Title: Organization Types MT 246 Module 2
1Organization Types MT 246 - Module 2
2Assignments
- Should have read Nicholas Chapters 1 2
- Lecture will cover 14 and Appendix C
- NASA Org Chart homework assignment was described
in last class - Due next Thursday, January 25
3Last Lecture
- Definition of a Project
- Discussed the Roles and Responsibilities of the
Project Team - Project Manager
- Project Staff Personnel
- Contract Management
- Subcontract Management
- Production/Material Control
- Cost/Schedule Control (Project Operations)
- System Engineer
4Last Lecture (contd)
- Engineers/Scientists
- Technicians/Assemblers
- Quality Assurance
- Specialty Engineering
- Materials and Processes
- Component Engineering
- Reliability, Availability, Maintainability
- Safety Engineering
- Configuration and Data Mangement
- Logistics
5This Lecture
- Nicholas discusses system engineering next
- Need to understand how businesses organize
themselves before covering technical management - Follow with Cost and Schedule methodologies
- Project Manager spends 60 to 70 of his/her time
here - Cover System Engineering and System Life Cycle
last - Discuss the way companies organize themselves
- Formally studied in the field of Organizational
Development - Three common methods of organizing a company
6Business Organization Types
- Traditional
- Functional
- Geographical
- Customer
- Process
- Product
- Project
- Matrix
7Business Organization Objectives
- Organization success depends on the way
individuals and groups are organized - Last lecture reviewed roles and responsibilities
of individuals in an organization - Employees can be organized by employee function,
product type, project, or geographic/customer
location - Managers in an organization will typically have 5
or 6 Direct Reports - Supervisors may have up to 15 or 20 technicians
in their group - Span of Control of a manager is determined by
position in the corporate hierarchy
8Business Organization Objectives (contd)
- Clearly define the flow of authority within the
company and the project - Typically have two types of organization charts
- Functional
- Project
- Deal with issues of reporting to both a project
and a functional manager - Two lines of authority
- Two bosses
- Authority matrix
- Deal with contractual authority to subcontractors
9Authority Matrix
10Large Scale Integration Projects
- Large projects often fail as a result of
incomplete definition of the lines of authority - Project manager must spend significant time and
thought on the organization of sub-projects and
sub-contracts - Example NASA CSOC Project is 3.5 Billion over 5
years - This can be quite complex
- If you have a complex reporting relationship, the
probability of failure goes up
11Integration Relationships on a Large Scale
Project
12Iron Butterfly Scenario
- Model company and project scenario discussed
throughout Nicholas - Utilized to assist student in relating
theoretical concepts to a real world scenario - Used throughout the course
- Iron Butterfly Co. is the Contractor
- Logistical On-line System (LOGON) Development
- Project Plan covered in Appendix C
- Read and Study independently
- Midwest Parcel Distribution Co. (MPD) is the
Customer - Four subcontractors
13LOGON Project
- Total Cost 1,148,094
- Labor Overhead 708,873
- Material 87,070
- Subcontracts 247,650
- General and Administrative 104,501
- Schedule 11.5 months
- Automated warehouse facility and equipment
14LOGON Deliverables
- Facility Refurbishment
- Robotic Transporter
- Overhead Conveyor System
- Storage Rack Assemblies
- Shipping Containers
- Data Processing System
- Software
- Mainframe
- Work Stations
- Local Area Network
15MPD Facility Layout
16Robotic Transporter
17Storage Rack Assembly
85 feet
15 feet
Shipping Container
7 ft
18Iron Butterfly Functional Org Chart
19Organization Design
- No best type of organization
- Unique for each organization
- Organization structure is dynamic
- Evolutionary responses to ongoing problems
- As organizations grow, or environment changes,
managers review and revise the organization
20Functional Organization Description
- Personnel in an organization are grouped by area
of expertise - Functional units or areas
- Marketing, finance, production, design
engineering, etc. - Accomplishment of a project requires coordination
between functional areas - A great deal can be learned by the study of Org
Charts
21Functional Organization Drawbacks
- When problems occur, functional managers must
resolve issues and set priorities - Problems can occur with this type of organization
when a functional manager has multiple projects
in progress simultaneously within his group - Schedule priorities and allocation of personnel
can allow a project to become an Orphan due to
manpower loading limitations, conflicts with
other projects, etc.
22Typical Management Meeting
23Liaison Assignments
- This is the first step toward providing project
focus within a Functional Organization - Assign focal point within each organization to
interact across functional boundaries - Still has the problem of very complex management
interaction - Many individuals in each company responsible for
project health - No project manager
- Success of this type of organization depends on
the people involved, and their willingness to
own a problem - How do you interview and select/hire these
folks!!!
24Iron Butterfly Liaison Org Chart
25Project Team Assignments
- Assignment of Project Manager who reports to a
high level of the organization - Next step towards providing project management
focus - Accomplished by creating dotted line
relationship between project personnel - Weak Project Matrix
- Useful for small projects requiring fractional
headcount - Employees at the working level have two bosses
26Iron Butterfly Project Team Org Chart
27Project Organization Description
- For large projects, it is better to organize
around project deliverables - Allows excellent customer and project focus
- Combination of Functional and End Item
subprojects - Dedicated project personnel assigned only to your
project - Fractions of engineers are required for some
roles - Must assign people to multiple roles
28Iron Butterfly LOGON Project Org Chart
29Project Organization Drawbacks
- Temporary Organization
- At end of project, everyone has to scramble for
new project assignments - Different skills required at different project
phases - Hire/Release, or
- Use sub-optimal personnel skill mix if keep
project team intact throughout life of contract. - Small projects cannot justify dedicated project
manager and staff
30Project Organization Design Guidelines
- Carefully think through each key project role
- Consider several alternatives
- Organize around deliverable end items
- Change the organization with project phases
- Avoid weird org chart topologies and span of
control extremes
31Org Chart Topologies
32Typical Project Org Chart
33NASA Org Chart - Top Management
34NASA Org Chart - Program/Project
35Matrix Organization Description
- Grid-like structure of authority and reporting
relationships - Created by overlay of a project organization and
functional organization - Functional part of the organization is repository
for technical expertise and physical resources
(Labs, manufacturing areas, etc.) - Project manager negotiates personnel assignments
- Project manager controls money
- Functional manager controls personnel
(assignments, salaries, raises)
36Iron Butterfly Matrix Org Chart
37Drawbacks of Matrix Organizations
- Overlays horizontal resources onto Functional
vertical resources - Subject to authority conflicts between Project
and Functional managers - Engineers can be torn between dual loyalty to
Project Manager (tasker) and Functional
Manager(rater) - Required to wear two hats
- Functional manager controls promotions and raises
- Project manager recommends to the Functional
manger
38Org Chart Tips for New Employees
- New hires generally are not given org charts
- Must figure out organization upon assignment/hire
- Ask for and study Org Charts
- Study Telephone Directory
- Study company Web Site
- There are always two organizations
- Published Org Charts (Wiring Diagram)
- Informal Org Structure
- Usually derived from prior working relationships
- Family/school alums, etc.
39Org Chart Tips for New Employees (contd)
- Watch out for the Informal Org Structure!!!!
- It can hurt you if unaware
- It can help you if you figure it out
- Always treat upper managers, peers, and people
working for you with respect - They may shoot pool with the President
40How to Select a Project Organization
- Certain situations lend themselves to applying
certain types of organizations - No correct approach
- Depends heavily on the talent of the employees
- General guidelines apply
41Organization Criteria
- Frequency of new projects
- Duration of projects
- Size of projects
- Complexity of relationships required to succeed
42Organization Selection Criteria
43Role of Structured Process
- Total Quality Management (TQM)
- Quality Function Deployment
- Concurrent Engineering
44Next Topic - Role of the Project Manager
- Job Responsibilities
- Lines of Authority
- Characteristics and Skills
- Hiring and Selection