Table Major Company Disadvantages Of Project Management

Disadvantages Percent of Respondents

• More complex internal operations 51%

• Inconsistency in application of company policy 32%

• Lower utilization of personnel 13%

• Higher program costs 13%

• More difficult to manage 13%

• Lower profit margins 2%

Other Disadvantages

• Tendency for functional groups to neglect their job and let the project organization do everything

• Too much shifting of personnel from project to project

• Duplication of functional skills in project organization

Source: Reprinted by permission of Harvard Business Review. An exhibit from "How to Set Up a Project Organization," by C. J. Middleton, March-April, 1967 (pp. 73-82). Copyright © 1967 by the Harvard Business School Publishing Corporation; all rights reserved.

An almost predictable result of using the project management approach is the increase in management positions. Killian describes the results of two surveys28:

One company compared its organization and management structure as it existed before it began forming project units with the structure that existed afterward. The number of departments had increased from 65 to 106, while total employment remained practically the same. The number of employees for every supervisor had dropped from 13.4 to 12.8. The company concluded that a major cause of this change was the project groups [see footnote 26 for reference article].

Another company uncovered proof of its conclusion when it counted the number of second-level and higher management positions. It found that it had 11 more vice presidents and directors, 35 more managers, and 56 more second-level supervisors. Although the company attributed part of this growth to an upgrading of titles, the effect of the project organization was the creation of 60 more management positions.

Although the project organization is a specialized, task-oriented entity, it seldom, if ever, exists apart from the traditional structure of the organization.29 All project management structures overlap the traditional structure. Furthermore, companies can have more than one project organizational form in existence at one time. A major steel product, for example, has a matrix structure for R&D and a product structure elsewhere.

Accepting a project management structure is a giant step from which there may be no return. The company may have to create more management positions without changing the total employment levels. In addition, incorporation of a project organization is almost always accompanied by the upgrading of jobs. In any event, management must realize that whichever project management structure is selected, a dynamic state of equilibrium will be necessary.

Project Management Made Easy

Project Management Made Easy

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.

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