Masaryk University Faculty of Informatics. Master Thesis. Project Management in Matrix Organization

Transcription

1 Masaryk University Faculty of Informatics Master Thesis Project Management in Matrix Organization Student: Agron Zylali, Brno 2014

2 Statement I declare that I have worked on this thesis independently using only the sources listed in the bibliography. All resources, sources, and literature, which I used in preparing or I drew on them, I quote in the thesis properly with stating the full reference to the source. Agron Zylali Supervisor: RNDr. Stanislav Michelfeit 1

3 Contents Abstract Introduction Background Literature and Theory Project Management Project Life Cycle Project Initiation Project Planning Project Execution Project Closure Project Decomposition Product Breakdown Structure Organization Breakdown Structure Work Breakdown Structure Project Organization Functional Organization Projectized Organization Matrix Organization Literature Review Interview Procedure Questions related to Matrix Structure Organization Questions regarding the projects in Matrix Structure Organization Conclusion Bibliography

4 Abstract This diploma thesis contains a topic regarding project management, mainly concentrated about projects in matrix organization structure, which is a blend of functional and projectized organization. Initially I will elucidate the significance in detail for each various type, with the enlightenment of advantages and disadvantages. Furthermore I will focus on responsibilities of each organization line within the matrix organization mainly for managing a project, including as well the influence of work breakdown structure (WBS). Entirely I will illustrate the interaction between these lines throughout project lifecycle in project management processes. Subsequently I will advice some kind of recommendation concerning suggestions in terms of using each organization type for some different variety of projects. 3

5 Keywords Project, Project Management, Matrix Organization, Functional Organization, Projectized Organization, Work Breakdown Structure, Project Lifecycle 4

6 (1) (2) 1. Introduction The area of Project Management fortunately does not simply contain a specific definition and explanation, because it has been enlightenment in various different approaches and manners, but the most common one used are the ones given by PMI (Project Management Institute), which defines the Project Management as the application of knowledge, skills, tools and techniques to project activities to meet or exceed stakeholder objectives and expectations from a particular project (2) and the other definition formulated by ISO which describes it as follows: Project Management is the planning, organizing, monitoring and controlling all aspects and activities of the project in a continuous process to achieve its planned objectives (2) Both of definitions specified above are accurate since they provide a clear explanation seen from different perspectives of what really this discipline is and what managers and leaders in general suppose to do in order to drive the project till the successful completion through predefined sets of activities. This discipline has been and continues to be applied in many different industries, rather than in specific one and not all of them manage it in the same way. Therefore, organizations based on their strategy they have, structure, service they provide and the method they perform, differ from each other the way they manage the projects, because of applying completely compatible project life cycles for their particular needs. The approach chosen by the organization on how the projects will be managed has extremely high impact, and it is very important for the organization since it is the key to the success. 5

7 (3) (4) (5) 2. Background Literature and Theory Despite the fact of being a modern discipline, its origin starts from the latter half of the nineteenth century, evolved mostly from the approach of how people used to organize and manage their work, especially when the business in the world started to develop into complex. In that time, people believed that the only method of improving the productivity was working harder and longer, in contrary according to Frederick Taylor analysis it was brought into the market the concept of providing more efficient work. Another significant person of the management principle is Henry Gant, who created the tool called Gant chart, which enables people to better organize and control their work. These two scientists are considered to be the father of scientific management. The management process mainly achieved its peak in the middle of the twentieth century where the two project scheduling models were introduced to managers for facilitating a control over complex projects. These two models are: CPM (Critical Path Method) is an algorithm for setting up activities for a particular project and PERT (Program Evaluation and Review Technique) which beside being a method and technique for better analyzing the tasks and activities, its main functionality is to evaluate the minimum period of time required to successfully complete the project. Subsequently, the area continued to improve and it reached the attention mostly when two non-profit organizations were created; IPMA (International Project Management Association) in 1967 and PMI (Project Management Institute) in They had a high impact on increasing the significance of various industries for managing projects. Both of them were mostly concentrated on increasing the knowledge, developing and continuously improving the Project Management area by providing different kind of services for managers and leaders; for instance professional education, books (Project Management Body of Knowledge), working guidelines prepared by experienced project managers, trainings and seminars held by experts, instructions given by qualified and skilled leaders, networking etc. 6

8 3. Project Management (6) (7) (8) Project Management is very comprehensive and attractive area, seen as a science or modern discipline. Furthermore, it can be considered as well as a matter of art to manage a project from the beginning, through the lifecycle till the successful closure. The discipline had a huge impact by its various significant benefits within organizations, influencing the business world. All this occurred by the result of concentrating through different outcomes such as: improving the customer satisfaction by increasing efficiency in delivering services. This can be easily identified by the objectives of this area, for instance: - recognizing additional risks, analyzing and making correct decisions by responding with a proper solution. This can be named as Risk Assessment; - ensuring the completion of the project within budget and time, by using specified resources; - having control of the project for facilitating the tracking of it; - increasing the quality; - improving the communication within the organizations; - the achievement of projects goals; - the most important objective is to simply ensure that customers specific needs and requirements are met, etc Project Management principally supports three related fundamental levels, and they are: Projects, Subprojects and Programs: Project: is basically created once, it is specific and temporary, undertaken by a member, team or organization. It is a unique process established to achieve or deliver an output, consisting of controlled and well coordinated set of 7

9 activities in line with cost, time and specific resources. In essence, it refers to a particular outcome in a kind of product or a specific service created and developed by a team which is run by a leader. Projects are not the same as operations; they differ from each other from the viewpoint of the functionality since projects are unique and temporary consisting of a beginning and the end, while operations are ongoing and repetitive with no start and end, Subproject: same as the projects, it is a temporary process, undertaken with the aim of producing an outcome, product or a service. It is basically a set of activities and work divided from a single project in case of it is a big or more complex. It is divided among more manageable parts which are called Subproject, in order to be able to better control, manage and facilitate the completion of it by assigning the right employees in the area which they are specialized and experienced. Even though they are split from projects, subprojects are mostly considered and treated like a project, Program: While the Project intends as an outcome to achieve a specific service or a kind of product, Program is a process undertaken to achieve a mission or a strategy. It contains several projects and ongoing sets of activities. It actually refers to multiple interrelated projects, in order to be able to improve as well as facilitate the general control and management within the organizations. This process of managing is known as Program Management. It is worth pointing out that in general Projects and Programs are not the same; they differ from each other, therefore the main and most significant differences between them are as follows: 8

10 Project: is temporary has a start and an end supports service as an outcome has a specified scope focuses more on the outcome Program: is ongoing activity has no beginning and no end supports strategy as an outcome can have a wide scope focuses more on the benefit The scheme how the Project, Subproject and Program are in general structured within an organization or company is as follows: Picture 1: Project Management Tool used: Project Life Cycle (9) (10) (7) (11) In order to be able to manage projects in most effective and efficient way for delivering an outcome or service, managers are going through an approach called Project Life Cycle. Each organization or company, or even 9

11 each manager can have its own way of managing or personal approach which may be differentiated from one other. The reason of not having a unique one is because it depends on the type of the project or the business it is needed. However, over time a standardized Project Life Cycle has been created, which is considered as a base for any decided approach by the manager or the leader. By this standardized approach, a manager can adjust it to his type of project or business. The mentioned standardized approach consists four significant interrelated phases which are: Project Initiation, Project Planning, Project Execution and Project Closure. Basically, a meaning behind this phase is: Start-Plan-Do- Close! However, there is another additional phase which is called Controlling. Actually, it depends on the manager or leader, whether he/she is going to consider this activity as a phase itself and put it as a separate one, or whether he/she will apply its functionality throughout the whole approach of the project. Clearly, each phase has different functionality, characteristics and is helping a leader to better plan the way he will manage the project, although from all of them it is expected to deliver a result which facilitates him or her to make a decision to further proceed or turn back. Except the fact of having a standardized way of managing a project, it is still not enough for delivering what is expected or being successful, and indeed a careful, detailed and analyzed planning is required Project Initiation (9) (10) (7) (11) The first phase of Project Life Cycle is called Project Initiation. This stage is considered as very significant and critical for its importance since a leader establishes the projects objectives and defines deliverables. In case that this phase is not analyzed and defined properly by the leader, it increases the risk of not succeeding, meaning of project failure or it may also occur to late delivery. The mentioned phase can be very broad and can contain numerous steps, however in the 10

12 following part the thesis concentrates on covering the most essential phases and steps in general. It is worth to point out that this phase is also subdivided into further steps: - Feasibility Study: This stage is the first stage that the leader performs after receiving the project proposal or after the project proposal has been sent. It means undertaking a detailed study of the offer/project/business case, analyzing the requirements and resources as well; identifying any kind of problem; estimating how big and how complex the project or offer is; foreseen a risk or issue that may occur, which can have an impact during the project life cycle and prioritizing them based on their importance; additional delays; building a plan in order to avoid the mentioned risks and issues; identifying and classifying a list of solution in case a risk or issue occurs; identifying the business environment and collecting the business information, etc. For all these studies and analysis, a document usually is prepared containing the outcome of analyses, with tables and matrixes. Afterward the document is presented and communicated within the Portfolio and Program level of the organization or company in order to evaluate it. A brief example of one of these tables that can be found in the document of the feasibility study, may be written as the instance given below for risks: Risk Probability Impact Action Description Instance 1 L/M/H L/M/H Action 1 Instance 2 L/M/H L/M/H Action 2 Table 1: Feasibility study (Risk Analyses) Risk Description: a brief description of a risk that may occur during the project lifecycle; 11

13 Probability: a probability that a risk may occur in future, usually is evaluated as follows: Low, Medium and High; Impact: a level of the impact that may have if the risk occurs, this also may be estimated by: Low, Medium and High; Action: A description of the solution, in case a particular risk occurs. - Projects Objective: In some organization this phase is called in different way, for instance: a mission or a vision. The manager in this stage first defines the objectives of the project. Clearly each project has a common goal: success, meeting and/or even exceeding the expectations within the time and within budget. However, apart from this, projects may also have other objectives to. Therefore, to better and easily identify the objectives, there are usually some questions answered by the leader such as: Why this Project? What is this Project? Is it feasible? What will be the outcome? What are the circumstances? What are the expectations? - Deliverables and Requirements: Apart of the above mentioned quantitative analyses the manager studies the deliverables and requirements to. They are stated in contracts, but sometimes it may not be sufficient to fully define all requirements. There is also another fact to be considered, whether the deliverable is a product/service or result because for each category there should be different analyses performed. However, for each type it is significant to be defined as much as it is possible. Of course, there are some questions where the answers given can provide us a clear picture for deliverables for instance: What is required? Is it new or existed? Where is the location? How many should be delivered? etc. As for Requirements based on the type of the project there can ban various questions, and from the outcome the manager defines the requirements by following step: Gathering, Categorizing, Validating and creating Requirements Baseline. When having all information in place, afterwards manager ensures that his or her team stakeholder, sponsors and everyone involved in the 12

14 team fully understand the projects objective. In order to avoid any kind of misunderstanding in future, usually managers writes it down and stores it as evidence. - Project Charter: Finally, after having all studies and analysis done and documented, also presented and discussed with the people involved in project, manager prepares the Project Charter. Beside the manager, also a sponsor can prepare this document. A sponsor is an individual or may be an organization that has an authority to ensure or delegate a formalization of agreement with the delivery. This document is an official document where the projects scope, objectives, rules, time, budget, requirements, framework and other information are clearly defined. This document usually is up to ten pages, based on the size of the project; sometime a verbal agreement is done for small projects but still it is recommended to have it in paper for future evidence. Project Charter can be structured in a different manner since it may vary on the type of the project and organization, but usually it contains the following sections: Project Purpose, Objective and Requirements, Description of the Project, Schedule, Budget, Resources; Project Manager, Team members and Resources. Usually after all have been analyzed, in order to make it fully certain, sale manager consults with the quality team and engagement team, to review again if the project is feasible, doable, and possible before they submit the contract with the client. - Assigning the Project: In this phase a leader takes the first step after performing a feasibility study, with reviewing, analyzing and also taking the motive under consideration of accepting the project. After having the result, a leader approves its launch and he/she confirms the right person responsible as Project Manager in order to drive it from the beginning till successful completion. Usually a decision is made by considering from one side how complex and big the project is and from the other side employee s knowledge, experience, capability and availability. Afterward the Kick Off 13

15 is sent, and the Project Manager can continue with the further responsibilities. However, there might be some situations when the Project Manager is part of the Project Initiation Phase from the very beginning. This has a positive impact and is effective since he/she is aware of the project, and when the Kick Off is sent there is no need of further analysis of the contract, he/she can immediately start with the next phase of the lifecycle. It is very apparent that the manager or leader should initiate very carefully and pay attention the mentioned phase since it may increase a risk to project failure, not to be successful, in time or within the budget, for instance: unforeseen risks/issues or in case the assumed solution for foreseen risks are not feasible, or not clear defining of requirements, resources or conditions, no clear communication which can cause a misunderstanding, etc Project Planning (9) (10) (7) (11) - Project Planning is the second stage of Project Life Cycle. It starts right after the Kick Off has been sent, and everything has been properly described. Project manager before establishing his/her detailed plan, he/she starts with his/her action as follow: creates the team through Team Member Selection and organizes meeting with the team member s in order to ensure that the team has all necessary information that will be needed in the future. Team Member Selection is not the same in every Organizational Structure. However, the thesis is focused mainly on the Matrix Organizational Structure and both of them will be explained later in detail. This stage is estimated with high significance because it ensures that the team has a clear and understandable view for the project, especially for the following parts: WBS, OBS, PBS, plan, financial plan, activities, tasks, durations, resources and many more information. The mentioned parts are used as a guide, reference or database knowledge by the project manager 14

16 and the team. This means that it gives them basically the management methodology and principle which is going to be used in order to achieve the objective and the goal. All these plans may be documented in one document, but it is recommended to create each one of them separately to be properly sequenced. WBS, PBS and OBS will be explained in a following chapter of the thesis. - Project Plan is considered as the main document. It is mostly used by the project manager in order to track the work and progress. He/she especially concentrates on two things: costs in order not to exceed the budget, and dates in order to ensure that the service/product/result is delivered no later than agreed time with the customer. It also helps to reduce constrains, uncertainty and avoid the misunderstandings. Beside that it contains the major phases of the project which are required to be undertaken also it needs to cover the below information: - Statement of work: can be also found in a different name, for instance: Work Defining stage or Work specifications stage, etc. however it is a formal document which is written by project manager with the main purpose of defining the scope of the work. To define the scope the following information must be issued and included in detail: the activities, location, tasks, dependencies, roles, responsibilities, duration, schedule, dependencies, financial plan, communication, approval etc. - Activities (Tasks): defines accurately what work are going to be done, what action is exactly going to be undertaken, the characteristics and the impact of achieving the outcome. - Roles and Responsibilities: provides clear information for each team member for what assignments they have been assigned, what are the responsibilities of each activity/task and what is expected from them to perform. Tasks are assigned to current stuff based on some factor: the experience, knowledge, availability and willingness. 15

17 - Duration and schedule: contains timeframe for each activity and task. For having a better structure, milestone can be used as well. Milestones are used to group the activities into one group. In order to easily track the schedule and control it, it is vital to have the following points: start date and end date of each activity. The sum of duration for each activity should not be later than the agreed time with the customer for delivering the requirements. However, it is not that easy as it may look to define the overall duration of the activities. There are a lot of factors that should be taken under consideration; therefore when setting up the duration and schedule, a deep analyze of everything should be taken: feasibility of completing the tasks, the amount of work, the dependencies, complexity, resource availability, etc. Beside the professional analyzes also the calendar should be part of analyze, meaning of public holidays, even weather, the absence of the employee, etc. A method which is used in this phase is CPM (Critical Path Method). This method is known and is widely used as a project management tool. It is a model as a network with nodes, which refers to activities and nodes which refers to start and end point. It is used mainly to predict the time required to complete each activity and the project itself. Another important characteristic is that it helps to identify which activities are critical, by finding the path which requires a longer amount of time. - Dependencies: there are four types of dependencies, which helps better understand the meaning of it: Finish-to-start (FS) means that the current task cannot start if the previous task is not completely finished. This dependency is very common in project management, Finish-to-finish (FF) means that the current task cannot finish if the previous one is not finished, however it does not mean that they have to end at the same time, Start-to-start (SS) means that the current task needs to start in order next task to start with the work, 16

18 Start-to-finish (SF) means that current task cannot finish until the previous one starts. This dependency is very rarely in project management in general. - Feasibility study: is been reviewed one more time, in more deep studies and analysis to prevent any constrain and avoid any kind of obstacle that may happen. Sometimes this part maybe called a Risk Plan, but still the resource is the same, the feasibility study which is performed in detail during the initiation phase of the project. - Financial studies: these studies are performed after having all information for activities, tasks, resources, duration clearly identified. It contains a list of the expenses for each member of the team, equipments, administrative costs, etc. It may also have a schedule of when and what will be paid. After having the price for each expense, a total sum is being calculated in order to simply check how much will be spent to finish the projects. A simple example of how the evidence of each project member and/or equipment maybe calculated can be found below: Role Project manager IT specialist Administrator Total price Unit cost Cost/hour Cost/hour Cost/ hour Amount Equipment Unit cost Computers Furniture Materials Total price Cost/item Cost/item Cost/item Amount Table 2: Members cost Table 3: Equipments cost Tool Used: MS Office 2010 Tool Used: MS Office Communication plan: is about the internal communication and a communication with the customer. The internal one is usually scheduled by the project manager with the team and portfolio manager. These communications are usually done with meetings and are highly significant for the project managers since even they have everything in place, they cannot simple assign the responsibilities to the team members then to sit and to except what is required from them 17

19 for achieving the goal. He/she has to be continuously proactive by tracking the work and progress for having a better control. This can also have an impact of motivating the team. In every meeting, a certain topic is discussed based on the phase the project is. The communication with the customer is also important since the client has a high focus on the requests and the requirements, and above all because they are paying and that s why they are willing to be informed, therefore a meeting is held to inform them regularly about the current status, project activity and tasks status, the progress meaning of what has been done, and what are the next steps, or in case there is a proposal change to provide the information, etc. Usually every communication is being saved to have it as evidence that what was exactly discussed at the certain time and place. In some organizations, you can find it in some platform which can be called as follows: MoM (Minutes of Meetings). - Approve Project Plan: after having the document prepared, it is sent to portfolio level, which is reviewed and approved. This approval includes the authorization of budget and work to begin with the work. It means a negotiation of the project manager with the portfolio or organization level to approve the budget (amount of money) and resources to allow the team to spend for specified activities within the given period of time. This approval varies depending on the type of organization, it can be simple verbally agreed or it can be officially documented. For instance in Matrix structure organization it is officially documented instead of verbal agreement. The reason is because it is considered as a contract of work and is supporting the sub-projects. Basically, the project manager is in the middle and is like a bridge of communication between the organization and the team. He/she has to convenience the organization for getting the approval and then is responsible to allocate it to the team, meaning that he/she has to ensure that the team has everything necessary and what is needed to perform their work and what is expected. After having this authorization approval confirmed, the next stage can be running. 18

20 (9) (10) (7) (11) Project Execution Clearly this phase takes more time and more energy than any other phase. In this phase, it is time to perform everything that has been analyzed, studied, documented and approved. Not only this, but also to track, control and ensure that everything is going towards the right path. - Time Management process performing: this process helps the manager to increase the possibility of delivering the outcome, facilitates the monitoring and tracks the current time spent against the planned time to be spent. Not only time, it also helps to check the current status of the activities and tasks performed, the ones that are completed and which ones are about to complete. Beside this, a manager can also record information collected during this process. For the record, the following tool is used: Timesheet. Usually it is completed on a weekly basis, for having a weekly status of the work performed by the team. - Cost Management process performing: this process helps the project manager to control the expenses which are being recorded from the team member by using the following template: Expense Forms. It basically gives a clear and accurate view to the manager with the following information: amount of money spent for each activity, the date when it occurred, the type of the expense, etc. The expenses usually are approved before they are purchased and are registered by the manager for having evidence through Expense register log. - Quality Management process performing: The purposes of this process it to initiate the continuous increasing or improve the quality of the team s deliverables. This is very critical since the manager will have a control of the quality of the target which should be accomplished. - Change management process performing: not all the projects are being performed successfully from the beginning till the end as planned and because of that it is very rare that the change management is not being used. The reason is that unforeseen incidents almost always occur. Even that everything may look perfect in the beginning, still during the project phase it is very likely that a problem may raise or a 19

21 better way of performing the activity may evolve. For not experiencing bigger issues the project should be flexible to adjust to a particular change. Change management is usually agreed with the customer and is being written in the contract. It contains the condition on who can request the change, timing window and the change template. It is actually in companies favor, because out of this change they can benefit from it by receiving another profit. Every change is recorded with the following information: requestor, time, reason, solution, etc. The managers should be very careful when they accept change since they should ensure the change do not impact the scope and the time of the project. - Issue and Risk management process performing: is also very critical. The main purpose is about identifying, monitoring, solving and mitigating anything that may affect the project. The analyses are undertaken during the Initiation phase, therefore when a foreseen risk or issue appears a solution is in place. However, it can appear in any phase of the project lifecycle and in case an unforeseen risk or issue is being identified than it should be immediately raised, registered, analyzed, solution or action should be find, approved and then applied. - Communication management process performing: as the process stated above, is about having regular meetings, preferably weekly, in order to be informed with the following information: the work, process, schedule, etc. It should be managed and registered by the project manager. - Project review process performing: may be performed by the end of each phase, in order to have the accurate results of the actions undertaken and produce the result to the portfolio level. Usually the reviewers are some independent skilled persons outside the current project in order to review it more objectively. (9) (10) (7) (11) Project Closure Project Closure stage is the last one of Project Life Cycle. When the result, product or service has been successfully delivered to the customer, it means that the 20

22 project should have accomplished the objective. However, this does not simply mean that the project manager has finished with his duty; therefore there are some further steps that should be taken from his side: to perform the closure of the project. This action requires time and budget, but still it is very significant since it is the evidence of what and how was performed, later the level of success of the project can be reviewed by the third party, can be taken as a reference for other managers, especially for the new ones to improve, develop and gain new knowledge. As all phases, also this part is subdivided into further steps: - Documentation of Project Closure Report: this document is usually prepared by the manager, submitted by the project sponsor and then is sent to customer for agreement confirmation. The very basic closure document contains a detailed description of what was the objective, including: the request, deliverables and benefits; than information of what actions were performed, which is the most vital: activities performed, risks and issues, what solutions were taken to overpass the problems; also information about the expenses, schedule: when the project started and when the project was closed. Nevertheless a detailed closure document may contain all information in detail regarding the project, beside the ones that were mentioned above, it may include also: resources, team members; change management: in case a change was needed to be taken, also communication which was performed with the customer, etc. - Customer agreement request: after completion of the mentioned report, it is the moment to send it to the customer, to review the project report and to confirm the agreement. After receiving the confirmation from the customer, the manager finally informs his/her team and everyone else that was associated with the project. - Lessons learned: this information is highly important and it is also documented. In companies, usually a meeting is held to discuss with everyone regarding the lessons learned from the particular, or a questionnaire may be send to the team. This document contains the following kind of information: What went well in project? What could have been 21

23 done better? What went wrong? How the issues/risks could have been avoided? What are the recommendations? The purpose of this document is that it can be later used on new or similar projects. - Archive data: finally this is the last step that should be performed by the project manager. After having all information collected, sorted, written, maintained and documented, than he/she follows the company s processes, procedures and rules to archive the data in order to protect the information. It is not common, but it is worth to point out that after all mentioned actions are performed, there is another additional stage: PIR meaning of Post-Implementation Review, usually done by portfolio or program level of the company. The endeavor has a single aim, to do the overall assessment of the success of the project and especially the manager s work, by deeper analysis of benefits realizations, objectives achieved, time management, risk and issue management, what was achieved, etc. Cycle. Below is given a picture (nr: 3) of the Project Life Picture 3: Project Life Cycle Tool used: Paint. 22

24 3.2. Project Decomposition Decomposition is known as a hierarchical structure or subdivision of project deliverables (products), staffing resources and work into smaller components, with the intention of better managing. This is also known as breakdown structure. There are three different types of decomposition: Organizational Breakdown Structure (OBS) which answers the question: Who? ; Product Breakdown Structure (PBS) which answers the question: What? ; Work Breakdown Structure (WBS) which answers the question: How? Product Breakdown Structure (6) (12) (13) This kind of decomposition focuses on structuring the deliverables into components. It gives a clear understanding on what is going to be delivered, actually what is needed to be delivered in order to achieve the project s goal/s. PBS is required to facilitate project manager s work to identify all work products, establish logical relationship of building collocation and to develop the WBS. By this we, understand that PBS precedes WBS. Usually, when the PBS is created the final product is put in the top of the structure or hierarchy and then is subdivided into categories and/or elements of the project deliverable. Below is given a picture (nr: 4) of Product Breakdown Structure: Picture 4: Product Breakdown Structure Tool used: 23

25 Organization Breakdown Structure (14) (15) Organization Breakdown Structure (also known as Organizational Breakdown Structure) illustrates the responsibilities of activities of the individuals working on a particular project. This form basically describes the team structure of the project organizational unit and department. It also facilitates the understanding of the following points: the relationship of projects with subproject and relationship of the reports within the organizational units. Below is given a picture (nr: 5) of Organization Breakdown Structure: Picture 5: Organizational Breakdown Structure Tool used: Work Breakdown Structure (6) (16) (1) This variety of decomposition is the most known and the most used one. There are different definitions of it however Project Management Body of Knowledge (PMBOK), defines the Work Breakdown Structure as follows: a deliverable oriented hierarchical decomposition of the work to be executed by the project team. (6) Work Breakdown Structure is considered as a vital step and it is established during the initial phase of the project, right after the scope is identified. It represents the work as an 24

26 activity and also ensures that the project contain all the required work to successfully accomplish the defined project objectives. Project Manager creates the WBS for different related purposes: to define the hierarchy of the deliverables with the frameworks, to provide a better understanding of a project scope through graphical draw and/or textual sketch, building a system to assess and integrate the performance of cost and schedule, facilitates the reporting organization. All these functionalities help the project manager to track the status of the project s progress. Below is given a picture (nr: 6) of Work Breakdown Structure: Picture 6: Work Breakdown Structure Tool used: Project Organization This part of the thesis elucidates the following three major organizational forms for projects: Functional Organization, Projectized Organization and Matrix Organization. However, it will mainly focus and concentrate on the third organizational type. 25

27 (17) (18) Functional Organization This type is known also as traditional category of organization. Over the past years, it has successfully accomplished the requirements with satisfactory control and minor issues. Nevertheless, as recently the business developments rapidly changed in terms of technology improvements and nowadays needs including the increasement of stakeholders demands, have created serious weaknesses. The mentioned aspect means that previously organizations could endure with even one or two product lines, but, as time went through the experts came to a conclusion that this survival depended on a following so called factor diversification, which means having multiple lines. However, as the organizations developed the companies noticed that the activities unfortunately weren t effectively integrated and it caused in increasing of issues and conflicts. This was the motive of inventing the newer and better organizational forms which will be explained in the following part. This variety of organizational form has some advantages such as: the functional manager establishes the budget of the projects and after approval from the upper line has a full control over it. The responsibility is clearly defined and channel of communication is well planned since employees report to a single individual. This feature also helps the functional manager having a good control and overview over the team members. Beside the good points, unfortunately there are some negative aspects of this type of organization as well. The most significant one is that there is no client focal point. In this organizational type usually are several layers between the customer and project thus, this characteristic causes a slow response to customer s needs. Decision making processes are usually slow since there is no member directly responsible for the ongoing project and the top level management is involved in daily routine work. This tends to decreasement of motivation for employees. Also, project managers work more as coordinators since the functional managers have authority. 26

28 Below is given the picture (nr: 7) of the Functional Organization: Picture 7: Functional Organization Structure Tool used: Projectized Organization (17) (18) Nowadays this organizational kind is mostly used by the companies. It is known for the fact that the project managers maintain full authority for ongoing projects after the authority has been given by general manager. Having the full control and overview of the project means that team members of the project are directly responsible to manager of the project. This method of reporting and communication has a significantly high impact on establishing the communication channel within the team. This kind of strategy leads to quicker decision making process which makes the project capable to react rapidly for new customer needs and demands. When it comes to the perspective of analyzing the other view for this kind of organization, unfortunately there are several negative points of it. When this form is applied and 27

29 implemented especially in a company which is multi-product, running several project in the same time, it will be expensive to cover all the expenses. The reason is that each one of the running projects should be fully staffed. Individuals are assigned to a single project, therefore there is no space and availability of sharing individuals for reducing costs. This leads to duplication of the personnel. Although, another fact that should be consider is the availability of facilities and equipments. The conflict may arise if there is a situation where the same equipment is required in the same time for two or more different and/or not related projects. In this situation the upper level of management decides which project to use it first based on the several aspects: impact, importance, priority etc, or another solution is duplication of the facilities which will increase the cost. Further weak and worrying point for individuals of the team is the career continuity and opportunity. Below is given the picture (nr: 8) of the Projectized Organization: Picture 8: Projectized Organization Structure Tool used: Matrix Structure Organization takes part in the following of the thesis as chapter. 28

30 4. Matrix Organization The following part of the thesis contains the focus and the concentration on the Matrix Structure Organization. In the beginning the literature review will be enlightened, afterward it will be followed by the interview made with individuals, who are part, actually have experiences in such structure and analysis done of the outcome from the interviews. (19) (20) (18) (21) 4.1. Literature Review This kind is a blend of two mentioned organizational forms: Functional Organization and Projectized Organization. It has been established with the idea of combining the advantages of the two mentioned structures and creating a single form which will deliver higher efficiency with minimum risk. However, it is worth to point out that even this form does not provide the perfect solution for organizations that are implementing it in their business since there are several challenges in general that they are experiencing. This sort of organizational structure was first incorporated by huge oil industry, large car manufactures, high-technology companies, such as NASA, etc. They had to adapt to such a structure, for improvement and facilitation in order to deal with the customer s increasement demand. There are two cords of ordering (commands) in Matrix Structure Organization, which are known as vertical and horizontal. When a draw of this organizational chart is made in blank paper, it results to a matrix form and this is the reason why it has been called in this approach. The vertical line represents the operations and deals with issues related to the project whereas the horizontal line represents the functional division and therefore deals with the problems directly related with it. Each project in the vertical line of the organization has an individual responsible as Line Manager for a project which is usually temporary and in the other side also each functional division has an individual working as Functional Manager whereas this line is permanent. 29

31 The figure given below nr: 9, demonstrates a clear view how classical Matrix Structure Organization resembles. However, it may differ in terms of how it is implemented in certain organizations and/or companies depending on their business need, but they all are based on the instance given below nr: 9. In some organization and/or company, an individual may be hired with the following position: Program Manager, whose responsibility is to have a control over all running projects. Below is given the picture (nr: 9) of the Matrix Structure Organization: Picture 9: Projectized Organization Structure Software used: SmartDraw ( The job s responsibility of the functional manager and line manager is different but very crucial for making the Matrix Structure efficient within the organizations and/or companies work. Therefore, their collaboration should, actually must be in high and professional level. Another fact which should be taken under consideration for making the 30

32 collaboration effective is that their roles and responsibilities should be clear and fully understood by each and everyone within the team. However, their task may be depended on how the structure is applied and implemented, but their general tasks are the same. In general the main responsibilities of the functional manager in Matrix Structure are the following: ensuring the project meets the objectives, controlling of scope, budget as well schedule, monitor the progress and improvement of the projects, supervising the project resources, organizing meetings with the client and stakeholders, etc. In general the main responsibilities of the line manager in Matrix Structure are the following: ensure the resources and data for the projects, maintain technical excellence for project managers, controlling and managing technical stuff, organizing trainings for project team members, participating in meetings with project managers for information purposes, etc. It is very common that functional managers put the line managers under big pressure to ensure more resources for the project. The reason is that functional managers somehow depend on line managers to meet the project objectives, since they need the right resources and equipment/technology. Furthermore, considering the perspective of the vision, it differs between them since the functional managers are focusing on the project itself only, which means they are concentrating on the short-term goals, while on the other side the line manager are concentrating on the long-term goals because they are part of permanent division within the structure. 31

33 4.2. Interview Procedure The interview was conducted with the selected employees only from IBM GSDC (International Business Machines - Global Service Delivery Center) located in Brno, Czech Republic. The selected employees were based on the following conditions: having knowledge and being familiar with the matrix organization structure, as well having experience more than 4 (four) years in such structure and being part of different business area and/or background, such as the following profession: Project Manager, Portfolio Manager, Transition Transformation Manager, Project Coordinator, Project Administrator, Team Leader, Contract Business Office and Cost Manager. The questions prepared were the type of Semi- Structured Questionnaire and consisted of 10 (ten) questions in total. The interview was conducted through face to face method when available, or with the use of the following application: Skype. Another application used during the interview was Voice Recorder. The target of the participants was 20 (twenty), but because of the following phenomenon: Saturation of Data, which means the information were almost the same and no new information were given by participants till the number of 15 (fifteen), therefore the total number of participants in the interview is 15 (fifteen). Below the schedule of the interview can be found: The Interview had two parts: First Part contained questions about the Matrix Structure Organization. 1. Do you understand what Matrix Structure Organization is? How? 2. What are the advantages of Matrix Structure Organization? 32

34 3. What are the disadvantages of Matrix Structure Organization? 4. Line Manager and Functional Manager! How do you see the importance, authority and co-operation of these two lines in Matrix Structure Organization? 5. Having two bosses and dual reporting? What s your concern on this point? Second part contained questions (except the last question) about the projects in Matrix Structure Organization. 1. Who decides if the Project is going to be taken? Is the Project Manager involved in this phase, or the project is given after the decision has been made? 2. Resources! Who creates the team after the KICK OFF is sent? 3. What is your opinion about Decision making? Is there any procedure? 4. How the projects are run in Matrix Structure Organization you are part of? 5. Do you like being part of this structure, or you would like to rather change it? 33

35 Questions related to Matrix Structure Organization 1. Do you understand what Matrix Structure Organization is? How? The experience of being part of Matrix Structure Organization for couple years has given a great opportunity and a chance to learn and having an understandable overview for individuals, however not an expert. On the question of understanding the structure 100% (out of 15 interviewees) has answered with: Yes! When it comes to the perspective of how the individuals see and/or understand this structure, 80% (12 out of 15) of interviewees answered that: this structure means having two lines of managing: functional line from one side and projectized line from the other side, and the rest 20% (3 out of 15) of interviewees consider this structure as resource sharing flexibility. 2. What are the advantages of Matrix Structure Organization? When this point was discussed during the interview with the participants, there were few related facts mentioned by them which consider as good-points of this structure when implemented, nevertheless the first thing that was considered as a very beneficial and highly crucial pointed out 60% (9 out of 15) of the interviewees for the good of the business of the company was the Utilization of resources. Therefore, matrix structure is very flexible in terms of sharing the resources among business units. This means that this structure facilitates a single resource or more when available to have the opportunity to be shared among the teams for a certain business reasons and if needed to be partially assigned to several projects running in the same time. This opportunity in some point eliminates the need of hiring new individuals for short-term for a particular project and also brings several benefits for companies who are 34

36 applying this organizational structure, especially for individuals in terms of: learning by sharing practices and experience, professional development by exchanging information, knowledge, advancing soft skills by communication etc. Furthermore, the managers can create the team by available resources for a particular project in a shorter time, while this structure enables the resources to move quickly when they are available so by that the work can start immediately after the Kick Off of the project is being sent to project manager, whereas if you consider hiring a new individual, a manager will need to spend additional time and effort such the following: doing the necessary administrative paperwork, getting familiar with the environment, getting all required accesses, having the so called transfer skills period, passing the trial period and so on. The procedure of assignment of the resources in the project is a broad topic. It brings some good and bad points, however the disadvantages of this will be subsequently enlightened in detail. Communication among the business units has been noted by 40% (6 out of 15) of interviewees as another benefit which Matrix Organization Structure brings to the business of the organization who are implementing it, in this case IBM. The participants consider this factor as quite beneficial for the strategy of the company. Beside the fact that the teams can learn from each other some tips and tricks by sharing knowledge and experience, it also has an impact on avoiding in the future any kind of conflicts which can damage the company s business or can lead to the failure of another project. To better understand the above instance of the advantage a great example has been given by an interviewee which can be found below: V.L. (Transition and Transformation Manager): the organizational units communicate to each other and that s a great thing which this structure enables us. By this we can avoid the mistake that Motorola did in past. They used to have 35

37 Projectized Structure and what happened is that they had different units and each unit was working independently on their work so they had wireless division which were working for walkie talkies, CBA radios and there was a division that was working on phones, etc. They worked as independent units and never really spoke to each other and what happened in the end is that they started to making products internally so the phone unit actually made a cell phone that was also walkie talky somehow and they crashed the business of the wireless units, since they developed a product which was easier to use and more functional. Below is given a picture (nr: 10) regarding the statistics of the answers given by the interviewees for the current question: Advantages of Matrix Structure Organization 60% Utilization of resources 40% Communication Picture 10: Advantages of Matrix Structure Organization Tool Used: MS Office What are the disadvantages of Matrix Structure Organization? Throughout the discussion of this question with the participants regarding the disadvantages of the structure, they expressed their concerns they have experienced during their work experience. However, one of the given answers which 36

38 can be found below is considered to be quite interesting and significant: D.C. (Project Manager): With Matrix Organization you have more details which is good, you know exactly who is doing what and who is responsible for what, but that creates a biggest problem, because you have the limitation: this is my job I don t do that, talk to the other guy; the other guy says: I am doing 30% but the third guy is doing the rest of it therefore talk to him, and sometimes is never ending By given the mentioned standpoint by D.C., it is clearly understandable that matrix structure organization contains quite lot employees, which means too many resources involved. This can cause difficulties such as: trying to find certain information; making any kind of decision might be challenging since the responsibility are shared; slow feedback response, etc. Another fact obtained from the mentioned answer by interviewee is that this structure is very well structured, organized and contains supplementary details of who is doing what. This is very efficient especially for any newcomer in such company since he/she can easier find any information required or even desired. However, as pointed by the D.C. having such well structured structure, brings a limitation to employees. They might not take a decision in case they are not fully committed and if they don t have full responsibility. In this instance, it can lead to the fact that resources might concentrate more on their own responsibility instead of working as a team. They might fully concentrate on their own duty and what have to deliver and not to see it as a whole project. This means that each one of the resource can have his/her own understanding and perspective to the request which they receive from the customer. Therefore, my suggestion in this instance is that the project manager is the one who should be more active and lead the team as unique. 37

39 Moreover, he/she should pay attention and be careful when explaining the project, what is written in the contract and should ensure avoiding any kind of misunderstanding or confusion. Limitation as briefly mentioned previously was pointed out 46% (7 out of 15) of interviewees as another disadvantage of the structure. Having very well structured organization does not allow employees to do work above the boundaries of their responsibilities because in this case they will take someone else s duty. Unfortunately in some occasions this can have a negative impact. A simple illustration is given bellow to better understand the fact specified above. The instance is not related to the business of IBM, but is a simple explanation on what means to have limitation to work, the risk and impact: Imagining having situation when there is a fire on the next door and a person recognizing situation is not responsible for calling the Firefighters. While looking for the right person to make a call the flame is rising continuously and so does the damages. After the person who is responsible for making a call arrives and makes a call, and while waiting for the Firefighters to come to the place still flame and damages are rising, and the ones who are waiting are not allowed to make any kind of endeavor to stop the flame and avoid the further damages. Two bosses and reporting was mentioned 86% (13 out of 15) by interviewees. However this concern is part of the question nr: 5 (five) and will be explained in detail in the following part of the thesis. No Continuity, the team changes a lot is a further concern given by another Project Manager B.B. What does he means by that? The fact is that in Matrix Structure Organization when a project is done, the project manager is assigned to another project and this does not mean that he/she will work with the same team that he/she had before. The new available resources will be assigned to the current project. This however could be a negative thing since the team members 38

40 will need time and additional effort to better know each other and build the effective relationship. Also the project manager can invest in any resource more, but in the future he/she might not have the opportunity to have the desired resources for some time. In some cases people may like it since it is more dynamic, flexible and active experience but in the other side people try to be more stabile and the Matrix Structure Organization does not allow such a thing. However considering the business it might be more effective having a stabile one. Considering the opposite perspective, not just changing the resource, but sometimes there are instances where a project manager changes suddenly. The interviewees pointed out the anxiety of this instance since the new manager brings new priorities and changes within the team and in this situation the resources should be flexible to adapting to a new system. The resources are not satisfied to experience this kind of changes in their work. One of the given answers by the interviewee can be found below: S.V. (Contract Business Office): I am here for long time, almost 6 years, and through this time I had 5 Functional Managers and 4 People (Line) Managers, and each time I had to adjust to their way of working and each time I had to report each way the information they wanted from me and I find this difficult and also frustrating Assignment of the Resource was mentioned as another anxiety from 60% (9 out of 15) of interviewees. Even though they consider the flexibility of the assignment and sharing of resource as one of the best advantages of the Matrix Structure Organization, however in practice it brings to them some headache. The fact is that it does not allow the project managers to have the resources they want but the ones that are available in a pool. Sometimes the available ones may not be in the level of experience, skill and knowledge required therefore in some cases they go through some additional training or special education. However most likely what is happening is that the leaders consider the priority and 39

41 importance of the projects and based on this they assign the resources they have in the pool. Virtual Teams has been mentioned from 46% (7 out of 15) interviewees as disadvantage. Usually, Matrix Structure Organization is applied and implemented in huge companies, because it requires a large number of resources. Analyzing the companies that have this structure in their business usually are the big ones and they have centers in different places of the world, so does IBM. The service delivery center is centralized in different places and sometimes the available resources might be in different centers. What is happening in the delivery center of IBM in Brno is that sometimes resources might be in a different geography and this brings advantages and disadvantages as well. The advantage is that there is a solution in place if the resource is available in another place and there might not be a need of hiring a new member or taking external resource. Nevertheless bringing the resource to one center costs additional expenses and time, so that s another disadvantages. If there is no additional cost than the resources perform virtually and this brings several pain point, for instance the differentiation of time zone (GMT) or it can lead to slow feedback response etc. What IBM does to enable the team to be more effective is that in this case of virtual team the project manager organizes the Kick Off meetings face to face, which means brings the resources to the best center based on the location they are and organizes the first meetings together, so by that the team members have the opportunity to better now each other, and together they create the communication matrix that they are going to follow. Below is given a picture (nr: 11) regarding the statistics of the answers given by the interviewees for the current question: 40

42 Disadvantages of Matrix Structure Organization 86% Two Bosses 60% Assignment of Resources 46% Virtual Teams 7% No continuity 7% Limitation Picture 11: Disadvantages of Matrix Structure Organization Tool Used: MS Office Line Manager and Functional Manager! How do you see the importance, authority and co-operation of these two lines in Matrix Structure Organization? In Matrix Organization Structure, functional manager and line manager are the main actors, since they represent the streaming of managing two directions of the organization. To understand the importance of two them, the responsibilities should be known by employees who are part of it. It was the same case with the participants. However, they had a clear view and understanding of the activities that they perform within the organization s they are. 67% (10 of 15) of interviewees have given the same name to line manager. They consider him as capacity manager, the one who is responsible to see if they have enough capacity for the line he/she is supporting and to ensure that they have the required capacity to perform the work. From the answers of the participants are obtained the following responsibilities in real practice of the Line Manager who is part of the Matrix Structure Organization: the one who is responsible for resources and as mentioned ensuring the 41

43 capacity for the projects; 73% (11 out of 15) of the interviewees believe he/she is responsible for the salary payment of the employees and as well responsible in terms of the one having high an impact on confirming the promotion for the employees for higher salary; position as for the salary, also the one having impact of confirming the promotion for employees in term of getting to a higher position within the company; responsible for performing paper work and administrative activities; another vital duty is the improvement and development of the employees by ensuring and offering trainings, mentoring and different kind of education; checking claiming of hours and over times, as well as the holidays of the employees is another activity expected to perform from the line manager, etc. 53% (8 out of 15) of interviewees have called the Functional Manager with the following name: Business Manager, considering that he is the one who directing the business of the company. From the answers of the participants are obtained the following responsibilities in real practice of the functional manager who is part of the Matrix Structure Organization: responsible for the business and the functions; the one who is giving the work to the employees and organizing what should they be doing and what are excepted to perform and deliver from them; another perspective explained is that Functional Manager is the one who is using the resources in a best way to get a certain job done; responsible for giving business directions to the resources and planning what is next; responsible to help and facilitate certain issues in case the resources are experiencing anything which prevents their work and activity; responsible to find out together with the employees their weak points and giving directions to them how to develop and/or improve, etc. On the discussion of the importance, expectedly all of the participants estimate the two of managers with high significance, since clearly they are the ones who are managing 42

44 from one side the people and from the other side managing the business. However, regarding the authority the participants could not distinguish between them and as a conclusion it came to a point that the authority is shared. From this illustration it is understood that the Matrix Structure which is applied in IBM is balanced. Regarding the cooperation of the functional and line manager, 93% (14 out of 15) of the interviewees have answered that even they have different interest, in some point they cooperate in terms of the business and the good of the company and they consider it as very crucial for business beneficial and good atmosphere within the team. On the other side 7% of the interviewees which in this case only one (1) out of 15 (fifteen) of the interviewees which was Cost Manager (S.W.) answered that from her own experience they don t cooperate as expected and they only concentrate on the scope of their work. S.W. believes that sometimes the cooperation depends on the people; however she thinks that they should cooperate. Below are given pictures (nr: 12 and nr: 13) regarding the statistics of the answers given by the interviewees for the current question: 43

45 Perspective Cooperation 67% Capacity Manager 53% Business Manager 93% Yes 7% No Picture nr: 12 and nr: 13: Perspective and Cooperation of Functional Manager and Line Manager Tool Used: MS Office Having two bosses and dual reporting? What s your concern on this point? As mentioned in the second question having two bosses and dual report has been pointed out by 86% of the participants of the interview and it is seen as a crucial point for them. In Matrix Structure Organization individuals have two bosses and this means that necessarily it is required from them to report twice and this means a dual report and/or dual effort. Theoretically is said that it might cause confusion to whom what exactly to report or from whom what to expect. However in IBM this confusion has been solved by having the Document of Understanding or by building the Matrix Communication. In these documents are clearly described the roles and responsibilities, scope of the work has been clarified, to whom what should be reported has been written and the managers know from the resources what to expect. Everything in the beginning is agreed, planned and understood between the resource and the manager, therefore there shouldn t be any problem, issue or confusion, and in case there are, they should 44

46 go back to the agreement and clarify the situation based on the agreement. However, the concern was not the confusion of the report, but having two bosses. It means that each boss, in this case Line Manager and Functional Manager, have their own priorities which might be different, so the resource is in the middle and needs to satisfy them both, meaning satisfying two different requirements. Sometimes resources cannot fully satisfy them, when the priority of one manager can be lower than the priority of the other manager. Unexpectedly, on the additional question: Who do you consider as more important: Line Manager or Functional Manager? 93.3% of (14 out of 15) participants consider the Line Manager as more important since they believe that they are the ones who can have an impact on the assigning to a higher position or for higher a salary etc, and 1 (one) of them consider the Functional Manager as more important. She answered with the following answer: R.D. (Cost Manager): I see my Functional Manager as my boss and I am more in contact with him for the work therefore I learn a lot from him and that is the reason why I consider him as more important. 45

47 Questions regarding the projects in Matrix Structure Organization 1. Who decides if the Project is going to be taken? Is the Project Manager involved in this phase, or the project is given after the decision has been made? On the discussion of this question 26.5% (4 out of 15) of interviewees didn t know the answer who decides if the project is going to be accepted or not, while the rest had an opinion on it. 47% (7 out of 15) of interviewees answered that there is a so called: Steering Department responsible for decision of taking new projects and 26.5% (4 out of 15) of interviewees answered that Functional Managers is the one who is responsible to decide if the project is going to be accepted. The differentiation of the answers regarding the question by 11 interviewees is the perspective how they see the projects. The fact is that in the business of IBM who are applying the Matrix Structure, there are some small requests received from a client which are treated as projects and are called RFS (Request for Service), and in this case the functional manager which can be Portfolio Manager, is in contact with the customer and makes a decision the of the nature of the request. Therefore he/she decides if the request is going to be taken and afterwards he/she assigns the RFS to the right available project manager he/she has and sends the Kick Off. On the other side, in case there are bigger/complex projects or new customer coming to a business than it s the instance where Steering Department takes place. In this situation the negotiation or it can even be called as well Initiation Phase, is being performed by people who are responsible for it. Based on given information Steering Department is a board with some experienced, skilled and well knowledge employees who are able to perform professional and as well high level of negotiation with the client. On the additional question whether the project manager is involved from the beginning, Negotiation/Initiation phase, the interviewees had the same answer, that it depends on the instance, but however in general cases they are not part of it. 46

48 The project is being approved and then Kick Off is sent to them. Nevertheless, my suggestion in such instance would be that the project manager should be part of a negotiation phase, or to know what is likely to happen, or at least they should be informed in advance. Imagining the situation of not being part at all and receiving the Kick Off might require additional time to understand the contract and what is written. If he/she does not understand something then needs to go back to portfolio manager to ask and so on. Sometimes the biggest problem is that the project manager understands what is written but does not fully understand what to deliver in the end and requires clarification. The main aim of the mentioned point is that sometimes the project manager would need additional time before he/she starts with the work because of not being involved from the beginning. Below is given a picture (nr: 14) regarding the statistics of the answers given by the interviewees for the current question: Who decides if the Project is going to be taken 26.5% Don't know 47% Steering Department 26.5% Functional Manager Picture nr: 14: Who decides if the Project is going to be taken Tool Used: MS Office

49 2. Resources! Who creates the team after the Kick Off is sent? The creation of a team is considered to be highly crucial since the members are the ones that will drive the project with their performance. For that reason the current question is part of the interview to find out how it works in an environment with Matrix Structure Organization. Participants have answered that after the Kick Off is sent, it is the responsibility of project managers to create the team. In fact the portfolio manager selects the project manager and then is the activity when he/she is assigned. This activity is going through an official procedure which is called: Resource Deployment Request (RDR). In this process the project manager provides information about the resource needed. The request contains a clear requirement of what type of resource is needed, the level of knowledge, skills, experience, and how many are required. Also there is additional information on this request which is the band of the employee. The band is a number, actually seen as a coefficient of the employee which is obtained based on the experience and knowledge the employee posses. The number of the band reflects the quality of the employee i.e. the higher the band the more qualified the employee is. This request is raised to organizational line. It needs to get approved by several levels and then it goes to delivery organization. Afterward they check the request and provide the information to project manager about the candidates they contain. After receiving the information he/she checks the candidates. In some instances interviews are organized and the candidates are selected. However, the explained procedure is more likely about the resources that are available, and this is the ideal situation. In real practice it is more challenging. The fact is that there is never enough resources for everything that it is needed to be delivered. What occurs is Prioritization. The company prioritizes the most significant and most beneficial projects. One of the answers given by the interviewee enlightens this: 48

50 V.C. (Project Manager): we cannot do everything since the resources are limited and have to be dedicated to the most important activities in company. There might be times when the projects that are going needs to be stopped, or postponed or even not executed and somebody obviously will not be happy about it. Therefore, as explained by the interviewee that there might be instances when ongoing project might be stopped or postponed, the resources that were assigned will subsequently change the assignment and they will be part of another team, fully or partly assigned, it depends on the situation. This is sharing of resources and flexibility of the resource utilization that Matrix Structure Organization enables to the company. A different perspective has been given by one of the interviewee for the explained instance: D.C. (Project Manager): Team creation to me is like playing chess. We assign a resource 0.2 FTE to one project and 0.8 FTE to another project, than one employee can be even part of three projects, and rarely are cases when a resource is part of a single project for 1.0 FTE Mentioned FTE by interviewee means Full Time Equivalent. It describes how much a resource is assigned to a particular project. 1.0 FTE means a resource is fully assigned, 40 hours per week, or it might be assigned to two different projects which mean 0.5 FTE for each one which is 20 hours per week, and so on. 3. What is your opinion about Decision making? Is there any procedure? The question prepared for the participants regarding the Decision making process was found broad and for that reason it has been divided in two parts: 3.1. Decision making related to changes in ongoing projects and 3.2. Decision making regarding assigning of selected resource. 49

51 3.1. Decision making related to changes in ongoing projects: 73% (11 out of 15) of the interviewees have answered that there is a process which is called: Change Management Process, which is related to changes in ongoing projects, and the rest of 27% (4 out of 15) of the interviewees didn t know about the current concern, since they haven t experienced such a thing. Based on the information given from 73% of the participants, Change Management Process is one of the main parts of the Project Plan made by project managers in the beginning of the project and is considered as the board of people who decides for changes. In this process, project manager identifies a board which contains individuals who are having a significant impact directly and indirectly on the project. These individuals are depending on the project, but in general there are limited numbers of people. The minimum can be 2 (two), the project manager and the stakeholder, the maximum is not identified since it depends on the project, however it is recommended not to contain so many since the decision taking can be more complex. In some instances even employees can be part of the board and these employees could be: TSM (Technical Solution Manager), or Lead IT Architect etc, who are there to describe specific technical problem and/or difficulty in a situation when a change is about to get approved/confirmed. In general the changes depend on the part of the business which is affecting, the kind of deliverable and the impact the change will take, however the project manager is the one who identifies the change and refers to the board who is giving the final approval. After the change is made than the sponsor is being informed by the project manager. Mentioned sponsor might have very broad understanding therefore followingly an instance is given for better understanding: in case there is a project for developing a product such as: laptop or self-phone, than a sponsor could be the end user of the mentioned product. There might also be some other cases for a decision making process made by a board who is responsible for a 50

52 certain project and project manager might not be part of it, for instance: a board can delegate certain type of decision to project manager, if the budget is limited for some time and the project manager should reduce the cost of the project for the given period Decision making regarding assigning of selected resource: 73% (11 out of 15) of the interviewees also took part on discussion of this question, since the rest were not informed and had no experience with this processes. The biggest concern regarding this kind of decision mentioned by them is Bureaucracy. They pointed out that there are too many people involved on the Organizational Line. It was expected to have too many people involved in such decision procedures since as described in a previous chapter it is one of the disadvantages in Matrix Structure Organization. Based on the information given by the 73% of the interviewees, having too many people involved means that a request has to go through some levels to get the final approval for the specific resource which is required for a specific project, and therefore it lost the significance. An answer is cited by the participants and can be found below to better understand the concern experienced by the employee who is part of Matrix Structure: V.C. (Project Manager): In this cases I need to explain one thing to one person, and then to another person, and then to another person, and the urgency is getting lost, and the resource I want to have becomes a number in excel sheet waiting to get approved. Below is given a picture (nr: 15) regarding the statistics of the answers given by the interviewees for the current question: 51

53 Decision making procedure 73% Know the procedures 27% Don't know Picture nr: 15: Decision making procedure Tool Used: MS Office How the projects are run in Matrix Structure Organization you are part of? When this question was discussed, expectedly has been confirmed by a majority of the interviewees that in real practice of an organization who is applying Matrix Structure, in this instance in IBM, Project Life Cycle is fully followed. The results are: 87% (13 out of 15) of interviewees have confirmed that projects are run through the whole Project Life Cycle. One of the given answers can be found below: V.L. (Transition Transformation Manager): Yes, it is true, it is happening in real life. We are probably a poster child of Project Management phases, and we really go through these phases and there is enough time and energy spent on each phase. However, we might have different terminology but the concept is the same. 13% (2 out of 15) of interviewees answered that projects partially follow it. 52

54 The slight difference on the terms of not applying the full life cycle is because of the amount of the project itself, therefore the big and longer projects apply it and in the other side the small projects, actually the mentioned RFS s (Request for Service) do not fully apply the lifecycle. On these small projects, only three phases are active, and those are: Initiating, Executing and Closure. Actually, is not that the phases are followed, but the work of these phases is being performed somehow in a very short approach, such as: Initiating - the client raises the request to portfolio manager. After he/she receives the request analysis the request if it is has been raised properly based on the agreement which in case of server storage for a particular machine might be: kind of server requested, amount of storage requested etc. Afterwards he/she assigns it to the available resource and sends the Kick Off. Executing: After the PM receives the request, he/she discusses it with the technical team in case Downtime is needed. Downtime means turning off the machine for a particular time on order to prevent any crash of it. In case it is needed than the client confirms the day and time when the machine will be turned off, it might be after business hour or during the weekend. In case it is not needed than the team updates the storage of the server and informs the project manager. Closure: In this phase, project manager informs the client for the change and after the client checks the update sends a closure note to him/her for closure confirmation. Usually the amount of the time which takes for these small projects is estimated to be completed usually from 2 (two) to 4 (four) working days, however in case there is downtime necessarily needed than it might take more than 1 (one) week, it depends on two factors: first, the response of the client for the approval and second, the day and time which is appropriate for the client. 53

55 Another proof which ensures that the projects are run through the Project Life Cycle in IBM is the so called: World Wide Project Management Methodology. This methodology has been developed and applied for easier managing of the projects and having a reference in case there is a concern or uncertainty. Below is given a picture (nr: 16) regarding the statistics of the answers given by the interviewees for the current question: How projects are run in Matrix Structure Organization 87% Follow the Project Life Cycle 13% Partially follow Project Life Cycle Picture nr: 16: How projects are run in Matrix Structure Organization Tool Used: MS Office Do you like being part of this structure, or would you like to rather change it? This was the last question of the interview prepared for the interviewees regarding the Matrix Structure Organization. The participants have given their own thoughts regarding the satisfaction of having this structure in their work. However, not all of the selected employees think in the same way and not all of them find this structure as the perfect one for the work they do. The results are: 54

56 47% (7 out of 15) of interviewees answered that they are satisfied with this structure. They believe that for this type of the company and the work they are performing, this structure fits the best and facilitates their work in a better way comparing to other organizational structures. One of the given answers can be found below: S.M. (Team Leader): I am almost fully satisfied with this structure and I cannot imagine having another one for this business. I believe is specifically for project environment with IT business and especially with this capacity of people working here it s much better than using the linear organizational structure. 33% (5 out of 15) of interviewees answered that they are partially satisfied with Matrix Structure Organization. Even though this structure can provide a secure business nowadays, some of the employees (33% of the interviewed) who are part of it believe that it should be actually mixed somehow with Functional Structure. Followingly can be found one of the answers which have been selected: F.V. (Project Coordinator): I find this structure as a good one, but I would like to mix the matrix and functional in some way. We need organization which is practically combination of those two, something in between, something that will not dictate the people what should do and will not isolate them, but will motivate them to think with their own head, to get out of the organizational structure. 20% (3 out of 15) of the interviewees have given their concern regarding the satisfaction towards this structure. Even though this structure has been good taught, thought, implemented and applied, they have expressed that they are not fully satisfied with what it offers to them. Actually the 3 (three) of them are project managers, and they would like to have the opportunity to combine this one with Projectized Structure. Below has been cited one of the answers given by participants: 55

57 B.B. (Project Manager): If I had the opportunity, I would try to combine or at least to enable the possibility to mix this with Projectized structure. Not for all projects, but for the bigger and longer projects to have projectized team, which will work and be fully committed to what they are assigned, and not to change it. Below is given a picture (nr: 17) regarding the statistics of the answers given by the interviewees for the current question: Do you like being part of Matrix Structure Organization 47% Yes 33% Partially, to mix with Functional Structure 20% Partially, to mix with Projectized Structure Picture nr: 17: Do you like being part of Matrix Structure Organization Tool Used: MS Office

58 5. Conclusion Matrix Structure represents one of the methods the certain organizations are using for running the business and managing the work. It has been created with the combination of the advantages and good points of Product Structure and Functional Structure in order to create a unique one which will serve to rapid change of nowadays dynamic and growing business demands. Based on the research and examples of the companies implementing this structure such as: IBM, Citibank, General Electric, ABB, Shell Oil and many more, it is understood that nowadays the companies having Matrix Structure applied in their business are the large well known companies. The explanation is that for this structure it is required to have a large amount of people, therefore it cannot be applied to small companies. Implementing this variety enables and facilitates the organization to exceed and excel in particular for product focus since the functional managers are directly responsible for; and functional support whereas the line managers are continuously performing dedicated support towards the functional line. The cited feature emphasizes that Matrix Structure is seen as an excellent solution for great companies since in comparison with others, it fulfills the gap of Projectized Structure while it enables the functional support and vise versa. Although it brings additional benefits, where the following mentioned facts are the key points: flexibility in terms of resource utilization and efficient exchange of information, knowledge and experience since the departments work closely and they communicate with each other. This leads to effective team work, efficient improvement of quality of the work and development of employees. Having two different managerial lines and chains of commands makes this structure unique and exceptional therefore this is considered to be the biggest challenge. There might be three different perspective of the mentioned factor: taking into account the view seen from the structure it is 57

59 estimated to be highly crucial and has an impact of better coordination, since the managers put their effort, attention and energy on a specific activity which they are responsible; analyzing the viewpoint from the managers standpoint we see a collision of interests and objectives because the line managers have a long-term target and strategy whereas the functional managers focus on short-term vision; and lastly considering the point of view of the resources having two bosses means twofold in terms of reporting which causes dual effort and satisfying two different requirements simultaneously. This is one of the biggest concerns which the resources are experiencing and it brings discontentment for them. Another piece of information obtained, particularly from the interview is that people working in this structure especially in IBM are having quite dynamic and very intensive work because of the flexibility. 58

60 6. Bibliography 1. Haugan, Gregory T. Project Management Fundamentals: Key Concepts and Methodology, Second Edition ISBN: Westland, Jason. The Project Management Life Cycle: Complete Step-by-Step Methodology for Initiating, Planning, Executing & Closing a Project Successfully ISBN: Pinto, Jeffrey K. The Project Management Institute Project Management Handbook ISBN: Wells, Christopher J. Technology/UK. [Online] Heagney, Joseph. Fundamentals of Project Management, Fourth Edition ISBN: Institute, Project Management. A Guide to the Project Management Body of Knowledge (PMBOK Guide), Third Edition ISBN: ISO Quality management systems Guidelines for quality management in projects : s.n. 8. Watt, Adrienne. Project Management Richardson, Gary L. Project Management Theory and Practice ISBN: Snyder, Cynthia and Parth, Frank. Introduction to IT Project Management ISBN: Corporation, International Business Machines. Project Management Orientation. 2000;

61 12. Bentley, Colin. The Essence of the PRINCE2: Project Management Method Roberts, Paul. Guide to Project Management: Achieving Lasting Benefit through Effective Change ISBN: Agriculture, United States Department of. Project Management Handbook, Version Haugan, Gregory T. Work Breakdown Structures for Projects, Programs, and Enterprises ISBN: Meredith, Jack R. and Mantel, Samuel J. Project Management: A Managerial Approach, Sixth Edition ISBN: Heldman, Kim, Baca, Claudia and Jensen, Patti. PMP: Project Management Professional Exam Study Guide Deluxe Edition, Second Edition ISBN: Gottlieb, Marvin R. The Matrix Organization Reloaded: Adventures in Team and Project Management Nemiro, Jill, et al. The Handbook of High Performance Virtual Teams: A Toolkit for Collaborating Across Boundaries ISBN: Kerzner, Harold. Project Management: A Systems Approach to Planning, Scheduling and Controlling, Seventh Edition ISBN: Methord123. [Online] 60