International project management
tapaswini
Chapter6IPM.pdf
ORGANIZING THE INTERNATIONAL PROJECT
Chapter 6
THE CHALLENGE OF ORGANIZING AN INTERNATIONAL PROJECT
Purpose of organizing international projects:
Reducing complexity by simplification of structure and organizational design.
Forms of organizing an international project:
Functional structure.
‘Projectized’ structure.
Matrix structure.
Virtual structure.
‘Organizing the project’ is a set of activities that have to be finished in the planning phase of the project.
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SELECTION OF SUITABLE PROJECT STRUCTURE
The following factors need to be considered with regard to the selection of the most suitable project structure:
Size and duration of project.
Strategic importance of project.
Novelty and need for innovation.
Need for integration.
Environmental complexity.
Budget and time constraints.
Project location.
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Chief Executive
Head of Production Head of MarketingHead of R&D
Functional
Manager
Functional
Manager
Functional
Manager
Functional
Manager
Functional
Manager
Functional
Manager
Functional
Manager
Project
Project coordination 4
Example of a functional
project structure
Chief Executive
Head of Production Head of MarketingHead of R&D
Functional
Manager
Functional
Manager
Functional
Manager
Functional
Manager
Functional
Manager
Functional
Manager
Functional
Manager
Project Manager
PM Team
Member
PM Team
Member
PM Team
Member
Project
Team
Member
5
Example of a ‘projectized’ structure
Chief Executive
Engineer-
ing Finance Marketing
Human
Resources Others
Consul-
tants Suppliers
Project 1
Operations Controlling
Project 2
Project 3
Project
Manager
F u
n c
ti o
n a
l re
s p
o n
s ib
il it
y
Project responsibility
6
Example of a matrix structure
CULTURAL IMPACT ON PROJECT ORGANIZATION (1)
Organizational structures have the following purposes:
Help accomplish project goals.
Provide project members with a frame of orientation, hierarchies, and reporting lines.
Structures satisfy needs of belonging and esteem. Those can differ between individuals, but also between national cultures.
Keep in mind the cultural embeddedness of matrix structures and responsibility charts, both based on:
Low power distance.
Low uncertainty avoidance.
Individualism.
Strong task orientation.
Strong achievement orientation.
Sequential way of working.
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Individuals from equality-oriented cultures tend to
prefer flat and lean organizational structures. People
from hierarchy-oriented cultures tend to favour
pyramid-like tall organizations with a high degree of
formalization and centralization.
Equality Hierarchy
Individuals from group-oriented cultures tend to work
better in permanent functional organizational
structures because of the continuity to work in the
same group. People from individualistic cultures tend
to welcome temporary organizational structures like
projects.
Individual Group
Individuals from cultures with high uncertainty
avoidance tend to welcome structure as an
orientation frame. They tend to accept precise
guidelines for co-ordination and rules. People from
low uncertainty cultures tend to feel at ease with
matrix organizations offering more flexibility, but also
ambiguity.
Embracing
risk Avoiding risk
Individuals from status-oriented cultures tend to see
and use an organizational structure to show and
increase their personal standing. Tall organizations
with many hierarchy levels are preferred because
they offer good opportunities to be perceived as
important. In achievement-oriented cultures,
structures tend to be tailored to suit best
organizational objectives.
Achievement Standing /
status
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Cultural impact on project organization (2)
INTERNAL AND EXTERNAL CO-ORDINATION OF AN INTERNATIONAL PROJECT
Means of internal project co-ordination:
Project office.
Steering committee.
Project champion.
War room.
Dual leadership.
Minimization of interfaces and communication nodes.
Means of external project co-ordination:
Systematic stakeholder management (see Ch. 3).
Contracts Fixed price contracts.
Cost reimbursement contracts.
Incentive contracts.
Informal means Institutionalized high-level meetings.
Continuity in personal relations.
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Project Manager
Quality Assurance
Controlling
Human Resource/
Change Management
Administration
Engineering Assembly Logistics Process
Reengineering
Software
Development
Manufacturing
Procurement
Project Management
Project Realisation (depending on the nature of the project)
Project Office
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Example of a mechanism for internal co-ordination:
The Project Office
Firm Fixed Price
(FFP)
Cost Reimburse-
ment
Cost Plus Fixed
Fee (CPFF)
Incentive
Contracting
high
low high
Involvement
of customer
Degree of risk for customer
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Contracts as special forms of external co-
ordination
CONTRACTS IN INTERNATIONAL PROJECTS
It is recommended to use industry-wide global standards if available.
A good starting point is the United Nations Commission on International Trade Law (UNCITRAL).
It is also recommended to refer to INCOTERMS as a common language and reference frame in order to reduce misunderstandings.
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PARTICULARITIES OF ORGANIZING INTERNATIONAL PROJECTS
Size of team:
Due to the high heterogeneity of teams in international projects, bigger teams are more difficult to manage than smaller teams.
10 team members are considered as a suitable size (although this depends on the nature of the project).
Measures to keep teams small:
Have several sub-projects.
Create a core team and an extended team.
Define team external contributions and outsource them.
Keep team members only for specific project phases.
Using structure to overcome language and cultural barriers.
Benefit from similarities in educational background and functional language.
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LINKING STRUCTURES, TASKS, AND PEOPLE
The structures provide the frame of co-ordinating the activities of project members and stakeholders.
The Work Breakdown Structure contains all activities the project members need to carry out in order to obtain the project result.
The responsibility chart of responsibility matrix combines structures, activities, and people:
On the vertical line, there are the activities taken from the WBS.
On the horizontal line, there are the roles existing in a project. Basic roles can be summarized by the RASIC system as illustrated on the next slide.
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esponsible
pproval
upport
nformed
onsulted
R
C
A
S
I
Responsibility
for work
Responsibilities
for management
Responsibilities
for communication
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R I A
R S A
R C A
R C A
R C A
R A
R A
R A
R S A
R A
R A
I R A
C R A
R A
S R A
Assembly Function Tests
Generation of working plans
Material ordering process
Functions/Roles
Logistics
Manufacturing
Packaging
Returned Goods
Documentation - export
Specification and validation of packaging
S u b -P
ro je
c t
M g r
B
Change Mgmt Assembly Drawings
Assembly Facility Layout
Goods Receipt
Warehouse Layout
Commissioning
Interim Storage
Dangerous Goods
Commodity Codes
M a rk
e ti n g
P ro
c u re
m e n t
S Q
P ro
c u re
m e n t
P Q
A
R &
D T
D
L e g a l A
ff a ir s
S u b -P
ro je
c t
M g r
A
L o g is
ti c s G
R
P ro
je c t
M a n a g e r
S a le
s
Project: Production Transfer to China
PROJECT RESPONSIBILITY CHART
Sub-Project Description of work packages
R &
D M
a te
ri a
l
P ro
d u c ti o n Q
A
P ro
d u c ti o n A
s s e m
b ly
16
Example of a responsibility matrix
