1-1 In the project environment, cause-and-effect relationships are almost always readily apparent. Good project management will examine the effect in order to better understand the cause and possibly prevent it from occurring again. Below are causes and effects. For each one of the effects, select the possible cause or causes that may have existed to create this situation:
1. Late completion of activities
2. Cost overruns
3. Substandard performance
4. High turnover in project staff
5. High turnover in functional staff
6. Two functional departments performing the same activities on one project
Causes a. Top management not recognizing this activity as a project b. Too many projects going on at one time c. Impossible schedule commitments d. No functional input into the planning phase e. No one person responsible for the total project f. Poor control of design changes g. Poor control of customer changes h. Poor understanding of the project manager's job i. Wrong person assigned as project manager j. No integrated planning and control k. Company resources are overcommitted l. Unrealistic planning and scheduling m. No project cost accounting ability n. Conflicting project priorities
0. Poorly organized project office
(This problem has been adapted from Russell D. Archibald, Managing High-Technology Programs and Projects, New York: John Wiley, 1976, p. 10.)
1-2 Because of the individuality of people, there always exists differing views of what management is all about. Below are lists of possible perspectives and a selected group of organizational members. For each individual select the possible ways that this individual might view project management:
1. Upper-level manager
2. Project manager
3. Functional manager
4. Project team member
Perspectives a. A threat to established authority b. A source for future general managers c. A cause of unwanted change in ongoing procedures d. A means to an end e. A significant market for their services f. A place to build an empire g. A necessary evil to traditional management h. An opportunity for growth and advancement i. A better way to motivate people toward an objective j. A source of frustration in authority k. A way of introducing controlled changes l. An area of research m. A vehicle for introducing creativity n. A means of coordinating functional units o. A means of deep satisfaction p. A way of life
1-3 Consider an organization that is composed of upper-level managers, middle- and lower-level managers, and laborers. Which of the groups should have first insight that an organizational restructuring toward project management may be necessary?
1-4 How would you defend the statement that a project manager must help himself?
1-5 Will project management work in all companies? If not, identify those companies in which project management may not be applicable and defend your answers.
1-6 In a project organization, do you think that there might be a conflict in opinions over whether the project managers or functional managers contribute to profits?
1-7 What attributes should a project manager have? Can an individual be trained to become a project manager? If a company were changing over to a project management structure, would it be better to promote and train from within or hire from the outside?
1-8 Do you think that functional managers would make good project managers?
1-9 What types of projects might be more appropriate for functional management rather than project management, and vice versa?
1-10 Do you think that there would be a shift in the relative degree of importance of the following terms in a project management environment as opposed to a traditional management environment?
a. Time management b. Communications c. Motivation
1-11 Classical management has often been defined as a process in which the manager does not necessarily perform things for himself, but accomplishes objectives through others in a group situation. Does this definition also apply to project management?
1-12 Which of the following are basic characteristics of project management?
a. Customer problem b. Responsibility identification c. Systems approach to decision making d. Adaptation to a changing environment e. Multidisciplinary activity in a finite time duration f. Horizontal and vertical organizational relationships
1-13 Project managers are usually dedicated and committed to the project. Who should be "looking over the shoulder" of the project manager to make sure that the work and requests are also in the best interest of the company? Does your answer depend on the priority of the project?
1-14 Is project management designed to transfer power from the line managers to the project manager?
1-15 Explain how career paths and career growth can differ between project-driven and non-project-driven organizations. In each organization, is the career path fastest in project management, project engineering, or line management?
1-16 Explain how the following statement can have a bearing on who is ultimately selected as part of the project team:
"There comes a time in the life cycle of all projects when one must shoot the design engineers and begin production."
1-17 How do you handle a situation where the project manager has become a generalist, but still thinks that he is an expert?
"I wish the hell that they had never invented computers," remarked Tom Ford, president of Jackson Industries. "This damn computer has been nothing but a thorn in our side for the past ten years. We're gonna resolve this problem now. I'm through watching our people fight with one another. We must find a solution to this problem."
In 1982, Jackson Industries decided to purchase a mainframe computer, primarily to handle the large, repetitive tasks found in the accounting and finance functions of the organization. It was only fitting, therefore, that control of the computer came under the director of finance, Al Moody. For two years, operations went smoothly. In 1984, the computer department was reorganized in three sections: scientific computer programming, business computer programming, and systems programming. The reorganization was necessary because the computer department had grown into the fifth largest department, employing some thirty people, and was experiencing some severe problems working with other departments.
After the reorganization, Ralph Gregg, the computer department manager, made the following remarks in a memo distributed to all personnel:
The Computer Department has found it increasingly difficult to work with engineering and operations functional departments, which continue to permit their personnel to write and document their own computer programs. In order to maintain some degree of consistency, the Computer Department will now assume the responsibility for writing all computer programs. All requests should be directed to the department manager. My people are under explicit instructions that they are to provide absolutely no assistance to any functional personnel attempting to write their own programs without authorization from me. Company directives in this regard will be forthcoming.
The memo caused concern among the functional departments. If engineering wanted a computer program written, they would now have to submit a formal request and then have the person requesting the program spend a great deal of time explain ing the problem to the scientific programmer assigned to this effort. The department managers were reluctant to have their people ''waste time" in training the scientific programmers to be engineers. The computer department manager countered this argument by stating that once the programmer was fully familiar with the engineering problem, then the engineer's time could be spent more fruitfully on other activities until the computer program was ready for implementation.
This same problem generated more concern by department managers when they were involved in computer projects that required integration among several departments. Although Jackson Industries operated on a traditional structure, the new directive implied that the computer department would be responsible for managing all projects involving computer programming even if they crossed into other departments. Many people looked on this as a "baby" project management structure within the traditional organization.
In June 1992, Al Moody and Ralph Gregg met to discuss the deterioration of working relationships between the computer department and other organizations.
Al Moody: "I'm getting complaints from the engineering and operations departments that they can't get any priorities established on the work to be done in your group. What can we do about it?"
Ralph Gregg: "I set the priorities as I see fit, for what's best for the company. Those guys in the engineering and operations have absolutely no idea how long it takes to write, debug, and document a computer program. Then they keep feeding me this crap about how their projects will slip if this computer program isn't ready on time. I've told them what problems I have, and yet they still refuse to let me participate in the planning phase of their activities."
Al Moody: "Well, you may have a valid gripe there. I'm more concerned about this closed shop you've developed for your department. You've built a little empire down there and it looks like your people are unionized where the rest of us are not. Furthermore, I've noticed that your people have their own informal organization and tend to avoid socializing with the other employees. We're supposed to be one big, happy family, you know. Can't you do something about that?"
Ralph Gregg: "The problem belongs to you and Tom Ford. For the last three years, the average salary increase for the entire company has been 7.5 percent and our department has averaged a mere 5 percent because you people upstairs do not feel as though we contribute anything to company profits. My scientific programmers feel that they're doing engineering work and that they're making the same contribution to profits as is the engineer. Therefore, they should be on the engineering pay structure and receive an 8 percent salary increase."
Al Moody: "You could have given your scientific programmers more money. You had a budget for salary increases, the same as everyone else."
Ralph Gregg: "Sure I did. But my budget was less than everyone else's. I could have given the scientific people 7 percent and everyone else 3 percent. That would be an easy way to tell people that we think they should look for another job. My people do good work and do, in fact, contribute to profits. If Tom Ford doesn't change his impression of us, then I expect to lose some of my key people. Maybe you should tell him that."
Al Moody: "Between you and me, all of your comments are correct. I agree with your concerns. But my hands are tied, as you know.
"We are contemplating the installation of a management information system for all departments and, especially, for executive decision making. Tom is contemplating creating a new position, Director of Information Services. This would move the computer out of a department under finance and up to the directorate level. I'm sure this would have an impact on yearly salary increases for your people.
"The problem that we're facing involves the managing of projects under the new directorate. It looks like we'll have to create a project management organization just for this new directorate. Tom likes the traditional structure and wants to leave all other directorates intact. We know that this new directorate will have to integrate the new computer projects across multiple departments and divisions. Once we solve the organizational structure problem, we'll begin looking at implementation. Got any good ideas about the organizational structure?"
Ralph Gregg: "You bet I do. Make me director and I'll see that the work gets done." Kombs Engineering
In June 1993, Kombs Engineering had grown to a company with $25 million in sales. The business base consisted of two contracts with the U.S. Department of Energy (DOE), one for $15 million and one for $8 million. The remaining $2 million consisted of a variety of smaller jobs for $15,000-$50,000 each.
The larger contract with DOE was a five-year contract for $15 million per year. The contract was awarded in 1988 and was up for renewal in 1993. DOE had made it clear that, although they were very pleased with the technical performance of Kombs, the follow-on contract must go through competitive bidding by law. Marketing intelligence indicated that DOE intended to spend $10 million per year for five years on the follow-on contract with a tentative award date of October 1993.
On June 21, 1993, the solicitation for proposal was received at Kombs. The technical requirements of the proposal request were not considered to be a problem for Kombs. There was no question in anyone's mind that on technical merit alone, Kombs would win the contract. The more serious problem was that DOE required a separate section in the proposal on how Kombs would manage the $10 million/year project as well as a complete description of how the project management system at Kombs functioned.
When Kombs won the original bid in 1988, there was no project management requirement. All projects at Kombs were accomplished through the traditional organizational structure. Line managers acted as project leaders.
In July 1993, Kombs hired a consultant to train the entire organization in project management. The consultant also worked closely with the proposal team in responding to the DOE project management requirements. The proposal was submitted to DOE during the second week of August. In September 1993, DOE provided Kombs with a list of questions concerning its proposal. More than 95 percent of the questions involved project management. Kombs responded to all questions.
In October 1993, Kombs received notification that they would not be granted the contract. During a post-award conference, DOE stated that they had no "faith" in the Kombs project management system. Kombs Engineering is no longer in business.
a. What was the reason for the loss of the contract?
b. Could it have been averted?
c. Does it seem realistic that proposal evaluation committees could consider project management expertise to be as important as technical ability?
For seventy-five years, the Williams Machine Tool Company had provided quality products to its clients, becoming the third largest U.S.-based machine tool company by 1980. The company was highly profitable and had an extremely low employee turnover rate. Pay and benefits were excellent.
Between 1970 and 1980, the company's profits soared to record levels. The company's success was due to one product line of standard manufacturing machine tools. Williams spent most of its time and effort looking for ways to improve its bread-and-butter product line rather than to develop new products. The product line was so successful that companies were willing to modify their production lines around these machine tools rather than asking Williams for major modifications to the machine tools.
By 1980, Williams Company was extremely complacent, expecting this phenomenal success with one product line to continue for twenty to twenty-five more years. The recession of 1979-1983 forced management to realign their thinking. Cutbacks in production had decreased the demand for the standard machine tools. More and more customers were asking for either major modifications to the standard machine tools or a completely new product design.
The marketplace was changing and senior management recognized that a new strategic focus was necessary. However, lower-level management and the work force, especially engineering, were strongly resisting a change. The employees, many of them with over twenty years of employment at Williams Company, refused to recognize the need for this change in the belief that the glory days of yore would return at the end of the recession.
By 1985, the recession had been over for at least two years yet Williams Company had no new product lines. Revenue was down, sales for the standard product (with and without modifications) were decreasing, and the employees were still resisting change. Layoffs were imminent.
In 1986, the company was sold to Crock Engineering. Crock had an experienced machine tool division of its own and understood the machine tool business. Williams Company was allowed to operate as a separate entity from 1985 to 1986. By 1986, red ink had appeared on the Williams Company balance sheet. Crock replaced all of the Williams senior managers with its own personnel. Crock then announced to all employees that Williams would become a specialty machine tool manufacturer and that the "good old days" would never return. Customer demand for specialty products had increased threefold in just the last twelve months alone. Crock made it clear that employees who would not support this new direction would be replaced.
The new senior management at Williams Company recognized that eighty-five years of traditional management had come to an end for a company now committed to specialty products. The company culture was about to change, spearheaded by project management, concurrent engineering, and total quality management.
Senior management's commitment to product management was apparent by the time and money spent in educating the employees. Unfortunately, the seasoned twenty-year-plus veterans still would not support the new culture. Recognizing the problems, management provided continuous and visible support for project management in addition to hiring a project management consultant to work with the people. The consultant worked with Williams from 1986 to 1991.
From 1986 to 1991, the Williams Division of Crock Engineering experienced losses in twenty-four consecutive quarters. The quarter ending March 31, 1992, was the first profitable quarter in over six years. Much of the credit was given to the performance and maturity of the project management system. In May 1992, the Williams Division was sold. More than 80 percent of the employees lost their jobs when the company was relocated over 1,500 miles away.
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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.