Concept of Project-Oriented Organization

According to Gareis (2000) Project-Oriented Organization (POO) is defined as an organization that has the following characteristics: defines Management by Projects as an organizational strategy; applies temporary organizations for the performance of complex processes; manages a project portfolio of different project types; has specific permanent organizations to provide integrative functions; applies a New Management Paradigm (lean management, total quality Management (TQM), business process re-engineering and learning organization); has an explicit project management culture; and perceives itself as project-oriented.

Based on the above characteristics of Project-Oriented Organization, one can see the specific organizational strategy of the POO to be management by projects. This organizational strategy is characterized by permanent and temporary organizational structures and by a culture based on a new management paradigm as depicted in Figure 4-1 below: Figure 4-1: Strategy, Structure and Culture of the POO

Source: Gareis (2000). \

The brief explanation of strategy, structure and culture of POO is outlined by Gareis (2000) in the following paragraphs. Management by Projects: The Organizational Strategy of the Project-Oriented Company Project-oriented companies consider projects not only as tools to perform business processes of medium and large scope but as a strategic option for the organizational design of the company. By applying a management-by-projects approach, the following organizational objectives are pursued: Organizational differentiation and decentralization of management responsibility Quality assurance by project teamwork and holistic project definitions Goal orientation by defining and controlling project objectives Personnel development in projects Organizational learning by projects Temporary Organizations of the POO The POO perceives projects and programs as temporary organizations for the performance of complex processes. In the organizational chart of the POO in addition to the permanent organizational structures temporary organizations will be shown as Figure 4-2

Source: Gareis (2000) Culture: New Management Paradigm The project-oriented company is characterized by the existence of an explicit project management Culture. New management concepts, such as lean management, Total Quality Management, the learning organization, and business process reengineering, introduce new approaches. Among the common features of these new management approaches are the following: The use of the organization to create competitive advantage The empowerment of employees Process orientation and teamwork in flat organizations Continuous and discontinuous organizational change Customer orientation, and networking with clients and suppliers

Processes of the Project-oriented Organization The POO is characterized by specific business processes. A process model of the POO can be visualized in a spider web (Figure 4-3). The axes represent the specific processes of the POO.

Source: Gareis and Huemann (2000).

Project management is the core business process of the POO. The project management process starts with the formal project assignment and ends with the project acceptance by the project owner. The project management consists of the sub-processes such as project start, project coordination, project controlling, project discontinuity management and project close-down. The project management process starts with the formal project assignment and ends with the acceptance of the project results by the project owner as shown in Figure 4-4.

What Parks Corporation (PC) should do to become a modern POO?

Parks Corporation (PC) does not possess sufficient skills and abilities to manage projects. Henry Gable, the director of engineering recognized the problem PC had in project management and convinced the vice-president, Ms Esther Mokonyane, to turn PC into modern fully fledged project oriented organization -POO. For this Luthando, Prinsloo & Gopal (Pty) Ltd, an executive project management company is hired to give professional support on what PC should do to become a modern project oriented organization-POO?

The consulting firm studied PCs project management competence on the ongoing Blue spider project and found out the following:

Strategy: By considering the strategic importance of R&D in PC, the Blue Spider Project should be given strategic emphasis to get full support and participation of the whole organization. There is no indication that the senior management team except Henry Gable, the director of engineering, participated on the project. This project is going to be my baby all the way Henry Gable Moving from a non project environment to a full-fledged project oriented organization requires active leadership from top management. Graham and Englund (2004) argue that: although project managers are mostly closely responsible for the success of projects, upper managers ultimately create an environment for project success. PCs senior management should apply management by projects as a management strategy of its business. To communicate this management strategy internally and externally the following paragraph should be included in the mission statement of PC as stated by Gareis (1989). We are a project-oriented company. We establish projects for the performance of complex tasks of small, medium and large volume. Our project management culture is developed continuously. We apply project-management methods and procedures according to specific project requirements. Organizational Structure: The organizational structure chosen by PC is matrix structure. The matrix structure requires close cooperation between the project and the functional organizations. However from the case we can see the domination of project by the functional organization. The Blue Spider Project has got only the support of the engineering department and didnt guarantee the support of others. Our resources are committed until a month from now You cant expect to simply call a meeting and have everything reshuffled for the Blue Spider Programme. (Production Manager) To apply management by projects strategy organizational structure that supports this strategy should be established. This is achieved by establishing temporary organizations for the performance of complex and new processes in addition to the permanent functional organization.

Culture: The project management culture of PC, i.e. forms of communication, roles, techniques, documentation standards etc. were not suitable for proper management of projects. There is no systematic program for recruiting and training professional project managers and no career path for project management. Gary Anderson, the Blue Spider Project manager was not assigned for f his experience and ability to manage projects. You were selected because of your age and because all of our other programme managers have worked only on production-type programmes. We need someone at the reins who knows R&D. (Director of Engineering)

The changes necessary to become a fully fledged POO requires a new culture.To ensure the creation of a culture that supports project oriented organization, PC should apply New Management Paradigm approaches such as: process-orientation, empowerment of employees, team work in flat organizations, customer-orientation, organization as competitive advantage, networking with clients and suppliers

In addition, PCs senior management should adopt and apply the following components of an environment for successful projects as discussed by Graham and Englund (2004): The change to project-based organizations, Strategic emphasis of projects, Understand upper management influence, Develop a core team process, Organize for projects management, Develop a project management information system, Develop a plan for project manager selection and development,

References: 1. Gareis, R.1989. Management by projects: the management approach for the future, International Journal of Project Management, 7(4):2439. 2. Gareis, R.2000. Competences in the Project-oriented Organisational, Projektmanagement Group. 3. Gareis, R. and Huemann, M. 2000.Project management competences in the Project-oriented organisation. Gower Publishing, Hampshire.Graham, R.J. and

4. Graham, R.J. and Englund, R.L. 2004.Creating environment for successful projects. 2nd ed. USA: Jossey-Bass.