The special management company manages the project

Sometimes it is more convenient for the orderer to employ a management company, which will only rule the project and will not execute any works on the project, delegating this function to the contractors.

In a special case the management company may delegate the works on project to the prime contractor, who may also have contractors. So, some functions of executing project are passed to the prime contractor, but the management company still is a head of the project, and is fully responsible to the orderer.

2.2 The internal structure of the project

This part is referred to the internal structure of the project itself, and speaks about how to build an optimal structure according to the division of labor in organization.

First of all, we would like to enter two important terms:

Vertical division of labor means the functional and administrative labor in the company.

Horizontal division of labor means the project-oriented labor in the company.

The following structures have different degree of vertical and horizontal labor, and therefore may be divided into 3 main groups:

- functional structure

- matrix structures

- project-oriented structure

In the functional structure, as it is shown in the picture, there is no horizontal division of labor, so that is just the traditional structure of the company.

As the main problem with this structure is that single processes are divided onto several parts, 2 solutions can be introduced:

- The first is implementing special employees, stakeholders, who will facilitate the interaction between different divisions

- The second is creating special project teams

Connection via stakeholders

Connection via teams

Let’s overview the main strengths and weaknesses of this structure.

Firstly, while it stimulates the professional specialization in the company, it also stimulates the functional isolation. That is why there are many conflicts between the divisions, what decreases the effectiveness in reaching the organizational goals. But, at the same time less efforts are duplicated and the efficiency of the resources usage (in the functional fields) gets higher. Also higher level of production effectiveness is observed, nevertheless it doesn’t solve cross-disciplinary problems. One of the most important points is that the employees have clear perspectives and career promotion opportunities, but if they are involved in a project, their level of motivation decreases incredibly.

Matrix structures are used for the complete integration between vertical and horizontal structures. The project-oriented structure overlays the functional one, and so the matrix appears.

Thus, matrix structures may differ in response to the degree of vertical and horizontal structures implemented in the organization. They are often distinguished according to the following criteria:

- the breadth of project manager authorities

- the amount of resources involved in the project activity

- the existence and the value of the permanent project management personnel

The weak matrix is similar to the functional structure. Every project has the only permanent personnel member – the project manager (he may be also called «project dispatcher»).

In the strong matrix structure project manager has more authorities than the functional manager. The project activities prevail over the functional.

The general pluses and minuses can be distinguished:

The main objective of the company is to complete the project successfully, so the client's interests and demands are fully performed. At the same time, conflicts between functional and project structures aren't rare. Of course, the advantages of the functional structures, as activity optimization, are retained, but it is still hard to coordinate several projects in such questions as the allocation of limited resources. As to the personnel, their anxiety about their career after finishing the project gets lower, but the division of authorities between functional and project managers makes the serious problem. In spite of this, there is an ability to flexibly adjust the organizational structure in the range from the weak to the strong matrix. Although the principle of one-man management is broken, so the employees are not sure to whom do they have to listen at first, what drives to the conflicts.

Project-oriented structure is held in case, all organizational activities are connected with executing a definite projects, reaching the special goals. Herewith, other structure elements are either missing, or just play the minor roles.

Strong and weak features of this type of organizational structure are the following:

Projects have the strong horizontal structure, which provides wide authorities of the project manager. Unfortunately, some functions are duplicated, as well as the activities, and so the efficiency of using the resource gets lower. Some managers are also likely to accumulate additional resources for their projects, which may not be used wholly. The positive thing about this structure is that every employee has only one manager, so the work is made more effective. The connection between employees and managers becomes better, but the production effectiveness level in functional areas decreases. The project structure is permanent, so after closing a project down, its resources flow to the other projects. At the same time, employees are anxious about their future career. The simplicity and adjustability may be reached, but sometimes the situation may get even worse (for example, if several projects are executed at the same time, the competition between them may happen).

Here you can see the summary table, which offers some characteristics of the organizational structures.

Nevertheless, besides these basic organizational structures two more types can be overviewed:

Divisional organizational structure may be included in the project-oriented organizational structures. Their features are:

1) Divisional OS may concentrate on reaching their aims in

- either in certain geographical area

- or in special market niche

2) Divisional OS may differentiate their activity

- with respect to the certain type of clients

- with respect to the development and promotion of the certain type of product

Mixed organizational structure is used in case the firm regularly performs projects, but only some of functional divisions are involved in these projects, while other work in their usual way.

2.3 The summary table, that shows the level of the effectiveness of using organizational structures along with the models of relationship between the participants of the project and the advisable level of activity structuring.

· The degree of regulation (quantity and specification of the rules and different procedures of execution the works and normal behavior in the company ) and the degree, in which the employees do hold to this documented regime is called the level of activity structuring.

3. Project management office

A project management office, abbreviated to PMO, is a group or department within a business, agency or enterprise that defines and maintains standards for project management within the organization. The main objectives of PMO are to standardize and introduce economies of repetition in the execution of projects. The PMO is also the source of documentation, guidance and metrics on the practice of project management and execution.

According to the PricewaterhouseCoopers survey, only one third of projects were completed on time, within budget and delivered measurable benefits. The same survey states, that using PMO was one of the top reasons of successful project execution.

What does the PMO?

- Reduces the amount of failed projects

- Improves productivity

- Increases cost savings

- Delivers projects under budget and ahead of schedule

- Allocates resources more efficiently

How the PMO can help in performing a projects?

- PMO develops and implements a consistent and standardized process

- PMO maintains a centralized office from which projects are executed

- PMO gives an opportunity to maintain project management tools for employees to use

- PMO establishes a staff of program managers who can manage few projects

- PMO also accumulates the documentation and experience of managing projects, so that they can be executed more efficient

- With PMO projects can be prioritized based on their value to the company, so that its revenue will get higher

What are the limitations of the PMO?

- An additional overhead is added, so the cost of the project can increase

- Level of bureaucracy can get higher

- Due to these two reasons the project can take longer to deliver

- Not suitable for small organizations, because of the high cost of implementing

- The project managers themselves will have less flexibility, as there is an additional control from PMO

4. Conclusion

Thus, although, we have just summarized the information about organizational project management, and we have not found new ideas or solutions, we must say, that this little review was really helpful for us, as we had an opportunity to realize the great possibilities OPM can offer.

5. References

http://www.bibliofond.ru

http://www.cio.com

http://www.claretyconsulting.com

http://www.e-biblio.ru

http://www.ecsocman.hse.ru

http://www.edu.dvgups.ru

http://www.facultyweb.kennesaw.edu

http://www.gumer.info

http://www.knowledgecentury.com

http://www.list.ly

http://www.montydogconsulting.co.uk

http://www.running-projeckt.com

http://www.pmi.org

http://www.projectmanagement.com

http://www.studopedia.org

http://www.wikipedia.org

Date: 2015-12-17; view: 651