PM-502, Management Characteristics of Successful Project Managers
A. Session No: 3, Part One		B. Short Title: Designing Organizational Structures

C.  Learning Objectives: The students will learn the principles necessary to design and modify and organization through the phases of a project.
D.  Reading Assignment: Verma, Chapter Three
E. Session Description: Designing an organization is the process of selecting a structure and the formal systems of communication, division of labor, coordination, control, authority and responsibility necessary to achieve organization (or project) goals.

F. Point One: 
a) Question: What project function determines the tasks or activities to be performed, the jobs or positions required to complete the tasks, the resources (human and other) needed to accomplish the tasks and to meet the project organizational objectives?
b) Key Point: Organizing is directly related to and interdependent on planning and therefore should be integrated at the front end planning phase of the project.
c) Instructor Notes: 
1) Organizational structure - the pattern of formal relationships that exist among project teams and team members in an organization.
2) Importance of organizing - only thru this mechanism do project managers implement their plans.
a) Which resources to use
b) When and where to use them
c) How to use them
d) Avoid duplication and idle resources
3) The Organizing Process - Establishes orderly, efficient and efective uses of project resources and is used to establish and maintain relationships.  The seven step of the organizing process are:
a) Review project goals and develop conceptual planning.
b) Establish major tasks required to reach planned goals.  (This established an important link between planning and organizing.  Establishes the relationship between the WBS and OBS).
c) Subdivide major tasks into sub-task activities.
d) Assign specific responsibilities to individuals.
e) Provide the necessary resources (given the appropriate level of authority, responsibility and training, along with adequate time, money, materials, personnel and/or information)
f) Design the appropriate organizational relationships and hierarchy necessary to complete the tasks.
g) Evaluate results of organizational strategy.  (Gather feedback, collect information, analyze data, make adjustments).
4) The organizing subsystems - provides a rational and efficient approach to using organizational resources.
a) A subsystem of the overall management system.
b) One of the key functions of the project manager.

G. Point Two:
a) Question: What are the classical organizational principles used in traditional management?
b) Key Point: The project manager needs a basic understanding of traditional organizing principles developed by research scholars and management practitioners.
c) Instructor Notes:
1) Unity of Command: No one in the project organization should have more than two bosses (What about the weak matrix organization?)
2) Parity in authority and responsibility - A person responsible for doing a certain task must be given sufficient authority to either do it or get it done by others.
3) Scaler principle - A clear unbroken line of authority should run from top to bottom, communications and information flow across.
4) The span of management - The number of subordinates that report directly to a manager - horizontal span of control, not depth of control.
5) Flexibility - Capability to react to change as project progresses, resilience and adaptability.

6) Division of labor - Decided after developing the Work Breakdown Structure.
a) Advantages - increased skill and efficiency.
b) Disadvantages - human aspects of coordination, authority and responsibility.
7) Departmentation - Grouping functions or major work activities.
a) Function (Engineering, manufacturing, marketing, sciences)
b) Product or service
c) Customer
d) Territory
e) Manufacturing process
f) Project	

H. Point Three:
a) Question: What are the fundamental dimensions or organizational structure? 
b) Key Point: Before designing a project organizational structure, it is important to understnd the project’s dimensions along with the roles and relationships of participants.  The structure of an organization can be analyzed along the following dimensions:
c) Instructor Notes: 
1) Formalization - Written policies, procedures, rules, and job descriptions which guide behavior of personnel.
2) Centralization - How much authority is held at various levels in the organizational hierarchy.
3) Complexity - The number of distinctly different jobs titles and departments in the project organization.
4) Specialization - Breaking a complex task into simple functional parts - project teams focus on specific parts.
5) Project manager’s role - Design substitutes for unnecessary and ineffective hierarchy so that functional activities can be delegated to appropriate team members - to challenge them and give them an opportunity to advance.  

I. Point Four:
a) Question: What are the basic factors to consider in organizing a project?
b) Key Point: The basic question with regard to any work organization are:
		- What are the critical requirements of the technology?
   		- What are the characteristics of the human system?
The challenge lies in matching people and technology.
c) Instructor Notes: 
1) The organizational design of a project is critical to its successful management.  Environmental forces, strategic forces, and technological factors can influence this design.
2) Environmental forces - assess the characteristics of the present and future environments and the demands of those environments on the need to: process information; cope with uncertainty; achieve levels of differentiation; and, integration.
Factors	Simple Variables	Organizational Design Guidelines	
Environmental Forces	  Degree of complexits
  Degree of dynacism	Analyze the outcomes and acquire skills needed.  (Matrix structure may be effective to deal with varying degrees of uncertainty.)	
Strategic Choices	  Top management philosophy
  Types of customers
  Geographic areas served.	Emphasize comfort level of top management to meed customer and operational needs.  (Traditional functional with ability to respond to market conditions.)	
Technological Factors	  Work flow uncertainty
  Task uncertainty
  Task interdependence	Analyze and evaluate uncertainty in task and work flow.  (Task force or matrix structure may be effective.)	

a) The complexity dimension - few versus many, homogeneous versus heterogeneous
b) The dynacism dimension - high tech = unstable and changing; low-tech = relatively stable
		c) Task risk levels - low to high risk

Complexity and dynacism
High	Moderate-High	
  Many and continually changing
  Sophisticated problem solving skills	  Few but constantly changing
  Higher level of skills	
Moderate	Low	
  Many but few changes
  Higher level of skills	  Few and unchanging
  Minimal level of skills and training	

3) Strategic choices - top management choices can affect organizational design of projects.
a) Values and philosophy - affect project controls and degree of decentralization.
		b) Type of client - few or many markets, public or private clients.
		c) Where to market - regional, national, international.
4) Technological factors - 
	a) Work flow uncertainty - degree of knowledge about when inputs will be received for processing.
	b) Task uncertainty - extent of a project unit’s knowledge about how to perform the tasks assigned to it.
c) Task interdependence - the degree of interdependency between the tasks of various units.
1) Pooled - each project unit is autonomous
			2) Sequential - some level of overlap of tasks
			3) Reciprocal - many feedback loops required.

 J. Point Five:
a) Question: What key element must a project manager successfully accomplish at the beginning of each phase of a project:
b) Key Point: The project manager must organize the resources necessary to complete the project objectives in a manner that insures success, analyzing and considering many factors.
c) Instructor Notes: 1) Determine the major tasks to be performed;
2) Determine the jobs or positions required;
		3) The resources needed to accomplish the tasks.