Organisational Culture and Project Performance - Essay Example

Order: 461519 Assignment in Project management As agreed with the Part A word count of 2500 – 10 pages Part B word count 1000 – 4 pages TOTAL word count 3500 – 14 pages. Table of Contents Table of Contents 2 Part A – Essay 3 Introduction 3 Projects and contemporary organisations- Systems approach 3 Organisational culture and project performance 6 Organisational culture and project structure 7 Conclusion 13 Part B – Project scheduling 14 References and Bibliography 22 Part A – Essay TITLE Influence of organisational culture on project team structures and success (2500) Introduction The purpose of the essay is to provide a critical discussion and analysis on the influence of organisational culture on project structure and performance. The two topics, culture and project management, are among the most researched topics influencing practitioners in management in the past decades. The same is a result of the increased view on project management as a tool for fast transformation of organisations and the perception that culture is the most influential supporting infrastructure enabling the change. The essay is organized in several sections. First an insight on projects and their use in contemporary organisations is provided, followed by an analysis of the influence of organisational culture on project structure, teams and performance, ending with a summary and discussion on the topic. Projects and contemporary organisations- Systems approach “ A Project is a problem scheduled to be solved.” Dr. J.M.Juran as cited in Harvard Business School Press (2006, p8) This is the shortest yet the most comprehensive definition of what a project is; a one time event, with a beginning and an end, with quantitative and qualitative outcomes, comprised of many depended activities with a sole purpose of solving a problem (Meredith and Mantel 2010, PMI 2008). Projects are managed through a process defined by a project management methodology used on all projects to increase the likelihood of achieving project success, excellence and maturity (Kerzner 2009). A standardized definition of Project management comes from the PMBOK (PMI 2008, p.6) where it is defined as “an application of knowledge, skills, tools and techniques to project activities to meet the project requirements”. As a relatively new discipline PM emerged from the post world war’s defence methodologies applied in managing large-scale initiatives. At the beginning, what literature refers today as “traditional projects”, were stand-alone projects with dedicated resources and without larger consequences if the deadlines were not met (Taylor 2003). These projects were characteristic for the construction industry. From the 1980s onwards, the rapid development of IT and its rising penetration in the value chain of organisations, increased the number IT projects and shortened the project life cycle (IT technology has a short life cycle), while the dependency of project’s processes from the parent organisation increased. As a result the old tools and techniques in managing traditional projects were found to be less efficient, even counterproductive and practitioners and researchers begun to recognise the growing importance of introducing the systems approach in analysing and managing projects (Gardiner 2005, Taylor 2003). A systems approach is a problem solving technique introduced in 1960s that builds on defining the scope of the system, dividing it into subcomponents, and then identifying and evaluating each subcomponent’s problems, constraints and needs (Schwalbe 2009). Applied to project management it works on the assumption that the project is an open system with inputs i.e. the needs of the organisation and outputs i.e. project results that need to be integrated into the beneficiary organisation. The systems approach (Gardiner 2005, Kerzner 2009) is represented through the modelling and decision schools of Project management thought (Bredilet 2007); and it is implemented in PMBOK (PMI 2008) and Prince2 (OGC 2005) methodology under the assumption that every process group has inputs and outputs i.e. represents an open system and a part of something bigger than the group. Once contemporary projects begun to be analysed and managed within the frame of teh systems approach (Gardiner 2005, Taylor 2003), the rate of failed projects deceased (Standish group 2003). Organisational culture and project performance There are many different perspectives expressed by researchers on the topic of organisational culture as are: integrated, differentiated and fragmented view (Martin 2002). However, the best approach towards defining organisational culture is through understanding the elements of which it is made: artefacts, norms and values that are shared among the members of the same organisation (Daft, 2008). Within the systems theory, where projects are seen as open systems with inputs and outputs, the wider organisational culture has an influence on project’s success (Zwikael and Globerson 2004). Although it is questionable how much of an actual input in the project system it represents, as sometimes the project office/team is comprised by team members coming from different organisations, it is widely recognised that organisational culture surrounds the activities of the project and influences its realisation. As a result, its influence has been recognised through the project context in PMBOK guide (PMI 2008). According to PMBOK (PMI 2008) the project context comprises of information on enterprise environmental factors as are government and industry standards, project management information systems, organisational structure and culture, existing infrastructure, personnel administration, and the organisational process assets that include standardised guidelines, work instructions, evaluation criteria, project plan templates, change control procedures and past project documentations. Accordingly, PMBOK (PMI 2008) identifies organisational culture as one of the four supporting knowledge areas (infrastructures) of the project concept, together with: organisational structure, systems and the project office. It is important to note that in the case of PMBOK, the organisational culture is the culture of the final beneficiary of the project and that not always is the parent organisation. Organisational culture and project structure Within the accepted project management methodology every project has a specific project life cycle (PLC) in which its activities are streamed. A generic life cycle is made out of the following phases: initiation, planning, implementation and closure. In general, in every endeavour planning is a very important process; however, in project management, planning is the crucial phase of the PLC. It is the phase that determines whether the project will be successful or not, i.e., whether it will accomplish the objectives within the set scope, budget, time and quality. As Taylor (2003) argues, most of the successful projects in the past decade had two common characteristics: (1) a lot of time is spent on planning the project and (2) almost half of the budget spent in the planning phase. According to Zwikael and Globerson (2004), in 2004, PMBOK guide consisted of 39 processes in the project management; out of them 21 or 54% are planning processes. The same percent is held today in 2008 PMBOK edition, although project processes increased to 41 (PMI 2008). This indicates that the planning process group accounts for a significant portion of the project manager’s work. Here it is good to note that the planning phase of the PLC is not a planning process group; rather a sum of all planning process groups in one project, accompanied with initiation, execution, control and closure process groups for development of each plan which is part of the integrated project plan as is the scope, schedule or cost management plan. According to the accepted project methodologies (OGC 2005) (PMI 2008) the planning and the development phase of the project life cycle results in two tangible deliverables/outcomes: 1. Formation and Organisation of the Project team/structure; and 2. Preparation of the Project Documentation (the project plan). A project’s structure is a formal structure which defines the reporting structures, processes, systems and procedures of a project. It defines the roles and responsibilities of every team member (Gardiner 2005). Depending on project objectives, project teams can be internal (comprised of members coming from the departments of one organisation), mixed and external (members hired for the duration of the project) (PMI 2008). Project managers are responsible for development of the project structures and teams. As the project aim is implementing new solutions and/or some type of changes in the organisation, the project requirements are for inputs coming from most of the organisational units and departments, if not all (Kerzner, 2009). As result there is a need to have team members from all concerned areas (Gardiner 2005, Field 2007). These are people with knowledge, skills and experience, who will bring insights from their departments and areas of work and will provide accurate information regarding the functioning of the organisation. Each member of the team must be selected on the base of knowledge, skills, and appropriate attitude that will enable successful completion of the project. In the process the project team goes through all five phases of group formation: forming, storming, norming, performing and mourning (Gardiner 2005). The storming phase is associated with the planning phase of the PLC, where teams are characterised with high level of communication and conflict. As the team moves from the storming to the norming and performing stage, productivity begins to increase, and this is associated with the implementation phase of the PLC. Project manger’s leadership role is very important in team formation, especially critical in the planning phase. According to Meredith and Mantel (2010), in the later phases of the PLC, motivation and leadership of team members should not be difficult, because plans are just executed. This is accurate provided that activities and deadlines have been negotiated with team members, team members know each other well and the team is in its maturity stage where conflicts are rare (Gardiner 2005). The organisational culture will have a significant influence on the internal communication and behaviour of project team members when the project team is internal, and the parent organisation is the beneficiary organisation, as are the new product development teams in a high-tech company (Taylor 2003). The same is empirically proved by Zwikael and Globerson (2004) which findings on the influence of project context and project planning processes on the quality of project plans, indicate that organisational processes have a significant impact on the quality of plans. The impact of environmental factors where organisational culture belongs, lag behind. This however, does not imply that organisational culture has no influence on project performance; as the findings show it has, rather it implies that organisations lack models for designing supportive PM infrastructures as is PM organisational culture. As a result of its significance and the lack of implementing models, it is important to assess organisational culture early in the planning phase of the PLC, and design appropriate project mechanisms to deal with it either as a risk element that needs to be mitigated, or as strength on which to build on. Either way, designing an appropriate project structure that encompasses the influence of organisational culture becomes a must. For the past couple of decades PM researchers and practitioners have focussed on using the matrix structure in organisations as the ideal supporting infrastructure together with culture for successful execution of projects. It emerged because of the frequent use of projects in organisational change and restructuring efforts, and the growth and globalisation of organisations. As a combination of the functional (fully vertical structure) and product structure (Gardiner 2005), it emphasized the horizontal and cross-functional element of cooperation among team members and departments. It became the choice of many contemporary organisations, as it favours flexibility, resource efficiency and a strong customer focus. Many organisations that introduced CRM programs in the past decade had many problems associated with its implementation. They all embraced a matrix approach in which the project structure is made of a team of team leaders from various departments, i.e. one team to make the research and software packages, another team to make the analysis on the different ways the company interacts with the customers, and a third team to develop the training programs for the salespersons. Several months after CRM introduction many companies find that salespersons although trained are refusing to use the system (Matta and Ashekns 2003). In this case the, organisational culture acts as an obstacle (core rigidity) in implementing i.e. using the project solution. Matta and Ashekns (2003) offer a model of a project structure that can be used for overcoming these culture barriers. The model is based on the introduction of High-rapid results teams. However, it is highly questionable whether their approach towards project structure is different from the PRINCE2 methodology of controlled environments. As an international organisation, the World Bank uses a matrix structure. When designing projects, a team of World Bank experts and their institutional beneficiaries in the countries (government institutions) “spent many months in preparation – conducting surveys, analyzing data, talking to people with comparable experiences in other countries, and so on” (Matta and Ashekns 2003, p. 110). Based on these findings, project strategists, designers, and planners make an educated guess about the major streams of work required to reach the goal. In most of the cases, the project objectives cover activities aimed at transforming government institutions, encouraging the creation of a private –sector, strengthening national institutions and similar. The organisational culture of the institutions beneficiaries of WB projects is taken into account but slows down the progress, as a result the change i.e. projects are long in duration, and if there is a mistake in the planning or in the implementation process, takes long time to see it. In 2000, on a project in Nicaragua aimed at improving the productivity of small farmers by 30% in 16 years, the WB decided not to follow its traditional project management procedures (Matta and Ashekns 2003). The same can be regarded as a test methodology (pilot). A new project structure was introduced, made of five teams consisting not only from members coming from the work streams of teh institutions involved, but as well representatives from the farmers as main beneficiaries, from the national and private diaries as main buyers of the milk and etc. These teams were named as rapid-results teams as they were results focused only in one area of the project scope, vertical and fast; i.e. focused on measurable results in areas covered by several departments, or even institutions (vertical), and fast i.e. accomplished within a short period of time. The introduction of these teams drastically increased expected project performance in Nicaragua, while its main beneficiaries- small farmers were not only informed on the changes, but became full participants in the project ensuring project outcomes ownership i.e. implementation. By taking this approach in designing the project structure which is very similar to PRINCE2 project structure formation, WB created an environment for faster and more efficient change not only in the transformation of the involved institutions (their culture included), but in the creation of effective procedures, policies and regulation aimed at faster societal change. The open communication and the effective participation of all involved ensured that the culture of the beneficiary institutions becomes a supportive of the implemented solutions. Conclusion Organisational culture, more precisely the culture of the project beneficiary organisation is an important factor that can determine the success or cause failure of the undertaken projects. Researchers have proved the relationship, but there still is a lack of adequate models for ensuring that organisational culture becomes a supportive project infrastructure. Nevertheless, if adequately assessed during the project planning phase, its potential negative influence can be transformed in a favourable environment when adequate mechanisms of participation and communication are implemented and all stakeholders and beneficiaries are present in the formal project structure. Part B – Project scheduling (1000) (a) Predecessors and successors for each activity Task ID Task Name Optimistic Time Most likely duration Pessimistic Time Predecessors Successors 1 A 1 2 4 - C 2 B 3 6 12 - C 3 C 1 2 3 A B - 4 D 2 4 5 A G H O 5 E 3 6 10 A H 6 F 2 5 7   H J 7 G 1 3 5 B D J L 8 H 1 3 4 D E F K L 9 I 1 2 6 K   10 J 2 5 6 G F N 11 K 1 2 3 H M N 12 L 2 5 6 G H M N 13 M 3 4 7 K L   14 N 5 8 12 J K L   15 O 4 8 10 D   (b) Calculation of the expected time and variance PERT deals with uncertainty in activity completition through the inclusion of three time estimates: Optimistic time – the shortest time in which the activity can be completed, within the third standard deviation from the mean with 1% probability of its occurrence; Most likely time – the time of completition with the highest probability of occurrence; Pessimistic time – the longest time period for completition of the activity and within three standard deviations from the mean. Activity timings in the PERT Model are calculated assuming beta probability distribution. It means that the expected time for each activity is calculated using a weighted average. The calculations are provided in the table below. Expected Time = (Optimistic +4xMost Likely + Pessimistic)/6 The variance is calculated on the assumption that the model recognizes three standard deviations between the optimistic and pessimistic scenarios, i.e. Variance = (pessimistic- optimistic)/6^2 Task ID Task Name Expected duration Variance 1 A 2 0.25 2 B 7 2.25 3 C 2 0.11 4 D 4 0.25 5 E 6 1.36 6 F 5 0.69 7 G 3 0.44 8 H 3 0.25 9 I 3 0.69 10 J 5 0.44 11 K 2 0.11 12 L 5 0.44 13 M 4 0.44 14 N 8 1.36 15 O 8 1.00 (c) Calculation of the Early Start, Early Finish, Late Start and Late Finish time for each activity including the float (slack) Earliest Time of Start Event (ETS) and Earliest Time of Finish Event (ETF) The Earliest Start Time (ETS) for each of the activities is calculated by assuming that all previous activities have been finished i.e. by using the forward pass mode. ETS is calculated by going from left to the right on the network diagram. Early Finish Time (EFT) is calculated by adding the duration time to the activity’s ETS i.e., the Early Finish time for the last activity of the project N is: EFTN =ETSN + TN = 16 + 8 = 24 days. Therefore, the minimum required time for the completion of the project is 24 days. Calculation of the Latest Time of Start (LTS) and Latest Time of Finish (LTF); Late Start Time (LTS) is the latest time that an event can occur and delay the project beyond the earliest completion date. To calculate LTS, we begin from the last event and work backwards. The LTS for the last event is the same as the ETS for the last event, namely. LTSN=ETSN= 16 days. Whenever there are many parallel activities as in this project, the following assumption is made – the LFT of the parallel activities = LFTN. It applies for these activities: LFTo = LFTN= 24; LFTM = LFTN= 24; LFTk = LFTN= 24; Float - Slack The total float is the scheduling leeway. If we start the activity as early as the ETS, as late as the LTS or somewhere in between, the same will not result in total delay of the project. The float is the difference between the LTS and ETS, i.e. the float of each activity equals: Fi = LTSi –ETSi The results are presented in the table below. Task Name Expected duration Prede-cessors Early Start Early Finish Suc-cessors Late Start Late Finish Float A 2 - 0 2 C 0 2 0 B 7 - 0 7 C 15 22 15 C 2 A B 7 9 - 22 24 15 D 4 A 2 6 G H O 4 8 2 E 6 A 2 8 H 2 8 0 F 5 - 0 5 H J 3 8 3 G 3 B D 7 10 J L 8 11 1 H 3 D E F 8 11 K L 8 11 0 I 3 K 13 16 - 21 24 8 J 5 G F 10 15 N 11 16 1 K 2 H 11 13 M N 14 16 3 L 5 G H 11 16 M N 11 16 0 M 4 K L 16 20 0 20 24 4 N 8 J K L 16 24 0 16 24 0 O 8 D 8 16 0 24 32 16 (d) Construction of the AON network A network is a diagram which shows the dependencies between the activities in a project (Field and Keller 2007). It is used to schedule these activities and plan the optimum use of resources. It is a project management tool developed for the purpose of providing a visual understanding of the project and ensuring control mechanisms over its execution. The network diagrams show the dependent relationships between the activities of the project and provide information on the timing of each activity. The Network Diagram for the activities outlined in Assignment B is provided in the graph that follows. Each node represents an activity labelled according to its name, and in each node there is information regarding its timing and duration in days. All nodes are networked creating an Activity On Node network (AON) – precedence network (Field and Keller 2007). (e) Critical Path The total project duration is 24 days. A final step in designing the network is calculating the critical activities. A critical activity is any activity which if delayed will delay the whole duration of the project by an equal amount of time. Critical activities are identified by applying two criteria: The ETS and the LTS must be equal at the each node; The Float must be equal to 0; All critical activities identify the critical path of the project. The Critical path is presented with red on the AON diagram, and the critical activities are coloured red in the provided Tables. (f) Probability for completing the project in 22 days For calculating the probability of finishing the project in 22 days, we have to calculate project variance and standard deviation. The project variance (σp2) is the sum of the variances of all critical path activities. In this case σp2 is 3,67, while the standard deviation is σp= 1,91. In the further calculation we calculate the Z-value assuming normal distribution. The Z-value is -1.0447. For this value of Z, the probability of occurrence is 14.81%. (g) Probability of completing the project in 23 days The probability for the project to end in 23 days is 30%. The Z-value is -0.5223. (h) Implications of the analysis The chosen method of the analysis and its calculations are explained in the text after each question. Basic managerial implications involve savings and less cost associated if the project finishes earlier that the expected time – 24 days. References and Bibliography Bredillet, C.,2007. From the Editor. Project Management Journal, 38(4), pp.2-4. Field, M..and L. Keller, 2007. Project Management. Thompson Learning. Gardiner, P., 2005. Project management: A strategic planning approach. Basingstoke, UK: Palgrave Macmillan. Kerzner, H., 2009. Project Management: A Systems Approach to Planning, Scheduling, and Controlling 10ed. Hoboken, NJ: John Wiley and Sons. Martin, J., 2002. Organization Culture. Newbury Park, Calif: Sage Publications. Matta, N., and Ashkenas, R.,2003. Why Good Projects Fail Anyway. Harvard Business Review, 81(9), pp.109-114.  Meredith, J.R.a.M.S.J., 2010. Project Management: A Managerial Approach, International Student Version, 7th Edition. UK: John Wiley & Sons. Office of Government Commerce (OGC), 2005. Managing Successful projects with PRINCE 2. London, UK: TSO & Blacwell. Project Management Institute PMI, 2008. A guide to the Project management Body of Knowledge (PMBOK Guide) 4ed. Atlanta: PMI. Schwalbe, K.,2009. Information Technology Project Management 6th ed. Boston: Cengage Learning. Standish Group. ,2003. Extreme CHAOS.[Assessed: 21.09.2010]. Available from: http://www.standishgroup.com/chaos/introduction.pdf Taylor, J. ,2003. Managing Information Technology Projects. American Management Association International. Zwikael, O.and Globerson, S.,2004. Evaluating the quality of project planning: a model and field results. International Journal of Production Research, 42(8), pp.1545-1556. Read More