ORGANIZING AND STAFFING

ME751 - ELECTIVE
PROJECT MANAGEMENT
CHAPTER 3
 Organization
 Definition Organization: A set of organizational units and
their different relationships with each other.
 Organizational units can be organized according to many
different categories, for example by function or by project
type. Typical examples of organizational units:
 Functional organization: Research, Development, Marketing, Sales
 Project organization: Project 1, Project 2, ….
 A organization usually has 3 different types of relationships
between organizational units.
 Reporting structure: To report status information
 Decision structure: To propagating decisions
 Communication structure: To exchange of information
 Organizational Structures
 Types of Organization
 Functional organization
 Project-based organization
 Matrix organization
 Parameters for each organization type
 Organizational Unit
 Key players
 Roles and Responsibilities
 Structure: Information flow between roles
 Benefits and Challenges (“pros and cons”)
 Groups, Teams and Committees
 Group: A set of people who are assigned to a common
task and who work individually to accomplish their
assignment.
 Team: A small group of people working on the same
problem or sub-problem in a project. The team
members depend on one another to do their tasks.
 Project Team: Based on the premise that every member can
and must make a valuable contribution to the project.
 Committee: Comprised of people who come together
to review and critique issues, propose
recommendations for action.
 The Project Team
• A “Project Team” is a group of people with
complimentary skills who contribute towards
the accomplishment of Project Goals and do
so, with absolute harmony that brings about a
lot of personal satisfaction.
Key Roles in Project Organizations
 Project Manager: The person ultimately
responsible for the successful completion of the
project
 Project Team Member: Participants who are
responsible for performing individual activities
and tasks (in a project or matrix organization)
 Functional Manager: The team member‘s
supervisor in the department (in a functional
organization)
 Upper management: People in charge of the
departments or projects
 Main Functions of a Project Manager
 Define scope of project
 Identify stakeholders & Leadership (decision
makers: Client, Parent organization, Project Team,
Publics)
 Evaluate project requirements
 Develop detailed task list (work breakdown,
structures)
 Develop initial project management flow chart
 Estimate time requirements
 Identify cost estimation and budget
 Identify required resources and evaluate risks
 Main Functions of a Project Manager (Cont..)

 Prepare contingency plan

 Identify interdependencies
 Identify and track critical milestones
 Secure needed resources, manpower
 Participate in project phase review
 Manage the change control process
 Report project status
 Responsibilities of the Project
Manager
 Determine objectives, schedule and resource budgets
 Design a software project management plan (SPMP)
 Create and sustain focused and motivated teams
 Determine the team‘s work procedures, reporting systems and
communication infrastructure.
 Accomplish project objective within time and budget
 Monitor performance against the plan
 Resolve technical conflicts and interpersonal conflicts
 Control changes in the project
 Report on project activities to upper management
 Keep the client informed and committed
 Contribute to the team members performance approval
 General Responsibilities of Team
Members
• Technical responsibilities:
– Perform assigned tasks within time and budget
– Acquire technical skills and knowledge needed to
perform the work
• People responsibilities:
– Identify situations and problems that might affect
your team members‘s tasks
– Keep your team members informed of your
progress and problems you encounter
 Skills and Abilities of a
PROJCET MANAGER
• Knowledge: Must be well versed with project
management. ?
• Performance: Application of project management
knowledge
• Personal: Behavior of the project manager:
– Effectiveness
– Attitude
– Personality characteristics (Michael Dell)
– Leadership, guidance to balance project constraints
 PROJECT ORGANIIZATION
“A Project Organization is a structure in which
the various positions assigned with
responsibilities, authority and accountability
are arranged in order to effectively meet the
project objectives of time, cost and
specifications.”
TYPES OF PROJECT ORGANIZATION
Functional organization
Project-based organization
Matrix organization
 Functional Organization
Definition:
In a functional organization
participants are grouped into so-
called departments, each of which
addresses a function.
 Key Features of Functional
Organization
Projects are usually pipelined through the
departments of a functional organization. The
project starts in research, then it moves to
development, then it moves to production, ….
Only a few participants are involved in the
complete project.
Separate departments often address the same
cross-functional needs (Examples: configuration
management, IT infrastructure)
 Examples of Departments

Traditional businesses: Research, development,

production, sales, finance.
In software companies the departments correspond
to the activities in the software process: Analysis,
design, integration, testing departments.
Example of a Functional Organization
 Merits and Demerits of Functional
Organizations
Merits
 Members of a department have
a good understanding of the
functional area they support.
 Departments don‘t compete
with another to get the support
of their support teams
Demerits
 Because each department has its
own support team, different work
procedures and reporting systems
are the rule.
 It is difficult to make major
investments in equipment and
facilities.
 Example: Two departments with a
budget of 50,000 Euro each need a
printer that costs 100,000 Euro.
 Both need only 50% of the maximum
capacity.
 Neither department can buy it, because
they don‘t have sufficient funds.
 High chance for overlap or
duplication of work among
departments
 When to use a Functional
Organization?
• Projects with high degree of certainty, stability,
uniformity and repetition.
– Requires little communication
– Role definitions are clear
• When?
– The more people on the project, the more need for a
formal structure
– Customer might insist that the test team be
independent from the design team
– Project manager insists on a previously successful
structure
 Project Organization

In a Project Organization participants are

grouped into projects, each of which has a
problem to be solved within time and budget.
Key Features of Project Organization

– Teams are assembled for a project as it is

created. Each project has a project leader.
– All participants are involved in the complete
project.
– Teams are disassembled when the project
terminates
 Merits and Demerits of Project
Organizations
Merits
 Very responsive to new project
requests (because the project is
newly established and can be
tailored around the problem)
 New people can be
hired/selected who are very
familiar with the problem or
who have special capabilities.
 There is no waste of staff
workload
Demerits
 Teams cannot be assembled
rapidly. Often it is difficult to
manage the staffing/hiring
process.
 Because there are „no
predefined lines“, roles and
responsibilities need to be
defined at the beginning of the
project
 Matrix Organization
• In a matrix organization, participants from
different departments of the functional
organizastion are assigned to work on projects
as they are created.
• The project manager and team members may
be assigned to the project for <= 100 % of
their time
 Merits and Demeritsof Matrix
Organizations
Merits Demerits
– Teams for projects can be – Team members usually are
assembled rapidly not familiar with each
– Scarce expertise can be – Team member have different
applied to different projects working styles
as needed – Team members must get
– Consistent work and used to each other
reporting procedures can be
used for projects of the same
type.
 New Challenges in Matrix
Organizations
 Team members must respond to two different bosses with different focus:
 Focus of the functional manager: Assignments to different projects,
performance appraisal
 Focus of the project manager: Work assignments, project team support
 Team members working on multiple projects have competing demands for
their time
 Team members working on more than one project have even more project
members to report to
 Some people who have claim on the team member‘s time may be at similar
levels in the organization‘s hierarchy
 Multiple work procedures and reporting systems are used by different
team members
 Development of common procedures needs to be addressed at project kickoff
time
 When to Use a Project or Matrix
Organization?
• Project with degree of uncertainty
– Open communication needed among members
– Roles are defined on project basis
• When?
– Requirements change during development
– New technology develops during project
 ACCOUNTABILITY IN PROJECT
EXECUTION
• Closely related with Delegation of Authority.
• Person vested or delegated with Authority is
also accountable for not achieving the results.
• Person with authority to take decisions is also
accountable or answerable for not achieving
the required progress in the project.
• Authority that accompanies responsibility is
tied up with accontability.
 CONTRACTS IN PROJECT
MANAGEMENT
• A ‘CONTRACT’ is an agreement between two
or more parties in writing, to do or not to do
certain things.
• Business contracts are those agreements
enforceable at law.
• A Consideration, in the context of a Business
Contract, is made in return for a specific
promise contained in the offer of the
promisor.
 3 ‘R’s of Contracting
• Contracting, whether it is for a consideration or
otherwise is an essential arrangement for getting
work done in an environment where authority
relationship and responsibility delineations are
unclear or non-existent.
• Contracting itself can be found to constitute the 3
‘R’s:
1. Responsibility
2. Reimbursement and
3. Risk
 Types of Contracts
1. The Turn-Key Contracts
2. Work Packages
 Contract Planning
Factors that decide the Number of Contracts:
1. Speciality of the Works
2. Location of the Work Site
3. Value of the Contract
4. Availability of Contractors
5. Need to accommodate local contractors
6. Need to obtain performance gaurantee for a system from a single
party.
7. Concern for early completion
8. Concern for completion at Minimum Cost.
9. Concern for top quality
10. Current workload of the contractors and capability of the
contractors
11. Time schedule of the work
12. Political pressure
 General Conditions of Contract
(GCC)
1. Definition of terms 14. Variation in Scope
2. Contractor to inform himself fully 15. Underground Works
3. Security for due performance 16. Contractor’s Default
4. Expenses of agreement 17. Bankruptcy
5. Drawings 18. Inspection
6. Mistakes in Information 19. Delivery
7. Assignment 20. Access to and possession of site
8. Sub-letting 21. Vesting of Plant and contractor’s
9. Patent Rights equipment
10. Manner of execution 22. Engineer’s Supervision
11. Contractor’s equipment, labor, etc. 23. Engineer’s Representative
12. Electricity Water and Gas 24. Clerk of Works
13. Lifting Equipment 25. Engineer’s Decision
 TENDERING
• A Tender is defined as an offer to carry out certain
work or supply certain material or services in
accordance with clearly detailed descriptions and
conditions.
• The tendering procedure deals with pre-qualification
of contractors, preparation of tender documents,
mode of floatation of enquiry, receipt of tender,
guidelines for evaluation of tenders and selection of
contractor.
 Prequalification of Contractors
The Purchase Authority or Engineer would normally
select and shortlist a contractor if:
1. He has similar earlier experience and his performance reports are
satisfactory.
2. His past turnover and present financial commitments indicate no
constraint on fund availability for execution of the proposed
contract.
3. He has necessary infrastructure, adequate technical manpower,
construction equipment and his present commitment would not
prevent him from executing the proposed assignment.
4. His credibility in terms of his associates and associations with other
agencies including foreign agencies, job performance and
relationships with customers are sound.
Preparation of Tender Documents
A good Tender Document will include the following:
1. Letter of Invitation to tender
2. Instructions to tenderers
3. General Conditions of Contract
4. Technical Specifications
5. Special conditions of Contract
6. Scope drawings
7. Bill of Quantities (BOQ)
8. General Information about the site
9. Form of Tender
 Evaluation of Tenders
Tenders receive will be evaluated from the
following angles:
1. Technical Bid
2. Commercial or Financial Bid
3. Contractual Obligations and
4. Managerial Capabilities
An adjusted contract price will be arrive at in
each case and the lowest bidder who is also
technically and managerially acceptable is
awarded the contract.
 SELECTION OF CONTRACTORS
A Contractor who has proved his worth and
capability in terms of Technical, Managerial,
Contractual and Commercial conditions and
yet has given the least quote commercially is
selected and a issued with a Work Order after
complying with other formalities like
executing an Agreement.