Chapter 17: Processes for Operational Control in the Project-Based Organization


J. Rodney Turner, Ph.D.Erasmus University
Anne Keegan, Ph.D.Erasmus University

Project-based organizations require a different approach to their management than functional, hierarchical, line management approaches common in the 20th century. The latter works well where products are stable. During the latter half of the century, the nature of work changed so now every product is different, and markets and technologies change continuously. Classical management theories developed to manage mass production no longer apply; the new organization needs new theories for its management. We are researching the management of project-based organizations, to identify practices adopted internationally. Here, we report our findings about operations management practices adopted. We describe a process model for operations management, and show different approaches are used in its implementation depending on the size of projects undertaken and the number of customers. We describe different approaches in each of the four scenarios: large projects-few customers; large projects-many customers; small projects-few customers; and small projects-many customers.

Introduction

During the latter part of the 20th century, there was an evolution in the nature of organizations, their work, and their management, from the functional organization universally adopted in the first half of the century to the project-based organization (Drucker 1980; Hasting 1993; Turner 1999a). This was caused by the changing nature of work from mass production, with essentially stable customer requirements and slowly changing technology, to a situation where almost every product supplied could be against a bespoke desing, and technology and markets change continuously and rapidly. Whereas the design of the functional organization is underpinned by a strong theoretical base, that is, classical management theory developed in the 19th and early 20th centuries (Mintzberg 1979; Huczynski 1996; Morgan 1997), the design of the project-based organization has no such theoretical base. The project-based organization requires new theories for its management. With the aim of developing such a theory, we at Erasmus University Rotterdam are conducting an international research project to determine how project-based organizations are managed (Turner and Keegan 1999). In this chapter we present our findings on practices and processes adopted for the management of operations within the project-based organization.

We define the project-based organization (PBO), and show it requires different approaches to its management than those used successfully in functional, hierarchical, line management organizations. We describe a model for the management of the PBO, and show how the size and nature of customers and the projects undertaken lead to four different approaches to the structuring and management of operations. We describe how PBOs manage their operations in each of the scenarios of:

  • Large projects—few customers

  • Large projects—many customers

  • Small projects—few customers

  • Small projects—many customers.

To create customer-focused processes, organizations strive to maintain a one-to-one relationship between project teams and customers. This exists perforce in the first scenario. In the second scenario, an internal sales or marketing department manages the interface with the many customers, and acts internally as a few customers for the few large projects. In the third scenario, the organizations group projects into a few large programs of projects for their few customers. In the fourth scenario, many different approaches are adopted to manage the interface between the projects and the customers. These include:

  • The assignment of specific project roles to coordinate the network undertaking the projects.

  • The creation of an internal market to manage the interface between projects and customers.

  • The grouping of projects into programs, where each program has a few customers.

  • The use of matrix management.




The Frontiers of Project Management Research
The Frontiers of Project Management Research
ISBN: 1880410745
EAN: 2147483647
Year: 2002
Pages: 207

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