On the micro level, virtually all organizations are either marketing-, engineering-, or manufacturing-driven. But on the macro level, organizations are either project- or non-project-driven. In a project-driven organization, such as construction or aerospace, all work is characterized through projects, with each project as a separate cost center having its own profit-and-loss statement. The total profit to the corporation is simply the summation of the profits on all projects. In a project-driven organization, everything centers around the projects.
In the non-project-driven organization, such as low-technology manufacturing, profit and loss are measured on vertical or functional lines. In this type of organization, projects exist merely to support the product lines or functional lines. Priority resources are assigned to the revenue-producing functional line activities rather than the projects.
Project management in a non-project-driven organization is generally more difficult for these reasons:
• Projects may be few and far between.
• Not all projects have the same project management requirements, and therefore they cannot be managed identically. This difficulty results from poor understanding of project management and a reluctance of companies to invest in proper training.
• Executives do not have sufficient time to manage projects themselves, yet refuse to delegate authority.
• Projects tend to be delayed because approvals most often follow the vertical chain of command. As a result, project work stays too long in functional departments.
• Because project staffing is on a "local" basis, only a portion of the organization understands project management and sees the system in action.
• There is heavy dependence on subcontractors and outside agencies for project management expertise.
Non-project-driven organizations may also have a steady stream of projects, all of which are usually designed to enhance manufacturing operations. Some projects may be customer-requested, such as:
• The introduction of statistical dimensioning concepts to improve process control
• The introduction of process changes to enhance the final product
• The introduction of process change concepts to enhance product reliability
If these changes are not identified as specific projects, the result can be:
• Poorly defined responsibility areas within the organization
• Poor communications, both internal and external to the organization
• Slow implementation
• A lack of a cost-tracking system for implementation
• Poorly defined performance criteria
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.