Business Analysis for Project Management

1. A brief overview of the organisation itself, and the environment in which it operates (2 marks).

The company’s major business activity is production and distribution of nano-microscopy and its components. This is a multinational business with locations all across the globe. For the purpose of this exercise, only its Irish subsidiary will be discussed. It falls into the category of a small to medium enterprise with 25 employees working in the Irish subsidiary. The company structure consists from a CEO, managers and employees. In terms of business activities, the organisation can be broken down into few departments such as R&D, production, sales and marketing.

While internal factors are important to understand and analyse from the perspective of project implementation, external factors are also critical to take into account. Internal factors can be controlled and adjusted if necessary, for successful implementation of a project. However, external factors that can influence a project are often outside business control. These are change of public opinion, regulatory requirements, political factors, competitor performance, change of business environment and direction, etc. Such external factors should be taken into account by the project manager even if there are no obvious mechanisms to influence them directly (McElroy and Mills 2015).   

Bourne and Walker (2005) argue that the dynamics and complexity of global economy and external environment is a challenge for project managers. Change of management paradigm may be required from a traditional way to a new more proactive and flexible way of project management. 

The business operates in a technological environment that is characterised by high level of competitiveness and barrier entries as well as fast pace innovations. The industry includes production of Nano-technology products that can help design, produce and apply a variety of devices by controlled manipulation of shapes and sizes at atomic scales. Hence, the major customers of the company are based in scientific and educational spheres. They are educational institutions and research centres that apply Nano-technology products to solve their research problems.   

2. An overview of the project as it is currently defined, including a definition of the project’s scope (2 marks).

One would argue that a project needs to have a good idea, sufficient level of investments and management dedication. However, a properly defined project scope is one of the most critical parts of a project that could lead to unsuccessful project if ignored or neglected. There are three major steps that should be followed when defining project scope (Mirza et al. 2013):

• Identification of factors for starting a project
• Definition of objectives
• Identification of performance measures

Hence, the project was defined by the current market requirements and internal development level of the business. There was a need for a newly developed product that could be used by students of higher educational institutes. Current products produced by the company were highly sophisticated and expensive Nano-microscopes. Firstly, they had a full spectre of features that were of an interest for educational or research centres but were excessive for individual students. And secondly, they were not affordable for students. Management of the company decided to proceed with the project after analysis of favourable data from market research and financial evaluation of the project. 

According to Derenskaya (2018), from project management perspective, “scope” should include three major elements such as product content, works content and project content.  Below Figure 1 shows further breakdown of the proposed elements. 

Figure 1. Components of project scope management, adapted from Derenskaya (2018)

Hassan et al. (2018) discuss availability of various methods and tools for managers in order to define scope. They aim to provide features for quantifying scope as well as its verification and control.  Furthermore, Fageha and Aibinu (2013) argue that definition of project scope should involve input from all stakeholders at the early stages. Well-defined project at early stages is crucial for successful project implementation and satisfactory outcome. However, this was not exactly the case with this particular project. The project scope was mainly based on advisory notes by external research company and did not involve much of discussion between company departments such as engineering, sales and marketing. In addition, performance measures were not identified during early stages of the project. Company management succeeded in developing targets and deadlines for project implementation. The target was to develop a microscope that can be used by students doing research in nano field that would cost below € 1,000. One of the major requirements for the project was its full completion during a period of 2 years from research and development stage to production of first 100 units. 

What type of organisation you believe it to be, and why (4 marks)?

Naturally and in most cases, projects developed within organisations and hence, they are smaller than these organisations. In its own turn, organisational structures can have different levels of influence on projects in these organisations. Project teams and project managers should evaluate the level of impact in order to successfully implement the project. Furthermore, they must understand the type of organisation in which their projects are to be delivered.  There is a variety of different types of organisations ranging from functional to matrix organisations (Boyce 2019).

Overall, organisational structure of the business in discussion falls into category of Functional organisation. This can be considered as one of the most common organisational structures. The company is headed by CEO with functional managers that lead their departments such as R&D, Production, Marketing and Sales. Below Figure 2 reflects the organisational structure that describe the business.  

Figure 2. Functional organisation, adapted from (Boyce 2011).

As can be seen form Figure 2, project is coordinated by managers of business units and includes involvement of staff from the three units.  There are certain advantages of these type of organisations that should be highlighted. Such structure of organisations helps to utilise resources and employees expertise in the most efficient way. Each business unit is equipped with the most advantageous technology for their own area of business. It also suitable for expansion and production at a bigger scale. However, there are some disadvantages of functional organisation that should be noted by project teams and managers in particular. They are characterised by lack of centralised project authority, lower level of communication between separate business departments and poor customer interface. Depending on a project, functional organisations can create some difficulties in efficient accommodation of multidisciplinary teams (Boyce 2011, Boyce 2019).

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As discussed above, the organisation type can be defined as functional in regular business circumstances. However, this project was not a typical task, and a project manager was assigned to deliver the project through the period of two years. The manager built a team of professionals with expertise from different departments of the company. There were people presented from R&D, production, marketing and sales in this team. Hence, this can be considered as a matrix organisation with a temporary and particular purpose to deliver a single project through the defined period of two years. 

Bourne and Walker (2005) divides Matrix type organisation into 5 separate subcategories such as reflected in below Figure 3. 

Figure 3. Matrix type subcategories, adapted from (Bourne and Walker 2005)

If this framework of subcategories applied to the business in discussion, then it falls into Balanced matrix subcategory. The organisation is characterised by low to moderate authority of project manager that has full-time assignment to this project. At the same time, personnel and administrative staff assigned to this project is of part time nature with 50-70% of their overall working time dedicated to this particular project. Other characteristics that help assign discussed organisation into the matrix type are as follows:

-          Division of responsibilities between functional managers and project manager

-          Dual reporting relationship of project members

-          Ultimate responsibility for project success of project manager and not functional managers

3. Specific details of how the organisation structure impacted on the performance of the project (6 marks).

Matrix type organisation can be distinguished from other types of organisation structures by its mixed nature; a traditional hierarchy but with another functional layer. It is characterised by two chains of command with additional management authorities creating a complex structure. It has its own advantages as well as disadvantages for project implementation (Kuprenas 2003).

Matrix type organisation had a significant positive impact on performance of the project throughout the entire period of two years. For example, the matrix structure allowed to clearly define project objectives while assigning responsibilities to different members of the project. Another positive impact for project performance is that the project manager was allowed to create his own team. Hence, he was able to gather team members from different departments with a diverse set of knowledge in their subjects. Vice-verse, the knowledge gained by the project team members during the project were beneficial in the departments they came from. Moreover, both project manager and department managers were able to optimise use of such professionals’ time, skills and knowledge.

Sandhu and Ajmal (2011) argue that project knowledge and experience is difficult to retain in organisations after project is over. Generally, there are no project groups left for other employees to access project knowledge in future. In my opinion, the matrix type organisation helped to solve partially the issues as the project related employees stayed in their departments. So, the knowledge and experience gained during the project was never lost and could be accessed when required. Furthermore, the project team members were able to see actual progress of the project, which served as an additional motivational factor in daily routine work in their departments. All the benefits contributed to the company strategy aided in growth and future sustainability (Petro and Gardiner 2015, Macdonald 1997).

In spite of all the above benefits of the organisational structure for the performance of the project, it also had some negative aspects. Firstly, the major disadvantage of having a matrix type organisation for the project implementation is that some employees involved in the project were not told clearly their responsibilities. For example, two employees joined the project group from R&D department and meant to be involved in the project most of their time during first months of its existence. However, their existing R&D responsibilities did not allow their involvement for more than 50% of their working time, due to the fact the project was somehow delayed until the issue was sorted between project manager and R&D manager. It shows that all duties and responsibilities have to be clearly understood, agreed and communicated to all the parties involved in such complex organisational structure as a matrix. This helps avoid conflicting priorities during project implementation especially with “ever-limited” resources. Secondly, some project related employees had difficulties in reporting to both managers (project manager and their functional manager) in the same period of time. The challenge of developing proper communication strategy is critical in matrix type organisations and can be one of the most difficult issues to solve (Bourne and Walker 2005).

However, all these obstacles were overcome during first couple of months of existence of the project group. Proper communication channels as well as reporting routine was established and maintained during project implementation. In my opinion, lower level of authority of the project manager comparing to line managers had the biggest negative impact on the project implementation. CEO of the company had to interfere numerous times during project implementation in order to find the optimal solution in arguments between project manager and some line managers. In my own view, the negative impact of the matrix organisation was partially influenced by poor level of project culture at its early stages. Turner and Muller (2003) argue that project culture can be one of the most critical factors for success of project implementation & can affect project planning and management.

4. The major stakeholders in the project including:

• Their level of importance
• Their current level of support for the project
• Their (realistic) future position needed for the success of the project, and
• An outline of how they can be moved to these desired positions (6 marks).

Identification of project stakeholders and thorough analysis of their requirements, expectations and needs is a basis for success in project implementation. There are different categories of stakeholders such as primary, secondary or tertiary stakeholders (Boyce 2011, Stare 2011). Primary stakeholders of the project that directly influenced and contributed to it are as follows:

-          Company owner

-          Project manager

-          Project team members

-          Other departmental managers of the subsidiary based in Ireland

The level of importance for all the stakeholders was different the same as their level of support for the project. For example, the owner of the company came up with the original idea of producing new nano-microscopes in order to help overall business growth. He also acted as financial director of the project as it was financed through contingency funds of the company. Hence, his power, legitimacy and urgency attributes were of most significant when comparing to other stakeholders. In my mind, a project manager is supposed to be if not the first but the second most important stakeholder in terms of power and urgency attributes. However, this was not exactly the case in this project at its early stages as the project manager was someway dependent on departmental managers power. Some of them could have been considered dangerous stakeholders. It is worth mentioning that stakeholders` attributes are dynamic and can be changed throughout project lifespan (Boyce 2019). So, the situation changed during the project after interference of owner of the company, progress of the project and professional work of the project manager.

There can be too many stakeholders in complex projects like this. Hence, it is critical to focus on the most important stakeholders to be able to manage stakeholders more efficiently (Boyce 2019).  Secondary and tertiary stakeholders were of lesser importance for the project as their influence and impact were insignificant for the project implementation.

One of the most important things for a project manager is to understand that satisfaction of stakeholders is a key deliverable. It can and must be managed if required (McElroy and Mills 2015). Below Figure 4 shows main stages in Stakeholder management process:

Figure 4 Stakeholder Management process, adapted from (McElroy and Mills 2015).

Stakeholders can have different attitude towards projects ranging from Complete Opposition to Complete support (McElroy and Mills 2015). All stakeholders of the project varied in terms of attitudes to the project. For example, the company owner was naturally interested in the project as it was his original idea. Hence, he was in complete support of the project. The same applied to the manager assigned to the project. It was his full-time job and he dedicated all his time, abilities and professional support in order to successfully complete the project. At the same time, project team members and other functional managers were ranging from passive opposition that reluctantly accepted the project but were not happy with it to “No Commitment” attitude that accepted the change but were not supportive or opposed the project. Below Table 1 reflects the project stake holder commitment map.

Table 1 Project stake holder commitment map

X – Position at the start of the project, O – Required position

According to McElroy and Mills (2015), commitment analysis helps to concentrate on development of strategy to manage every project stakeholder. As it can be seen from above Table 1, commitment analysis identified that some project team members and all functional departmental managers were required to change their commitment statuses in order to make the project more efficient. As shown in the above Table 1, all the stakeholders of the project should have been moved to passive and active support. Unfortunately, there was no strategy developed for each stakeholder in order to achieve this. If theoretical knowledge of raising and maintaining commitment of the stakeholders had been applied it would had been beneficial for the project.

In order to raise the commitment of stakeholders, their roles in project success should have been highlighted and their awareness built. To maintain commitment, the alignment between stakeholders’ targets and objectives of the project should have been periodically highlighted to them (McElroy and Mills 2015).

References

• Boyce, K. (2011) ‘Project Management’, BST103, National University of Ireland, Galway, unpublished.
• Boyce, K. (2019) ‘Project Management Tutorial 1’, BST103: B.Sc in Science & Technology, 19 Jan, AUA, unpublished.
• Boyce, K. (2019) ‘Project Management Tutorial 2’, BST103: B.Sc in Science & Technology, 16 Feb, AUA, unpublished.
• Bourne, L. and Walker, D.H.T. (2005) ‘The paradox of project control’, Team Performance Management: An International Journal, 11 (5/6), 157-178, available: https:// doi.org/10.1108/13527590510617747.
• Derenskaya, Y. (2018) ‘Project Scope Management Process’, Baltic Journal of Economic Studies, 4 (1), 118-125, available: https://doi.org/10.30525/2256-0742/2018-4-1-118-125.
• Fageha, M.K. and Aibinu, A.A. (2013) ‘Managing Project Scope Definition to Improve Stakeholders’ Participation and Enhance Project Outcome’, Procedia – Social and Behavioral Sciences, 74, 154 – 164, available: doi: 10.1016/j.sbspro.2013.03.038.
• Hassan, I., Ahmad, N. and Zuhaira, B (2018) ‘Calculating completeness of software project scope definition’, Information and Software Technology, 94, 208–233, available: http://dx.doi.org/10.1016/j.infsof.2017.10.010.
• Kuprenas, J.A. (2003) ‘Implementation and performance of a matrix organization structure’, International Journal of Project Management, 21, 51–62.
• Macdonald, G. (1997) ‘Innovation diffusion and health education in schools’, in Sidell, M., Jones, L., Katz, J. and Peberdy, A., eds., Debates and dilemmas in promoting health, London: Open University, 55-83.
• McElroy, B. and Mills, C. (2015) ‘Managing Stakeholders’, in Turner, R. eds., Gower Handbook of Project Management, NY: Routledge, 757-777.
• Mirza, M.N. and Pourzolfaghar, Z. and Shahnazari M. (2013) ‘Significance of Scope in Project Success’, Procedia Technology 9, 722 – 729, available: doi:10.1016/j.protcy.2013.12.080.
• Petro, Y. and Gardiner, P. (2015) ‘An investigation of the influence of organizational design on project portfolio success, effectiveness and business efficiency for project-based organizations’, International Journal of Project Management, 33,1717–1729, available: http://dx.doi.org/10.1016/j.ijproman.2015.08.004.
• Sandhu, M. and Ajmal, M. (2011) ‘The adoption of ICT in project‐based and traditional organizations: Evidence from Finnish and Swedish companies’, Journal of Enterprise Information Management, 25 (1), 7-27, available: https://doi.org/10.1108/17410391211192143.
• Stare, A. (2011) ‘The impact of the organisational structure and project organisational culture on project performance in Slovenian enterprises’ Journal of Contemporary Management Issues, 16 (2), 1-22.
• Turner, J.R. and Muller, R. (2003) ‘On the nature of the project as a temporary organization’, International Journal of Project Management, 21, 1–8.