Project Oriented Organization

MEANING

• Speed and market responsiveness• First – to – market powerful competitive

advantage• Development of new products, process from

diverse areas of specialized knowledge• Rapid expansion of technological possibilities

Project organizational structures

• Traditional functional organization• Functional project organization• Pure project organization• Matrix project organization

Functional Project Organization

• Project organized and controlled within a functional unit or department

• Usually for smaller projects with a narrower focus• Individual experts can be utilized by many

different projects• Specialized in the division can be grouped to

share knowledge and experience.

Traditional Functional OrganizationCompany President

MarketingVice President

ManufacturingVice President

ProcurementVice President

CustomerService

Manager

EngineeringVice President

DomesticSales

Manager

InternationalSales

Manager

SystemsEngineering

Manager

ElectronicsEngineering

Manager

SoftwareEngineering

Manager

MechanicalEngineering

Manager

FabricationManager

AssemblyManager

TestingManager

ProductionSchedulingManager

PurchasingManager

Receiving &InspectionManager

TechnicalDocumentation

Manager

ShippingManager

Finance &AdministrationVice President

HumanResources

Vice President

Functional Project OrganizationCompany President

MarketingVice President

ManufacturingVice President

ProcurementVice President

CustomerService

Manager

EngineeringVice President

DomesticSales

Manager

InternationalSales

Manager

SystemsEngineering

Manager

ElectronicsEngineering

Manager

SoftwareEngineering

Manager

EngineeringProject A

FabricationManager

AssemblyManager

TestingManager

ShippingManager

PurchasingManager

Receiving &InspectionManager

EngineeringProject B

ManufacturingProject 1

Finance &AdministrationVice President

HumanResources

Vice President

Pure Project Organization

• Each project is organized as a separate division reporting to senior management

• Effective for large projects, not small. • Each project owns its resources/personnel• Authority is centralized, ability to make swift

decisions is greatly enhanced.• Structurally simple and flexible• Relatively easy to understand

Pure Project Organization

CompanyPresident

Project AProject Manager

Project BProject Manager

MarketingVice President

HumanResources

Vice President

Finance &AdministrationVice President

LegalVice President

EngineeringManager

ManufacturingManager

ProcurementManager

Consultants

EngineeringManager

ManufacturingManager

ProcurementManager

Subcontractors

Matrix Project Organization

• Most common organizational structure• Has many advantages of functional project and pure

project structures• Project team members have two bosses• Team members may be assigned part-time to project

and may have less loyalty to the project

President

ProgramManager

Manufacturing Marketing Finance R & D Personnel

Project 1

Project 2

Project 3

3

1

0

1 1/2

4

1/2

1/2

1/4

3

4

1 1/2

1/2

1/2

1/4

1

Matrix Project Organization

PROJECT FORMULATION

DEFINITION

• It is a process by which one obtains a complete picture about project without really arriving at a detailed feasibility study.

• The information collected through this approach can be used for preliminary evaluation and screening of projects

Purpose of Project Formulation

• Clearly defined plans• Joint decision making consultation with parties• Stress importance of project to organization goals• Developing detailed administrative procedures to

be followed in conduct of project• Develop statement of understanding or charter.

STEPS OF PROJECT FORMULATIONProject formulation

Opportunity studies/support studies

Identification of product/service

Pre-feasibility study

Feasibility study(Techno-economic feasibility)

Project appraisal

Detailed project report

Project Feasibility Study focus on

• Economic and Market Analysis• Technical Analysis• Market Analysis• Financial Analysis• Economic Benefits• Project Risk and Uncertainty• Management Aspects

Market Analysis

• Identification of existing needs/ latest needs• Product life cycle• Market outlook• Competition• Government policies – taxes etc.,• Socio economic factors• Customer profile

Technical Analysis

• Encompasses available alternative technologies

• Selection of the most appropriate technology• Implications of the acquisition of technology• Contractual aspects of licensing

Financial Analysis

• Examines the viability of the project both in financial or commercial considerations

• Also indicates the return on the investments

Risk and Uncertainty

• Technical – Relates to project scope– Change in technology– Quality and quantity of inputs

• Economical– Pertains to market– Cost– Competitive environment– Change in policy– Exchange rate

Economic Benefits

• Employment generation• Economic development of the area where the

project is located, • Foreign exchange savings in case of import

and export substitutes

Management Aspects

• Cover the background of promoters• Management philosophy• Organization set up • Staffing for project implementation phase as• Aspects of Decentralization and delegation,• Systems and procedures• Method of execution

Project Appraisal

• Process of critical examination and analysis of the proposal in total.

• In this phase compilation of additional information and further analysis of project dimensions are undertaken

• At the end of this phase appraisal note is prepared for facilitating decision on the project implementation.

PROJECT TEAM

• Members usually belong to different groups, functions and are assigned to activities for the same project

• Interdependent collection of individuals who work together towards a common goal

• Who share responsibility for specific outcomes of their organizations

• Their commitment can change throughout the project depending on the project development stage.

Characteristics of Project team

• A clear, elevating goal• Competent members• Standards of excellence• Team goals are clearly understood by all• Each team member trusts the judgment of

others• The team has to be willing to take risks• Principled leadership

Project Team Models• Traditional Model

– Group of people with a traditional boss• Team Spirit Model

– Group of people who are working for one boss• Cutting Edge Model

– Group of people who are managing themselves• Task Force Model

– Group that comes together for a specific time only• Cyber Team

– Members see one another rarely or even, not at all

Importance of building teams

• Improve the relations and strengthen the bond among the employees.

• Reduce the chances of confusions, misunderstandings and in a way making the communication effective

• Individuals feel more positive and confident at work

Importance of building teams

• Tasks are accomplished at a faster pace when it is done by a team rather than an individual

• Team work is also important to improve the relations among the employees

• Work never suffers or takes a backseat in a team.

Qualities of good project team member

• Must not enter his office with a mind clouded with negative thoughts.

• Accept the responsibilities only if he/she have interest in the same

• A team member must avoid playing blame games or dirty politics at the workplace

• Develop the habit of using planners and organizers at work to set reminders against the desired date and time

• Adopt a friendly attitude at work. • Be a good communicator

Types of Teams

• Interdependent Teams• Self-Managed Teams• Project Teams• Cross-Functional Teams• Advisory Teams• Independent Teams• Work Teams

Stages of Team Development

• Forming– Involves getting to know the various members of

the team.– Team members can identify each others strengths

and weaknesses within the team itself• Storming

– Individuals within the team will work together in order to maintain control

– Team members may compete for control of the group

• Norming– Working towards meeting their goal– Give and receive feedback– Trust develops within the team

• Performing– Make progress towards achieving the teams overall

goal– Feedback should enable constructive changes to take

place– The team should constantly be improving whilst goals

are being achieved

Barriers of Project Team• Communication Barrier

– Lack of concentration and/or interest– Distractions present

• Physical Barriers

– Lack of equipment– Staff shortages – less members of the team present– Poor lighting– Room temperature not suitable