DCC40132 –PROJECT MANAGEMENT & PRACTICES

TOPIC 2: Organizational Structures and Project Life

Cycle in Project Management

Prepared by:
AZHANI ARIFFIN
MSc. Civil Engineering (Construction), UiTM
Civil Engineering Department, PTSB
Organizational Structures and Project Life Cycle in
Project Management
2.1 Interpret the influences of organizational structures in project management
2.1.1 Explain types and influences of organizational structures in project management

2.2 Apply project life cycle in project management

2.2.1 State the life cycle in a project management
2.2.2 Identify the characteristics of project lifecycle
2.2.3 Describe the phase of project life cycle

2.3 Explain the resources in the project management:

2.3.1 State manpower management
2.3.2 Explain plant and machineries management
2.3.3 Describe material management
2.3.4 Identify overheads and profit
THREE KEY ELEMENTS OF ORGANIZATION STRUCTURE

1. Designates formal 3. Includes the design of systems

reporting relationship, to ensure effective
including the number of communication, coordination and
levels in the hierarchy intergration of efforts accross
and the span of control deparments.
of managers and
supervisors

2. Identifies the grouping

together of individuals into
departments and of
departments into the total
organization.
 SAMPLE OF ORGANIZATION CHART
CEO

VICE PRESIDENT VICE PRESIDENT DIRECTOR HUMAN

FINANCE MANUFACTURING RESOURCE

CHIEF
BUDGET ANALYST TRAINING BENEFIT
ACCOUNTANT
SPECIALIST ADMINISTRATOR

PLANT MAINTENANCE
SUPERINTENDENT SUPERINTENDENT
FIVE BASIC PARTS OF AN ORGANIZATION (MINTZBERG’S
FRAMEWORK)
TOP MANAGEMENT
provides direction, planning, strategy, goals
and policies for the entire organization or
major divisions.
ADMINISTRATION
TECHNICAL SUPPORT STAFF
SUPPORT STAFF Responsible for the
Helps the MIDDLE MANAGEMENT smooth operation
organization Responsible for implementation an and upkeep of the
adapt to coordination at the departmental organization,
environment level including its physical
and human elements

TECHNICAL CORE
• Includes people who do the basic work of the organization
• Produce the products and service outputs of an organization
• Where the primary transformation from inputs to outputs take place
 A) FUNCTIONAL STRUCTURE

A functional structure is a design that groups people on the basis of their common skills, expertise, or
resources they use. Therefore, activities are grouped together by common function from the bottom to
the top of the organization.

Advantages Disadvantages
Some advantages of a functional organization Leads to poor horizontal coordination among
are that the lines of command are clear, and department; eg; poor communication across
enable organization to accomplish functional groups and slow response to changes in the
goals. environment
Individuals specialize and departments tend to May cause decisions to pile on top; hierarchy
develop common knowledge across the group as overload
well as enable in-depth knowledge and skills
development
There may be an advantage to individuals in that Involves in restricted view of organization goals
career paths can be fairly easily defined.

Allows economies of scale within functional Results in less innovation

departments
 EXAMPLE OF FUNCTIONAL STRUCTURE

CEO

VICE PRESIDENT VICE PRESIDENT DIRECTOR HUMAN

FINANCE MANUFACTURING RESOURCE

CHIEF
BUDGET ANALYST TRAINING BENEFIT
ACCOUNTANT
SPECIALIST ADMINISTRATOR

PLANT MAINTENANCE
SUPERINTENDENT SUPERINTENDENT
 B) DIVISIONAL / PRODUCT STRUCTURE

❖ Business activities are divided in several segments on the basis of different geographical,
services, market and product group.
❖ Each division has an authority of making own decisions regarding their own division.
❖ Each division has all kinds of functions and employees that enable the division to run as
one organization.

ADVANTAGES OF DIVISIONAL / PRODUCT STRUCTURE

✔ Make the overall business self sufficient as all the divisions are acting like separate company.
✔ Each division management able to make own decisions without waiting for a long time for the approval
of the parent company.
✔ Availability of highly skilled personnel that can help each other across divisions.
✔ High chances of getting promotions, more secured job and more rewarding.
✔ The parent company has lots of specialized workers in different divisions. These workers are available
when needed to accomplish a project.
✔ The management of each division could understand the needs of their employees as they control a
limited group of employees.
 DIVISIONAL / PRODUCT STRUCTURE

DISADVANTAGES OF DIVISIONAL / PRODUCT STRUCTURE

✔ The biggest obstacle to adopt this structure is HIGH COST because;
⮚ Parent company has to provide resources when launching a new division.
⮚ Parent company has to support the newly launched division until the division able
to start work properly.
⮚ Each division needs to have proper equipment for its operations, therefore the
parent company has to provide double amount of resources.
✔ Knowledge, information and idea sharing are unlikely because each division has
different tasks to accomplish. Therefore specialized workers might have same
expertise but they are working in different environment according to their own division.
EXAMPLE OF DIVISIONAL/PRODUCT STRUCTURE
 C) MATRIX STRUCTURE

• In the matrix structure, both product division and functional structures (horizontal & vertical) are
implemented simultaneously.
• The product managers (horizontal) and functional managers (vertical) have equal authority within
the organization, and employees report to both of them.

Conditions For The Matrix

⮚ Condition 1
Pressure exists to share scarce resources (employees, machine, etc) across product lines.
⮚ Condition 2
Pressure exists for two or more critical products, therefore a dual-authority is needed between the
functional and product sides to balance the pressure.
⮚ Condition 3
Frequent changes in the organization environment and high interdependence between departments
require complex coordination and information processing in both vertical & horizontal directions.
 MATRIX STRUCTURE
Advantages Disadvantages
✔ Achieves coordination necessary to meet ⮚ Causes participants to experience dual
dual demands from customers authority, which can be frustrating and
✔ Flexible sharing of human resources confusing
across products ⮚ Personnel need good interpersonal skills
✔ Suited to complex decisions and frequent and extensive training to deal with
changes in unstable environment various divisions.
✔ Provides opprtunity for both functional ⮚ Time consuming because involves
and product skill development frequent meetings and conflict resolution
✔ Best in medium-sized organizations with sessions
multiple products ⮚ Will not work unless personnel
understand the nature of the structure
and adopt collegial rather than vertical
type relationship
⮚ Requires great effort to maintain power
balance
EXAMPLE OF MATRIX STRUCTURE
 Indications of an Ineffective Organizational Structure

1. Breakdown in communication
If departments are no longer efficiently sharing information and processing data as they should be, then that is a problem with organizational communication. One of the causes
of a breakdown in company communication is that departments have begun to act on their own. There are many reasons why this could happen including a lack of trust
between departments, the feeling by one department that another department is incapable of performing its job or incompetent management in the departments. The
departments bypass the organizational structure and communication begins to break down.

2. Quality control issues

Organizational structure comes with a series of checks and balances that are designed to perform certain levels of quality control. The engineering department and the
marketing department work together to create instruction manuals for products that the general public can use. Accounting works with sales to discuss client accounts and keep
sales moving. When the organizational structure begins to deteriorate, these checks and balances will stop. The marketing group starts to create instruction manuals without
extensive input from the marketing group and information gets left out. If quality control is becoming an issue, it may be because the organizational structure is breaking down.

3. Low morale
When departments are not communicating and individuals within those departments are getting reprimanded, morale in the company will begin to suffer. Employees start to
ignore the organizational structure because of fear of discipline, they do not trust their manager or they no longer feel included in the overall success or operation of the
company. In some cases employees may have multiple managers due to a breakdown in the company hierarchy, and this will cause confusion, according to employment expert
Joan Lloyd writing on the Job Dig website. An alienated workforce with low morale is a product of a failing organizational structure .

4. Customer service
An ineffective corporate structure sometimes lacks the ability to monitor interactions with the customers. If the sales group is not required to report customer issues to the
customer service group, then the customer service people will be unaware of the problem if it should occur again. In an ineffective organizational structure, there is no cohesive
way of handling customer issues. When customers contact the company, they may get three different answers if they talk to three different people. This causes a problem with
customer retention and ongoing revenue. If you notice that your company is having a difficult time holding on to clients, you will want to check your organizational structure for
problems.
 Consequences of Bad Organizational Structure

1. Communication Breakdown
Orders don't get shipped, schedules get off track and customers are left hanging when communication breaks down in your organization. Employees
look to the structure of the company to guide their production and their everyday tasks. When they aren't told about changes or miss deadlines
because of inaccurate or missing information, every department is affected. An appropriate chain of command, defined systems of how information
is passed on through the company and effective tools for getting information out are vital to maintain the flow of business that leads to profits.

2. Low Morale
Employees who do not have a clear structure to follow eventually lose motivation. When the means to deliver new ideas or foster creative input are
disorganized, employees lose interest in the company and decrease production. Sales people without a clear organizational structure for follow-up
and fulfilling orders lose the incentive to produce. Frustration leads to low morale that affects your retention rates. Even with a positive mission
statement, clear goals and effective leadership, with a bad organizational structure, you are heading for failure.

3. Business Losses
Customers who continually face obstacles in trying to receive their product or service in a timely manner eventually find someone else to fulfill their
needs. Poor internal organization eventually reaches your customers, who lose confidence in your ability to effectively serve them. Profitable clients
are attracted to a smooth operation in which they can place their confidence. While your employees' uneasiness with the bad organizational
functions may cause temporary setbacks that you may be able to salvage, losing customers can mean disaster. You not only lose immediate business,
but your referral stream also may dry up. Dissatisfied customers tend to talk about their disappointment with vendors and providers, making it more
difficult to establish new business.
 16

PROJECT LIFE CYCLE IN PROJECT MANAGEMENT

 PROJECT PHASES
Projects are usually divided into
SEVERAL PHASES
to
PROVIDE BETTER MANAGEMENT
CONTROL

COLLECTIVELY, these phases are known as the

PROJECT LIFE CYCLE
 PROJECT LIFE CYCLE
Project Life Cycle defines:
THE BEGINNING AND THE END
of a project.

PLC Defines:
⮚ What TECHNICAL WORK should be done in each project phase;
⮚ WHO should be involved in each phase.
 THE PROJECT LIFE CYCLE

• Projects are “born” when a need is identified by the

customer.

• Project life cycles vary in length, from a few weeks to

several years.

• Not all projects formally go through all four phases of the

project life cycle.
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FOUR PHASES OF PROJECT LIFE CYCLE
 PHASE 1 OF THE PROJECT
LIFE CYCLE

⮚The first phase involves the identification of a need,

problem, or opportunity.

⮚The need and requirements are usually written by the

customer into a document called a request for proposal
(RFP).

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 PHASE 2 OF THE PROJECT
LIFE CYCLE

⮚The second phase is the development of a proposed

solution to the need or problem.

⮚This phase results in the submission of a proposal.

⮚The customer and the winning contractor negotiate and

sign a contract (agreement).

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 PHASE 3 OF THE PROJECT
LIFE CYCLE

⮚ The third phase is performing the project.

⮚Different types of resources are utilized

⮚Results in the accomplishment of the project

objective

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 PHASE 4 OF THE PROJECT
LIFE CYCLE
⮚The final phase is terminating the project.

⮚Perform close-out activities

⮚Evaluate performance

⮚Invite customer feedback

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 PROJECT LIFE CYCLE
Definition Planning Execution Deliver
Level of y
effort

1. Goals 1. Schedules 1. Status reports 1. Train customer

2. Specifications 2. Budgets 2. Changes 2. Transfer documents
3. Tasks 3. Resources 3. Quality 3. Release resources
4. Responsibilities 4. Risks 4. Forecasts 4. Reassign staff
5. Teams 5. Staffing 5. Lessons learned

Irwin/McGraw-Hill ©The McGraw-Hill Companies, 2000

 LIFE CYCLE OF A
CONSTRUCTION PROJECT
There are 6 Basic Phases that contribute to developing a
project from an idea to reality:

⮚ Concept & Feasibility Studies

⮚ Engineering & Design
⮚ Procurement
⮚ Construction
⮚ Start-up & Implementation
⮚ Operation & Utilization
 MATERIALS
• Building material is any material which is used for a construction
purpose.
• Many naturally occurring substances, such as clay, sand, wood and
rocks, even twigs and leaves have been used to construct buildings.
• Apart from naturally occurring materials, many man-made products
are in use, some more and some less synthetic.
• The manufacture of building materials is an established industry in
many countries and the use of these materials is typically segmented
into specific specialty trades, such as carpentry, plumbing, roofing and
insulation work.
• They provide the make-up of habitats and structures including homes
 EQUIPMENTS
Construction Equipment are divided into:

1. Earthmoving equipment
2. Construction vehicles
3. Material handling equipments
4. Construction equipment
Earthmoving Equipment
1.Bulldozers
2.Excavator
3.Trenchers

Construction Vehicles
Material Handling Equipment

1.Cranes
2.Hoists
Earthmoving equipment - Bulldozers
Earthmoving equipment - Excavator
Earthmoving equipment - Trenchers
Construction vehicles - Dumpers
Construction vehicles - Tippers
Material Handling Equipment - Cranes
Material Handling Equipment - Hoists
Construction Equipment - Concrete mixer
Construction Equipment - Stone crusher
Construction Equipment - Road rollers
 OVERHEAD & PROFIT
1. Overhead
• Typically organization costs that are not directly linked to a specific project. These costs cover
general expenses such as upper management, legal, market promotion and accounting.
• Overhead costs are usually charged per unit of time or ad a percentage of labour or material costs.
(Gray and Larson, 2008)

2. Profit
• A financial benefit that is realized when the amount of revenue gained from a business
activity exceeds the expenses, costs and taxes needed to sustain the activity.
• Any profit that is gained goes to the business's owners, who may or may not decide to spend it on
the business.
http://www.investopedia.com/terms/p/profit.asp#ixzz23Tq5D38V
 Relevant YouTube link for reference on Construction Equipment & Management:
Organizational Structures and Project Life Cycle in
https://www.youtube.com/watch?v=-cuCUP-Fz38

Project Management
Thank You For Your
Attention