Management Case Studies,
Related Case Studies (from Kerzner/Project 3rd Edition)
• • • • • •
Quasar Communications, Inc. Jones and Shephard Accountants, Inc.* Fargo Foods Mohawk National Bank
Workbook and PMP ®/CAPM ® Exam Study Guide, 10th Edition) • The Struggle with • Implementation • Multiple Choice Exam
Related Workbook Exercises (from Kerzner/Project Management
PMBOK® Guide, 4th Edition, Reference Section for the PMP® Certification Exam • Human Resource • Management
PMBOK® Guide, 4th Edition 2.4.2 Organizational Structure Chapter 9 Human Resource Management
During the past thirty years there has been a so-called hidden revolution in the introduction and development of new organizational structures. Management has come to realize that organizations must be dynamic in nature; that is, they must be capable of rapid restructuring should environmental conditions so dictate. These environmental factors evolved
* Case Study also appears at end of chapter.
from the increasing competitiveness of the market, changes in technology, and a requirement for better control of resources for multiproduct firms. More than forty years ago, Wallace identified four major factors that caused the onset of the organizational revolution1: G G G G
The technology revolution (complexity and variety of products, new materials and processes, and the effects of massive research) Competition and the profit squeeze (saturated markets, inflation of wage and material costs, and production efficiency) The high cost of marketing The unpredictability of consumer demands (due to high income, wide range of choices available, and shifting tastes)
Much has been written about how to identify and interpret those signs that indicate that a new organizational form may be necessary. According to Grinnell and Apple, there are five general indications that the traditional structure may not be adequate for managing projects2: G G G G G
Management is satisfied with its technical skills, but projects are not meeting time, cost, and other project requirements. There is a high commitment to getting project work done, but great fluctuations in how well performance specifications are met. Highly talented specialists involved in the project feel exploited and misused. Particular technical groups or individuals constantly blame each other for failure to meet specifications or delivery dates. Projects are on time and to specifications, but groups and individuals aren’t satisfied with the achievement.
Unfortunately, many companies do not realize the necessity for organizational change until it is too late. Management looks externally (i.e., to the environment) rather than internally for solutions to problems. A typical example would be that new product costs are rising while the product life cycle may be decreasing. Should emphasis be placed on lowering costs or developing new products? If we assume that an organizational system is composed of both human and nonhuman resources, then we must analyze the sociotechnical subsystem whenever organizational changes are being considered. The social system is represented by the organization’s personnel and their group behavior. The technical system includes the technology, materials, and machines necessary to perform the required tasks. Behavioralists contend that there is no one best structure to meet the challenges of tomorrow’s organizations. The structure used, however, must be one that optimizes company performance by achieving a balance between the social and the technical requirements. According to Sadler3: Since the relative influence of these (sociotechnical) factors change from situation to situation, there can be no such thing as an ideal structure making for effectiveness in organizations of all kinds, or...