1. Negotiation and the management of conflict 2. The project in the organizational structure - PowerPoint PPT Presentation

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1. Negotiation and the management of conflict 2. The project in the organizational structure

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  1. MGMT 483 Week 4 1. Negotiation and the management of conflict2. The project in the organizational structure

  2. Topics for today’s class • Negotiation and the management of conflict • The nature of negotiation • Dealing with outside partners /subcontractors • The role of the project charter • Dealing with scope creep and scope change • Some requirements and principles of negotiation • The project in the organizational structure • The project as part of the functional organization • The pure project organization • The matrix organization • Virtual projects • Mixed organizational systems • The project team Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  3. The nature of negotiation • Conflict is a natural and necessary part of projects, so PMs must learn to deal with it. • Negotiation is one process used to resolve conflict. • Goal: to come up with solutions that are mutually agreeable to the parties involved. • “such that no party can be made better off without making another party worse off by the same amount or more.” (known as a Pareto-optimal solution). Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  4. 3 areas of particular challenge that often need negotiation skills • Dealing with outside partners /subcontractors • The role of the project charter • Dealing with scope creep and scope change Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  5. Dealing with outside partners / subcontractors • Project firm and subcontractors are at odds on a project – the relationship is basically adversarial • Project firm wants the deliverable at the highest quality and lowest cost, ASAP • Subcontractors want to produce the deliverable at the highest profit with the least amount of effort • The concept of “partnering”: designed to replace this with cooperation and mutual helpfulness • Joint evaluation of project progress • A method for solving conflicts and disagreements • Acceptance of a goal of continuous improvement (TQM) • Continuous high level support for the concept of partnering Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  6. The role of the project charter • The Project Charter includes the expected deliverables, budgets, & resource commitments • The charter constitutes the written agreement between the parties • Very important where subcontractors are involved • All projects should have some form of Charter – at least can act as evidence that the parties agreed at some point! Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  7. Dealing with scope creep and scope change • Reasons for scope change • The initial assessment was wrong – technological uncertainty is a big factor • Project team or the client learns more about the project as it proceeds • Change is mandated – in other words, something happens in the external environment that can’t be controlled • The Project Charter and partnering can also help the PM deal with conflicts over scope change – but these are not yet widely or fully adopted Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  8. Incident for discussion • Pritchard Soap Company page 181 • Work in small groups to answer the question Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  9. Some requirements and principles of negotiation • Must always try to negotiate towards a “win-win” situation – it is the key to conflict resolution in project management • What does “win-win” mean? • “It is a requirement of all conflicting parties to seek solutions to the conflict that not only satisfy their own individual needs, but also satisfy the needs of the other parties to the conflict, as well as the needs of the parent organization” Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  10. The 4 points of principled negotiation • Separate the people from the problem • Focus on interests, not positions • Before trying to reach agreement, invent options for mutual gain • Insist on using objective criteria • The Quad Sensor project – page 178 • Questions on page 181 Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  11. The Project in the organizational structure • Huge growth in project-based work • Need for speed, market responsiveness, and product flexibility • Need for broader areas of knowledge in developing new products and services • Rapid expansion of technology • Management inability to understand and control large numbers of activities • Switching to a project environment is difficult and time consuming • Requires the full commitment of upper management • Generally causes a lot of “concern” among employees • As a result, organizations may have multiple structures Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  12. Organizational Issues Related to Projects • How to tie project to parent firm • How to organize the project • How to organize activities common to multiple projects Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  13. Types of project structures in organizations • The project as part of the functional organization • The pure project organization • The matrix organization • Virtual projects • Mixed organizational systems Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  14. The project as part of the functional organization • Organization is divided into functional sub-units • Integration between sub-units handled by rules, procedures • Management chain handles problems • Works well in stable environment Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  15. Advantages • Flexible use of staff • Experts assigned to functional units • Assigned to projects as needed • Staff can easily be assigned to multiple projects • Experts can be switched between projects easily • Functional manager picks best expert for each project • Specialists can share knowledge and experience Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  16. Advantages Continued • Functional units provide technological/knowledge continuity • Also provide continuity of policies and procedures • Functional manager can train and inspect • Functional areas provide for a career path within a knowledge area • Engineers can become supervisors or VP’s • Does not require movement into project management to advance Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  17. Disadvantages • Client is not the focus • Function unit has its own work outside the project • Functional manager not likely to be accountable for project and therefore client • Functional units not focused on project • Function unit sees success in its area as most important • Project seen as secondary, or worse, an interruption • Project manager may not have adequate authority • Must share authority with functional managers • May be several managers responsible for various parts of project • Client may not have a single point of contact at project • This can make response to the client slow or non-existent Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  18. Disadvantages Continued • Slow response • Functional managers manage their part to benefit their functional unit • Interests outside their area may not be fully considered • Motivation is weak • Project is not the worker’s “home” • Project manager most likely does not do their performance evaluations • May not receive additional pay for difficulties of working on project Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  19. Pure Project Organization Figure 5-2 Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  20. Advantages • Project manager has full authority • Will typically report to senior management (project sponsor) • This gives project manager access to managerial advice • This centralizes authority and makes for rapid decision making / response to client • Everyone reports to the project manager • This gives the project manager the ability to make quick decisions • Makes it easier for project manager to motivate and reward members • May be tempered by relationship to functional unit • Shorter communications lines Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  21. Advantages Continued • Can maintain project management skills • Project managers can move from project to project • It pays to hire, train, and promote skilled project managers • Project team has its own identity • Project members work for the “project” not the functional unit • This can significantly improve performance • Quick decisions • Authority is centralized Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  22. Advantages Continued • Unity of command • Each worker reports to one, and-only-one, manager • Project has a simple structure • Structurally simple and flexible • Easy to implement • Holistic approach • Everyone on project is concerned about project, not their functional unit Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  23. Disadvantages • Duplicate staffing • Each project has a full staff • This leads to overstaffing • Stockpiling • Project managers tend to stockpile resources so they are available when needed • They also tend to keep those resources longer than needed just-in-case • Experts falling behind in other areas • Experts on a project will focus on the areas essential to the project • This can lead to them falling behind in other areas • It can also be difficult to feed their developing expertise back into the organization Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  24. Disadvantages Continued • Organizational inconsistency • Corner-cutting • “They don’t understand our problems” • Life of its own • Projectitis • Us versus them • Life after the project ends • Lots of uncertainty • Will there be layoffs • Rusty skills Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  25. Comments on Pure Project Organization • Only way to do large, one-time projects • Disadvantages make it impractical for continually doing projects, e.g. construction • Matrix developed in aerospace to deal with this Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  26. The Matrix Organization Figure 5-3 Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  27. The Matrix Organization Continued • Functional part provides home for workers after project • Functional part helps maintain expertise • In a strong matrix, people from functional areas are assigned to project • In a weak matrix, capacity from functional areas are assigned to project Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  28. Advantages • The project is the focus • That remains the project manager’s responsibility • The project has access to entire organization for labor and technology • Projects draw from functional organizations as required • This reduces duplication of resources • Less anxiety about the end of the project • Project members return to their functional organizations • Response to client is rapid • That remains the project manager’s responsibility • With much remaining within parent organization, response to parent is also rapid Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  29. Advantages Continued • Consistent policies • Parent organization will oversee project • Project will have closer access to parent administration • Easier to balance organizational resources • Less competition for resources • Competition can be controlled by parent organization and functional managers • Flexibility • Many different possible structures between strong and weak • Different structures can be used for different projects • Different structures can be used for different functional areas Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  30. Disadvantages • Functional units make many decisions, including technology ones • Project manager has less control than in a pure project • Project manager’s control is balanced against that of the functional manager • If they disagree, it can be hard to resolve • Negotiation is the key to project success Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  31. Disadvantages Continued • Projects compete for resources • This is especially true when there are several large projects • Someone above project managers must set and enforce priorities • Multiple schedules will add stress to functional managers Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  32. Disadvantages Continued • Strong matrices mirror many disadvantages of project structure • People are assigned to, and identify with, “their” project much as in the project structure • Workers do not have a single manager • This splits loyalty • Makes performance appraisal difficult • Information flow is difficult Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  33. Virtual Projects • Project team crosses time, space, organizational, or cultural boundaries • Facilitated by the Internet and modern communications media • Often organized as a matrix Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  34. Rules for Virtual Project • Use it for challenging and interesting projects • Solicit volunteers to work on the team rather than forcing people to do so • Make sure a few people on the team already know each other • Create a resource to learn about one another and to do online collaboration and brainstorming • Encourage frequent communications • Divide work into geographic modules if possible Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  35. Mixed Organizational Systems Figure 5-4 Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  36. Choosing an Organizational Form • Firms typically do not set out to “pick” an organizational form • Rather, the structure evolves over time • The structure is not static • Rather, it changes as the organization, its goals, and its environment changes Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  37. Functional Form Best for… • In-depth application of a technology • Large capital investment, especially when that investment is concentrated in one functional area Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  38. Project Form Best for… • Handling a large number of similar projects • Handling a one-time project that requires much control but is not focused on one functional area Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  39. Matrix Form Best for… • Projects that require inputs from several functional areas • Projects that use technology from several functional areas Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  40. The Project Team • Different project need different staffs • A typical engineering project core team: • Systems Architect • Development Engineer • Test Engineer • Field Manager • Contract Administrator • Project Controller • Support Services Manager • Additional resources would be provided from the functional organizations as needed to accomplish all the tasks. • All team members report to the PM Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  41. Human Factors Continued • Some of the problems that prevent a team from performing effectively: • Lack of consultation and input • Internal conflict • Member frustration • Wasting time • Poor decision making • Team members more concerned with finishing job than doing good job Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  42. Human Factors and the Project Team • The PM must be prepared to deal with the many human issues that will occur even on the most technically oriented project. • Made more challenging by the fact that the PM often does not control pay and promotion issues for his or her team members. • PM should use formal and informal team building activities to foster the morale and participation of the team. • PM should consult his / her team and use the input Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

  43. Incident for discussion • “Teamwork is a lot of people doing what I say” - anon • Shaw’s Strategy page 225 • Work in small groups to answer the question Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.