People and Organization (P&O)

Vignesh Sivadass

MANG6311-Week6-GovernanceinPM-09Nov21-Bb.pdf

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Week 6

Governance in PM: Do we have seats for all?!

Dr Ramesh Vahidi [email protected]

09 Nov 2021

Southampton

Business School

MANG6311 Project Management

People & Organizations

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How will you connect with stakeholders?

How will you define your working relations with stakeholders?

Reminder from Stakeholder Management Lectures

Learning Outcomes (LOs)

• Identify and define roles and responsibilities of the main project participants.

• Understand concept of Governance, relations between project governance and corporate governance and stakeholder management/collaboration.

• Recognize the main organizational structures, Compare and contrast roles and authorities in each and their strengths and weaknesses.

* You should demonstrate an ability to identify and define the above LOs in a given case study and within a small team you work with where appropriate.

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1) Could you name some of the

roles and responsibilities within

a project?

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Project Roles and Responsibilities - 1

Project Board Steering Committee

Project Sponsor

Project Champion Project Manager, Project

team

Project End users E.g.: IT project

E.g.: Hong Kong Underground

Project Leader

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Fargo Food Case Study: Roles and Responsibilities

Which one of these roles could you spot in this case?

** Look at the Blackboard for the exercise material.

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Project Governance/ Project Organisation Structure/Chart

Project Organization

“The management structure applicable to the

project, programme ... and the organisational

environment within which it [project or

programme] operates.” (APM, 2012, 240)

Project Governance “Involves a set of relationships between the project’s management, its sponsor (or executive board), its owner, and other stakeholders”.

Ensures project objectives are set, provides means of achieving them and monitors their achievement. (Turner, 2009, pp.311-2)

+ (potentially) other main stakeholders Responsibility, Accountability, Consulted,

Informed, Reporting, Delegation

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Project Governance/ Project Organisation Structure/Chart

+ (potentially) other main stakeholders

Governance (additional definition)

The framework of authority and

accountability that defines and controls the

outputs, outcomes and benefits from projects,

programmes and portfolios. The mechanism

whereby the investing organisation exerts

financial and technical control over the

deployment of the work and the realisation of

value. (APM BoK, 2019, p.212)

https://www.apm.org.uk/resources/what-is-project-management/what-is-governance/

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Corporate/Organisation Structure/Chart

Project Organisation Structure/Chart

“Involves a set of relationships between a company’s management, its Board (or management team), its shareholders, and other stakeholders”.

Ensures company objectives are set, provides means of achieving them and monitors their achievement. (Turner, 2009, pp.311-2)

Corporate or Organization Governance

Interchangeable terms for our purposes: Corporate = Organization = Parent Org.

Responsibility, Accountability, Consulted, Informed, Reporting, Delegation

Demonstrating Organization/Project Structures

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Department, Individual, committee, board, etc.

Direct working relation, reporting, responsibility

Indirect or weak relation with some levels of accountability or responsibility

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Layers of Project/Organization/Corporate Structures & Hierarchies and …

2) What could make the

project's governance more

effective and successful in your

opinion?

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Layers of Project/Organization/Corporate Structures & Hierarchies and Alignment

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Clarity & Transparenc

Engagement of relevant stakes at

appropriate levels

Aligned with

Corporate Gov. &

Business Strategies

Clear lines of reporting & escalation

Clear Performance

Criteria

Clear decision making,

control & authority

‘Good’ Project Governance

(Muller, 2017)

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Fargo Food Case: Project/Corporate Governance Alignment

- Could you reflect on the alignment between

company’s governance and structure and projects'

governance and structure?

- Any issues?!

** Look at the Blackboard for the exercise material.

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02/10/17

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3. Have you worked

before starting your PM

MSc?

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“Typical Project/Organization

Structures”

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Three Types of Project/Organization Structure

1) Functional Organization Structures

Chief Executi

VP of Projects

VP of Marketin

VP of Productio

VP of Finance

VP of Research

2) Project (Projectised or Product) Organisation

Structure

3) Matrix Organization Structure

Tip: combination possible

Projects are temporary Orgs.

“Relation between Projects and their teams with the organization they belong to” (RV)

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Finance Dept. Marketing Dept.

Research and Development Dept.

Customer Services Dept.

Human Resources Dept.

Procurement Dept.

PROJ A PROJ A1 PROJ B PROJ C PROJ D

PROJ E

PROJ J PROJ K

PROJ F PROJ G PROJ H PROJ I

CEO, Managing Director and Board of the Organization

PROJ 1 PROJ 2 PROJ 3

PROJ E1

PROJ E2

PROJ A2

PROJ E3

Organisation with Functional Structure Example 1

Chief Executive

VP of Marketing VP of

Procurement VP of Finance VP of Research

Pinto (2007, p.47) 21

VP: Vice President

 Market Research

 Sales

 After-market Support

 Advertising

 Logistics

 Outsourcing

 Distribution

 Warehousing

 Manufacturing

 Accounting Services

 Contracting

 Investments

 Employee Benefits

 New Product

Development

 Testing

 Research Labs

 Quality

Board of Directors - Main components:

Functional deps. - Departments (depts):

similar activities or disciplines.

- Projects done in one dept.

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Organisation with Functional Structure Example 2

Director

Marketing Manager

Financial Manager

Manufacturing Manager

Research & Development

Manager

Human Resources Manager

Operative Operative Operative

Materials Manager

Production Manager

Team Leader

Team LeaderExtracted and

extended from: Gardiner (2005)

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PM within Functional Organization Structures

Strengths Weaknesses

1. Firm’s design maintained

2. Fosters development of in-depth knowledge

3. Standard career paths

4. Project team members remain connected with their functional group

5. Investment in functional technologies

1. Cross-functional communication & coordination issues

2. Lack of customer focus/slow response to customer

3. Projects may take longer & sub- optimized

4. More committed to functions than projects

5. Slow decision making

6. Low priority for genuine projects

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Silo Effect

- Project done in one dept.

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Finance Dept.

Marketing Dept.

Research and Development Dept.

Customer Services

Dept.

Procurement Dept.

PROJ A PROJ B1 PROJ B2 PROJ B3

PROJ C

CEO, Managing Director and Board of the Organization

PROJ 1 PROJ 2 PROJ 3

PROJ B

PROJ D

PROJ C1 PROJ C2

Other Departments …

Organisation with Project (Projectised/Product) Structure - Example 1

Director

Project/Product A Project/Product B Project/Product C

Engineering Manager

Marketing Manager

Development Manager

Gardiner (2005, p.129) 25

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(Boeing or Airbus, Software or

auto manufacturing

companies)

- Nature of main assignments: temporary.

Main Component

Supporting: Functions

PM within Project Organization Structures - Example 2

Chief Executive

VP of Projects

VP of Marketing

VP of Production

VP of Finance

VP of Research

Pinto (2007, p.50) 26

(VP: Vice President)

Board of Directors

Project

Alpha

Project

Beta

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4. Could you suggest

disadvantages of

Projectised/Product

Structures?

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Project Management within Project Structures

Strengths Weaknesses

1. PM sole authority

2. Less resource conflict

3. Loyalty to project

4. Improved communication

5. Effective decision-making

6. Creation of project management experts

7. Rapid response to problems/clients

1. Potential for higher costs

2. Chance of loyalty to the project rather than the firm

3. No pool of specific knowledge

4. Workers unassigned at project end

5. Low specialist focus

6. Lower chances for specific technologies investments

Chief Executi

VP of Projects

VP of Marketing

VP of Productio

VP of Finance

VP of Research

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- Project has the highest priority.

Board of Directors

Organization with Matrix Structure

…

Project Manager 1

Project Manager 3

Project Manager 2

Engineering Operations Financial

General Manager

F u

n ct

io n

a l R

e sp

o n

si b

il it

F u

n ct

io n

a l R

e sp

o n

si b

il it

F u

n ct

io n

a l R

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(Adapted by many large

companies, e.g., British Aerospace, Renault, …)

- Main components: Projects & Functional deps.

- Dual hierarchy. - High flexibility.

Main Component

Functional Departments

Project Responsibility

Project

Responsibility

Project

Responsibility

5. Could you see any

disadvantages within a

Matrix structure?

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Project Management within Matrix Structures

Strengths Weaknesses

1. Suited to dynamic environments

2. Equal emphasis on project

management and functional

efficiency

3. Promotes coordination across

functional units

4. Maximizes scarce resources

1. Dual hierarchies mean two

bosses!

2. Negotiation required in order to

share resources

3. Workers caught between

competing project & functional

demands

Matrix Organizations: Potential Forms

• Weak Matrix: When the functional culture is traditionally stronger than project culture in an organization.

Key skill: Negotiation

• Strong Matrix: When project focus or customer focus culture is stronger than departments, so project managers have more authority.

Key skill: Interpersonal

• Balanced Matrix (Larson and Gray, 2011)

Functional Matrix Project

(APM, 2006, p.92)

The Organizational Continuum: Project vs Functional Mng

Low Low

High High

Authority Level

Project Manger

Functional Manager

Authority Level

Weak M. Strong M.

? ? ?

Some facts

* No one right way to organize a project.

* Might need to change through the life cycle.

* Science + Art.

* You still need to know and learn more PM to organise more effectively!

External Environment Factors Internal Project Factors

• Stakeholders and their management;

• Parent organization's support, structure, capabilities, culture;

• Contribution of the project towards the parent organization strategies;

• …

• Nature, length, size of the task;

• Project manager & team’s skills,

experiences, knowledge of the

organization dynamics;

• …

How to Organize a Project (Practical Tips!)

- What type(s) of organization better defines Fargo Food’s

project structure?

- What issues could you identify regarding their project and

organization structure?

Fargo Foods Case: Project/Org Structure

3 6

Project Management Office (PMO)

Project Management Office (PMO) General Idea

Project Office

Project Process

• Skills • Knowledge • Pool of staff • Resources • Support • Documentation • Checks and control • Mentoring

• Information about projects

• Knowledge gained from this project

• Staff project experience • Overhead cost

PMO Provides a central facility with the skills and knowledge of how to run the project’s processes. Facilitates coordination and

integration.

Maylor (2010, p.63)

Project Management Office Models

• Weather station ⁻ Merely tracking and monitoring device.

⁻ No direct action.

⁻ Independent observer reporting to the top manager.

• Control tower ⁻ Establishing PM standards. (Potential Impact: +/-)

⁻ Consultation on the standards.

⁻ Enforcing the standards. (Potential Impact: +/-)

⁻ Improving standards.

• Resource pool ⁻ Provides PM knowledge and expertise company-wide.

⁻ Needs strong position and bargaining capacity.

PMO Critiques

• Centrality against dissemination

• Potential for extra bureaucracy

• Potential for communication barrier

- Could a Project Management Office (PMO) help to

overcome the project/company’s issues?

- If yes, how? If no, why?

Fargo Foods Case: Project Management Office (PMO)

Governance

• Typical Project Roles and responsibilities.

• What do we mean by Governance?

• Project-Corporate Governance Relations.

• What is ‘Good Governance’?

Typical Project/Organization Structures

• Typical organizational structures.

• Advantages and disadvantages of the structures.

• Project Management Offices.

What we covered …

Reading and References Lists

Main readings:

1) Pinto, J.K. (2013) Project management - Achieving competitive advantage. 3rd ed. Essex: Pearson. (pages 64-75)

2) Larson, E.W. and Gray, C.F. (2011) Project management : the managerial process. 5th ed. McGraw Hill. (Chapter 3)

3) Maylor, H. (2010) Project management. 4th ed. [electronic resource]. Pearson education/Financial Times Prentice Hall. (pages 250-255)

4) Müller, R. (2009) Project governance. [electronic resource]. Aldershot: Gower.

5) Müller, R. (2017) Governance and Governmentality for Projects : Enablers, Practices, and Consequences. [electronic resource]. Taylor and Francis.

References for some of the definitions:

APM (2012) APM Body of Knowledge. 6th ed. - APM (2019) APM Body of Knowledge. 7th ed.

APM (nd) APM Body of Knowledge Definitions. Access: https://www.apm.org.uk/sites/default/files/FINAL%20proof%20BOK%206%20definitions.pdf

https://www.apm.org.uk/sites/default/files/FINAL%20proof%20BOK%206%20definitions.pdf