Course: MGT 1201 Project Management

Semester: June 2024

Lecturer: Ms Jayashiry Morgan
 Recap from last week:
• Chapter 1: Introduction to Project Management
• Chapter 2: PMO Roles and Project Constraints
Chapter 3: Project Life Cycle and
Process Group
 Learning Outcomes

By the end of this session, students should be able to:

1. Define different types of organizational structures commonly used

in project management.
2. Identify the key phases and components of both project and
product life cycles.
 Organization Structure
• Represents the management hierarchy:
o Reporting relationships who report to whom
o The official chain of control or authority, which deals of official
activities, such as firing, hiring, and promotion etc.
• Organization can be grouped into major subdivisions on the basis of a
number of frameworks.
• Responsibilities & type of work for each subdivision
• Official lines of authority & communication

Informal organization also important and can exist in parallel to the official
organization, communication of the informal is socially motivated.
Forms of Organization Structures are:
• There are a number of options

• Best depends on goals, type of work it supposed to

do, and the environment within which it operates.

✓ Functional organization
✓ Project organization
✓ Matrix organization
Functional Organization
 Functional Organization
• This type relies on formal rules, procedures, coordinated plans, budgets,
fairly common, segmented by department and their functions.

• Works well in repetitive, stable environment

 Functional Organization
• A functional organization is the most common type of the three.

Works best in small organization

• The project manager's role is to ensure smooth execution of processes

and projects; however, the functional manager has the most power and
makes the final decisions.
Types of Functional Organization
• Geographic Differentiation
• Product Differentiation
• Customer Differentiation
• Process Differentiation
 Geographic Differentiation

• Definition: Organization divided by geographic regions.

• Advantages: Tailored strategies for local markets, improved customer
service, better local knowledge.
• Example: Coca-Cola's regional divisions.
 Product Differentiation

• Definition: Structure based on different product lines.

• Advantages: Specialized focus on each product, innovation, clear
accountability.
• Example: Procter & Gamble’s beauty, health care, and home care divisions.
 Customer Differentiation

• Definition: Organization based on different customer segments.

• Advantages: Personalized service, increased customer satisfaction, tailored
marketing.
• Example: Banks with retail, corporate, and private banking divisions.
 Process Differentiation

• Definition: Structure based on key business processes.

• Advantages: Streamlined operations, specialization, efficiency.
• Example: Toyota’s distinct departments for design, assembly, and quality
control.
 Advantages of Functional Organization

An advantage to the functional structure is the role of the functional

manager, which means there is only one boss. This reduces or prevents
conflicts of interest and makes it easier to manage specialists:

• Clear line of authority

• Career development
• Comfortable and easy
• Technical expertise
• Flexible resource assignment
Disadvantages of Functional Organization
A disadvantage of this type of structure is that the project manager has
limited authority and a limited career path.

• No accountability over complete project

• No project emphasis
• Low coordination across function
• Low delegation of authority
• Work delays due to red tape
• Heavy politics
• Lack of a big picture view
Project Organization
 Projectized Organization
• Projectized organization is a project focused organizational structure
where project manager has the final authority over the project to make
project decisions, priorities, acquire and assign resources.

• A projectized organization refers specifically to an organizational structure

that has been set up in a manner in which the project manager leads the
group and in which the project manager has the ultimate authority to
make any and all decisions involving the organization.

• In a projectized structure, all the work is looked at as a project. The project

manager has complete control, unlike in the functional structure, and all
team members report directly to the project manager.
 Projectized Organization
• Sometimes these team members are permanent, and sometimes they are
hired as temporary workers to help with the project until its completion. If
the organization takes on a large project, it will have all the necessary
resources available to sustain the project and will act as a small, self-
contained company.

• The project manager works with complete autonomy (central authority,

power) over the project, team is on the project full time and report to the
project manager.

• As a project manager, you have the responsibility to take authority, rather

than waiting for someone to give you the authority.
 Project Organizations

• Advantages to the projectized structure include the project manager's

opportunity for career progression. In addition, because good
communication exists within the project work, the team members tend to
be more committed to, and excel in, their responsibilities.

• The disadvantage of a projectized structure is that, because the team

breaks up and disperses after the completion of the project, there are no
long-term goals or sense of job security for the rest of the workers.
Another disadvantage is that the organization has to essentially clone the
same resources for each project (project manager, work area,
administrator).
Matrix Organization
 Matrix Organizations
• It is used mainly in the management of large projects or product
development processes, drawing employees from different functional
disciplines for assignment to a team without removing them from their
respective positions.

• Matrix management is a type of organizational management in which

people with similar skills are pooled for work assignments.
 Matrix Organizations
• The matrix structure combines both the functional and projectized structures. Each
team member has two bosses; they report both to the functional manager and the
project manager.
o If the matrix is strong, the power resides more with the project manager.
o If the matrix is weak, the power resides more with the functional manager.
o The key is to find a balance in which the power is shared equally.

• Because of its complexity, this type of structure can lead to problems if it is not used
carefully and properly. Good communication is essential for success.
Advantages of Matrix Organizations
✓ Individuals can be chosen according to the needs of the project.
✓ The use of a project team which is dynamic and able to view problems in
different way as specialists have been brought together in a new
environment.
✓ Project managers are directly responsible for completing the project within
specific deadline and budget.
✓ Required resources can be managed moving into and out of the project
team - Project cost is lessened because resources are used as needed
✓ There are an appropriate focus on the project objectives through a single
PM.
✓ The overall enterprise utilization of resources is better handled in the mode
Disadvantages of Matrix Organizations

✓ A conflict of loyalty between line managers and project

managers over the allocation of resources.

✓ Projects can be difficult to monitor if teams have a lot of

independence.

✓ Costs can be increased if more managers (ie project

mangers) are created through the use of project teams.
 Matrix Problems

• Unclear lines of authority, Two bosses, dual reporting

• "No Man Can Serve Two Masters!“ - military principle of
UNITY OF COMMAND
• chaos, confusion more common
• Often project manager tells you what to do, but your
raise comes from functional manager
• Success highly depends on individuals
 Comparison between Organizations Types
• In projectized organizations, the Project Manager has all the authority
he wants, as opposed to matrix and functional organizations, where
the Project Manager has no or little authority.

• The Project Manager owns the resources, as opposed to matrix and

functional organizations where he borrows the resources.

• Resources are only allocated to projects in projectized organizations. In

other types of organizations, resources report to their functional
managers and usually do routine, non-project work.
 Organizational Structure
(from the Project Management Institute Project Management Body of Knowledge)
Project VS Product Life Cycle
 Project Life Cycle
• Most of the time projects are undertaken to produce a product, and once
the product is delivered the project ceases to exist.

• It does not matter what kind of project you are managing; the project
management fundamentals are same in all fields. All project life cycles
consist of these five phases: initiation, planning, executing, monitoring &
controlling, and closing. These phases are generally sequential and can
overlap.
 Project Life Cycle
1. In the initiation phase, you develop the project charter and identify the
project stakeholders.
2. In the planning phase, the project management plan will be developed
which will help you execute your project.
3. In the execution phase, you do the real work. Here the actual project work
is carried out and the product is built.
4. In the closing phase, you hand over the project to the client and close the
project.
5. These phases are in sequence and monitoring and controlling happens
throughout the project, although these processes can overlap or repeat.
The PMBOK Guide defines the project life
cycles in four phases:

1. Starting the project

2. Organizing and preparing
3. Carrying out the project work, and
4. Closing the project
 Characteristics of a project life cycle:
• Risks are higher when the project starts and they decrease as the project
moves further.
• Staff requirements are low at the beginning of the project and are at a
maximum during the execution phase, and then they may
• decrease.
• The cost of changes is lowest at the beginning of the project and it starts
increasing as the project moves further.
• Stakeholder influence is higher at the beginning of the project and it starts
decreasing as the project moves further.
• Most of the money and time are spent while carrying out the project work.
 Example
• Suppose you have a project to build a new motorcycle.
• To build the motorcycle, first of all you identify the stakeholders and collect
the requirements. Once the requirements are identified, you will develop
the project management plan to build the motorcycle and develop the
schedule.
• Then you start the real work of building the motorcycle.
• Finally, you will hand over this product to your client and the project will be
closed.
 Product Life Cycle
The product life cycle starts from the inception of the idea to the point when
the product is retired. The stages of the product life cycle are: development,
introduction, growth, maturity, and retirement. Usually these phases are
sequential and do not overlap. The project life cycle can be a part of one or
more phases in the product life cycle.
 Product Life Cycle
1. In the development stage, you will generate the idea to create the product
and the product is created.
2. In the introduction stage, you will start marketing the product and begin
selling the product to customers.
3. In the growth phase, the sales increase.
4. In the maturity stage, the product is accepted widely and sales are at their
peak.
5. Last is the retirement stage. At this level you will try to sell out all of your
inventory and move on to the next product. This stage happens due to
technical advancement or because your product is not selling enough to
support its production cost.
 Product Life Cycle
• Product life cycle can have many project life cycles. For example, the first
project life cycle can include the development of the project, and then
other project life cycle can be the addition of another function to the
product.

• You can say that, generally, the project life cycle is a subset of the product
life cycle because the product life cycle continues to exist even after the
project is completed.
 Example
• Let’s consider the product life cycle for a new motorcycle that your company may want
to build and sell in the market.
• The first step of this product life cycle can be the idea generation. This may include a
feasibility study, market research and the business plan. When this phase is complete
you will initiate a project to build this bike.
• Once the motorcycle is built, the project will be complete and the next phase of your
product life cycle begins, which is marketing and selling motorcycles to customers.
• After selling you may need to provide after sale support, and then the retirement phase
occurs.
• The retirement phase may include selling motorcycles at a discounted price.
• Please note that if during the product life cycle you add any new function to the product,
you will create a new project to do so, for example, increasing the engine capacity of the
motorcycle to support faster pickup.
 The Difference between the Project and
Product Life Cycle
• The product life cycle is longer than the project life cycle.
• The project life cycle has a definite end while the product life cycle may not.
• A product life cycle can have single or multiple projects.
• The map for the product life cycle is somewhat conceptual and depends on the market
condition; on the other hand projects have
• predictive and clearly defined roadmaps.
• The product life cycle phases do not overlap while the project phases may overlap.
• In the product life cycle, phases generally occurs only once, while in the project life cycle
phases may repeat.
• In the product life cycle phases are sequential, while in project life cycle phases may or
may not be sequential.
 Class Activity

• Divide into 3 groups

• Each group to prepare mind map for organization structure
(functional, project, matrix).
• Use the whiteboard to brainstorm.