc are the major climate of the project. If there is favorable organization climate, 4/18/12 Project Management/ Unit 5454

Conflict Management in Project

There

is no one best method for managing conflicts effectively in project. The conflict resolution will have a major impact on the project & organizational culture. It is certain that once the people are working together, there is always controversy, disagreement & opposition among team members. The followings are the major procedure of conflict management in the project. 4/18/12 Project Management/ Unit 5555

A. Conflict Reduction .Conflict in the project can be minimized

through effective communication system, equitable distribution of resources, clear cut goals, improved coordination etc. .Generally, conflicts can be reduced in the project by: . Better and improved coordination. . Increased resource availability. . Goal clarity. . Establishing priorities.
4/18/12 Project Management/ Unit 5656

B. Conflict Resolution: . The conflict in the project can be resolved by

adopting following methods: i. Withdrawal: The concerned party should withdraw disputes & disagreement to create the environment for the conflict to disappear. ii. Negotiation: The conflicting party should negotiate the areas of agreement & sorting out areas of disagreement to search a solution. iii. Confrontation: It involves face to face discussion & debate to find out amicable solution. It usually brings integrative 4/18/12 5757 solution. Project Management/ Unit

When to apply withdrawal Method?

When you cant win To gain time To unnerve your opponent To preserve neutrality

or

reputation When you think the problem will go away When you win by delay
4/18/12 TM 665: Project Planning Project Management/ Unit& 5858

Compromising
winners When you cant win When others are as strong as you are When you havent time to win To maintain your relationship with your opponent When you are not sure that you are 4/18/12 right TM 665: Project Planning Project Management/ Unit& 5959
When both parties need to be

Confronting
When both parties can get at least

what they want, (and maybe more!) To reduce cost To create a common power base To attack a common foe When there is enough time When there is trust When you have confidence in the others ability
4/18/12 TM 665: Project Planning Project Management/ Unit& 6060

iv. Restructuring:

The project structure & process must be restructured to resolve conflict in the project. This balances the authority-responsibility relationship in the project. v. Forcing: One party imposed the solution upon other to resolve conflict. It can be useful only if quick decisive action is of vital importance & requires protection against others. vi. Mediation: This involves the third party to bring the acceptable solution to both the party in conflict.
4/18/12 Project Management/ Unit 6161

Forcing
When you are right When a do-or-die

exists When you are stronger To gain status or power When the relationship is unimportant When a quick decision must be made
4/18/12 TM 665: Project Planning Project Management/ Unit& 6262

situation

C. Conflict stimulation: . The project manager

stimulates functional conflict & must increase such type of conflict to improve the performance. .The optimum level of conflict is essential in the project for the increment of performance in the project. .The project manager should give proper emphasis for the stimulation of conflict in the project so that the performance of the project can be 4/18/12 6363 enhanced. Project Management/ Unit

Project Procurement Management (PPM)?

Procurement means acquiring goods

and/or services from an outside source. Project Procurement Management (PPM) includes the processes necessary to purchase or acquire products, services, or results needed from outside the project teams. It includes the contract management and change control processes required to develop and administer contracts or purchase orders issued by authorized 4/18/12 Project Management/ Unit

Project Procurement Management Processes

Project

procurement management: Acquiring goods and services for a project from outside the performing organization. Processes include: Planning purchases and acquisitions: Determining what to procure, when, and how. Planning contracting: Describing requirements for the products or services desired from the procurement and identifying potential sources or sellers (contractors, suppliers, or providers who provide goods and services to other organizations). Technology 4/18/12 Information Project Management/ Unit 6565

Project Procurement Management Processes (contd)

Requesting

seller responses: Obtaining information, quotes, bids, offers, or proposals from sellers, as appropriate. Selecting sellers: Choosing from among potential suppliers through a process of evaluating potential sellers and negotiating the contract. Administering the contract: Managing the relationship with the selected seller. Closing the contract: Completing and settling each contract, including resolving any 4/18/12 Information Technology 6666 open items. Project Management/ Unit

Project Risk Assessment Risk is the potential

for unwanted happenings. Every activity involves risks. If they happen, some risks will affect the activity more than others. Risk assessment helps to identify them and consider the likelihood of them happening and their likely impact. The risks can then be managed by changing the project plans to ensure the risks are minimized.
4/18/12 Project Management/ Unit 6767

Possible risks include:

Climatic Risk rainfall Human Risk labour

strikes, beneficiaries unwilling to try new techniques, project staff leaving the organization Economic Risk crop prices being unstable Political Risk government policies Projects by other agencies not remaining on schedule.Unit 4/18/12 Project Management/ 6868

Project Risk Risk management is concerned with Management identifying risks and drawing up plans to
minimise their effect on a project. Risk identification consists of determining which risks are likely to affect the project and documenting the characteristics of each. Risk identification is not a one-time event and should be performed on a regular basis throughout the project. Risk identification should address both internal and external risks. 4/18/12 Project Management/ Unit 6969

Internal risks are things that the project

team can control or influence, such as the performance of contractors, material wastage etc. External risks are things beyond the control or influence of the project team, such as changes in the exchange rate, new government legislation, bad weather etc. A risk management plan should document the procedures that will be used to manage riskUnit throughout 7070 the 4/18/12 Project Management/

 A risk is a probability that some

adverse circumstance will occur Project risks affect schedule or resources; Product risks affect the quality or performance of the software being developed; Business risks affect the organisation developing or procuring the software.
4/18/12 Project Management/ Unit 7171

Some Examples of Risks

Risk Staff turnover Management change Hardware unavailability Requirements change Specification delays Size underestimate CASE tool underperformance Technology change Product competition Affects Project Project Project Project and product Project and product Project and product Product Business Business Description Experienced staff will leave the project before it is finished. There will be a change of organisational management with different priorities. Hardware that is essential for the project will not be delivered on schedule. There will be a larger number of changes to the requirements than anticipated. Specifications of essential interfaces are not available on schedule The size of the system has been underestimated. CASE tools which support the project do not perform as anticipated The underlying technology on which the system is built is superseded by new technology. A competitive product is marketed before the system is completed.

4/18/12

Project Management/ Unit

7272

The Risk Management Process Risk identification

risks; Risk analysis Assess the likelihood and consequences of these risks; Risk planning Draw up plans to avoid or minimise the effects of the risk; Risk monitoring Monitor the risks throughout the 4/18/12 7373 project; Project Management/ Unit
Identify project, product and business

The Risk Management Process

Risk identification Risk analysis Risk planning Risk monitoring

List of potential risks

Prioritised risk list

Risk avoidance and contingency plans

Risk assessment

4/18/12

Project Management/ Unit

7474

The project manager has to ensure

meets the of the stakeholders. This is done by good: Quality planning identifying what quality standards are relevant to the project and determining how to meet them;
4/18/12 Project Management/ Unit 7575

Projectfinal product Quality that the Management quality expectations

Quality Assurance evaluating

overall project performance on a regular basis to provide confidence that the project will satisfy the relevant quality standards; Quality control quality standards and identifying monitoring specific project results to determine if they comply with relevant ways to remove causes of poor 4/18/12 Project 7676 performance. Management/ Unit

1. What is project organization? Explain

Key Questions

the functional project organization with structure, merits & demerits. 2. Describe the matrix project organizational structure with merits & demerits. 3. What is project team building? Describe the characteristics of project team building. 4. What are the major barriers of project team development? Explain.
4/18/12 Project Management/ Unit 7777

6. Describe the factors affecting project

team building. 7. What is project implementation? Explain the procedure of project implementation in brief. 8. Explain the conflict environment in project. 9. What are the major causes that creates conflict in the project? 10.How the project manager can manage conflict in the project?
4/18/12 Project Management/ Unit 7878