Kap 6 - Organizational structure and culture Flashcards
What is an organizational structure and what is its purpose?
Functional organizational structure
Most common. People are grouped by discipline and their level of authority in a top-down hierarchy.
Characteristics:
- Deep structures with many levels and bosses with impressive titles.
- Relatively weak coordination and communication between functions
- No customer focal point – the main focus is on management and control of the separate functions and not the customer.
- Allegiance and commitment are to the function and not to the projects passing through the function.
Advantages:
- There are vertical communication channels within the functions.
- The functional manager has complete autonomy and control over manpower resources, budgeting and cost control.
- There is often a large concentration of specialists providing the organization with competitive advantage.
- There is often investment in function-specific technology.
Disadvantages:
- Work typically passes through the organization in an uncoordinated suboptimal manner, often without a project manager being assigned.
- The customer often finds it a battle to get work done quickly.
- Genuine projects may have project managers assigned to them, but these project managers may still not be given priority by the functional managers concerned.
- Over time, functional structure can become bureaucracies.
Product organizational structure
In a project structure, people are organized according to the product line, program or project they belong to.
Characteristics:
- Employees on a particular product or project are generally allocated.
- The participants work directly for the product or the program manager.
Advantages/characteristic:
- Strong communication channels.
- Loyalty to the product.
- Rapid reaction time to problems and issues.
Disadvantages:
- A tendency to retain a full complement of personnel for each product, covering each discipline, long after they are all needed.
- A risk of low innovation and application of new technology over time.
- A danger that management costs might escalate (duplication of resource requirements).
Matrix organizational structure
- The matrix structure is a combination of the functional and the project structure.
- In a matrix structure, vertically organized functions still exist, but these are overlaid with a cross structure of projects and project managers – two structures merged into one.
- The matrix structure gives project managers a method for managing and planning, but it does not necessarily provide the goodwill (from the functions) required to do the job effectively.
- By having dual management accountability, the matrix structure has sacrificed the principle of unity of command found in most bureaucracies and increased the need for integration.
The matrix structure can be further divided into:
Weak matrix structure:
The project manager has a mandate to execute a project, but may have a low level of authority compared to functional managers. This represents a weak matrix structure. In a weak matrix structure, the interpersonal and project marketing skills of the project manager are critical.
Strong matrix structure:
In an organization where the traditional demarcation lines have become less visible, and there is a stronger process or customer focus, the project manager will have more influence in the organizational minefield.
Advantages:
The matrix structure is more adaptable to rapid social change, more responsive to individual needs, and closer to the democratic ideal than the traditional structure.
Disadvantages:
However, companies do not necessarily have to choose one form over another. Skinner and Ivancevich (1992) suggest that an organization can employ two different structures at once.
What are the characteristics of virtual organizations?
Comprises several project groups producing output based on a common understanding of business rules. Typically, each project provides resources, core competencies and knowledge in order to be more flexible and achieve quicker reaction times to changing environments. The project partners are connected by means of modern information and communication technologies.
Benefits:
- support for solving complex problems through group communication
- allowing internal members and external partners to get involved in the early project phases
- support by varied computer technologies.
Explain the four different four types of organizations in projects (CS, PO, CPO and PM).
Client system (CS): This term includes all the organisations which satisfy one or more of the following criteria:
- has the authority to approve expenditure on the project
- has the authority to approve the form the project has to
- take and/or its timing
- will be the owner of the project
- will be a major user
- will administer or manage the project upon completion.
Project organisation (PO): The temporary multiorganisation established for the limited and finite purpose of bringing the project into being from inception to completion, which consists of parts of several separate and diverse organisations drawn from the project participants (contractors, subcontractors, suppliers and also the client system), and whose members will eventually disperse, going back to their own organisations or on to some new project.
Client project organisation (CPO): The intersection of project organisation and client system; that part of the client system designated or assumed as having project responsibility.
Project management (PM): A subset of the project
organisation whose responsibility includes one or more of
the following management functions: boundary control;
monitoring and maintenance activities (in connection with
the activities of the project organisation); and project
recommendation and/or approval powers.
a - internal/external (majority of projects)
b - internal external
c - internal
What is supply chain management?
Managing the external relationships in the supply of goods and services. Integrates strategy, purchasing and quality management.
- Supply chain management is a fully integrated process extending from the supplier’s supplier to the customer’s customer
- Supply chain managers search backwards throughout the entire supply chain to identify unnecessary or nonproductive costs that can be taken out of the system. They work with the entire supply chain to improve continuously the quality, service and delivery time.
- The output of any process in the supply chain affects every process and every customer in the supply chain downstream, which means that improving a process improves every process downstream, which results in cost savings accumulating throughout the supply chain
Procurement planning
Under what circumstances should a project rely on procurement rather than in-house solutions to realize a project?
Procurement: making someone else do the project work.
Requirement and planning - Defining the need (to
buy), for example decid- ing what to make and what to buy in for the project
Soliciation - Deciding which potential providers (contrac-
tors/suppliers) to approach, what to ask from them (to help decide whether or not to award a contract to supply goods/services) and how to evaluate their submission
Awarding - Making the award, that is, establishing a contractual relationship.
Contract administration - Managing the contractual relationship, closing the contract.
Projects might rely on procurement over in-house solutions when it provides access to specialized expertise, helps in mitigating risks, is more cost-effective, ensures compliance, or offers flexibility and innovation that may not be readily available within the organization. The decision to procure externally or develop in-house solutions often depends on the project’s specific requirements, constraints, and strategic objectives (ChatGPT).
Explain the difference between the various types of bid solicitations (T-buy, RFQ, ITT and RFP).
T-buys are used for small competitive purchases that can be easily described over the phone and must be delivered quickly. Typically, the purchaser phones at least three companies including the last successful company from its source lists.
They give their bids over the phone. The one that offers the lowest price and fulfils all the terms of the requirement wins the contract.
RFQs (request for quotation) are generally one-page documents that provide a description of the required goods or services and list the terms and conditions of the organisation. In response, suppliers provide a quotation document indicating price and delivery information. RFQs often take place by fax and telephone and are therefore considered a more informal method of tendering, which can easily be used for either the purchase of goods or contracting services and is considered a convenient way to survey the market for best price without incurring substantial legal obligations. The bid documents are kept simple so that the contract can be awarded quickly.
An ITT (Invitation to tender) is a more formal method of tendering than an RFQ,
which is used for higher value purchases that have fairly
straightforward requirements, such as a request for off-the-shelf goods. Tenders describe in significant detail through
specifications what is expected to be supplied or the service
required. An ITT is sent out to any interested party who may
submit a formal tender bid. The ITT approach is used when:
- two or more suppliers are capable of filling the requirement
- the evaluation of tenders can be done against clearlystated criteria
- tenders are all likely to have a common pricing basis
- the lowest priced responsive tender is to be accepted without negotiations and the contract awarded.
Of all the solicitation bid types, tenders are unique because they can be opened publicly - it is generally regarded as good practice to hold a public opening for any tender where the contract award will attract publicity, except for those that are classified.
RFPs (request for proposal) are negotiated contracts that are used when it is impossible to fully describe the item, service or project. Price remains a key factor.
- RFPs seek the best value for an organisation through the competitive bid process yet provide for both objective and justifiable reasons for its choices.
- The RFP describes in detail the project to be completed, the intended result and the criteria for choosing a successful bid.
- It can propose a preferred method of completing the work or can ask the bidders to provide solutions, seeking the creative input of suppliers.
- a proposal is different from a tender unlike a tender, an RFP is not an offer, but only contemplates an offer. Unlike the receipt of a tender, the receipt of a proposal is not an acceptance, and therefore does not result in a contract.
Firm fixed price / fixed price / lump sum contract
Spørsmål 11-16 igjen.
- Most common
- Contractor carries all risk
- Is appropriate where the contract requirements can be
- well defined and performed without significant risk of failure
- Is inappropriate where the performance is fraught with unknown or unquantifiable risks, or where the customer will need to assert significant control over the performance efforts
picture, characteristics, who carries the risk, price and fee with overrun and underrun. When are the contracts used?
Cost plus fixed fee contract (CPFF)
- The most common type of cost reimbursement contract
- CPFF involves two elements: an estimated cost and a fixed fee. The contractor is reimbursed its costs of performance and is paid a fee in addition to those reimbursed costs.
- CPFF contracts are used where the risks of performance are high, or the customer requires a high level of performance control. Because of the high costs of administration, they are typically used only in higher value contracts.
Cost plus percentage cost contract
- Fee is expressed as a percentage of the total costs expended
- The fee grows with the expenditures and the structure is an invitation to the worst of inefficiencies. It should be avoided if at all possible.
Incentive contracting
- is a contractual method that rewards performance
- is about risk/reward sharing
- promotes the project team concept
- promotes a win-win opportunity
- ensures project work is goal-oriented by promoting specific goals.
Incentive contracting can be conducted on the basis of several different project parameters (cost, schedule, quality, safety, customer satisfaction, etc). In this course, we will predominantly considering incentive contracting based on cost.
Most important:
Cost plus incentive fee contract
Most important:
Fixed price incentive contract
