international project management- organizational structure

Masarykova univerzi ta

Ekonomicko-správní fakulta

Studijní obor: Podniková ekonomika a management

INTERNATIONAL PROJECT MANAGEMENT-

ORGANIZATIONAL STRUCTURE

Bakalářská práce

Vedoucí bakalářské práce: Autor:

Sylva Žáková TALPOVÁ Katarína VILLÍNOVÁ

Brno, 2013

Masarykova univerzita

Ekonomicko-správní fakulta

Katedra podnikového hospodářství

Akademický rok 2012/2013

ZADÁNÍ BAKALÁŘSKÉ PRÁCE

Pro: VILLÍNOVÁ Katarína

Obor: Podniková ekonomika a management

Název tématu: INTERNATIONAL PROJECT MANAGEMENT-

ORGANIZATIONAL STRUCTURE

Z á s a d y p r o v y p r a c o v á n í :

Aim:

The aim of this thesis is an organizational structure analysis of a selected international project

and a formal framework elaboration based on the state of the organizational structure,

eventually finding its weaknesses and a proposal of improvements, all with regard to the

international aspect of the project. Work procedure and methods used: relevant literature

research, organizational structure analysis, SWOT analysis, proposal of improvements

including economic point of view. An international project is selected by the student after the

consultation with the supervisor.

Rozsah grafických prací: dle pokynů vedoucího práce

Rozsah práce bez příloh: 35 – 45 stran

Seznam odborné literatury:

BLAŽEK, Ladislav. Management. vydání první. Praha: Grada, 2011. 191 s.

ISBN 978-80-247-3275-6.

DERESKY, Helen. International management :managing across borders and cultures

: text and cases. 7th ed. Boston: Prentice Hall, 2010. xii, 468 s. ISBN 9780136098676.

DOLEŽAL, Jan a Pavel MÁCHAL a Branislav LACKO. Projektový management

podle IPMA. 1. vyd. Praha: Grada, 2009. 507 s. ISBN 978-80-247-2848.

GOODERHAM, Paul N. a Odd NORDHAUG. International management :cross-

boundary challenges. 1st ed. Malden: Blackwell, 2003. xiii, 473. ISBN 0-631-23341-

5.

PHATAK, Arvind V. a Rabi S. BHAGAT a Roger J. KASHLAK. International

management :managing in a diverse and dynamic global environment. 2nd ed.

Boston: McGraw-Hill/Irwin, 2009. xvii, 540. ISBN 9780073210575.

Vedoucí bakalářské práce: Ing. Bc. Sylva Žáková Talpová

Datum zadání bakalářské práce: 28. 11. 2012

Termín odevzdání bakalářské práce a vložení do IS je uveden v platném harmonogramu

akademického roku.

…………………………………… …………………………………………

vedoucí katedry děkan

V Brně dne 28. 11. 2012

Jméno a příjmení autora: Katarína Villínová

Název bakalářské práce: Management mezinárodního projektu- Organizační struktura

Název práce v angličtině: International Project Management- Organizational Structure

Katedra: Podniková ekonomika a management

Vedoucí bakalářské práce: Ing. Bc. Sylva Žáková Talpová, Ph.D

Rok obhajoby: 2013

Anotace

Cieľom bakalárskej práce “Management mezinárodního projektu- Organizační struktura“ je,

ako už názov napovedá, analyzovať organizačnú štruktúru vybraného medzinárodného

projektu. Prvá časť poskytuje teoretické východisko k tomuto problému, ako aj kritéria, ktoré

sú použité k posúdeniu efektivity organizačnej štruktúry. Praktická časť sa sústredí na projekt

HELPS, ktorý je medzinárodným projektom s partnermi zo strednej Európy. Na získanie

potrebných dát na výskum bol použitý dotazník. Odpovede sú porovnané s kritériami. Na

základe SWOT analýzy je odporučená vhodná stratégia.

Annotation

The aim of the thesis “International Project Management- Organizational Structure” is, as

the name already indicates, to analyse the organizational structure of a selected international

project. The first part provides the theoretical background to this issue as well as criteria that

are used to assess the organizational structure effectiveness. The practical part focuses on

the HELPS project, which is an international project involving partners from Central Europe.

The questionnaire was used in order to gather the data necessary for the research. The answers

are compared with the criteria. The appropriate strategy is recommended on the basis of

the SWOT analysis.

Klíčová slova

Manažment, projekt, medzinárodný, organizačná štruktúra, efektivita

Keywords

Management, project, international, organizational structure, effectiveness

Declaration

I hereby declare that I wrote this thesis, “International Project Management-

Organizational Structure”, myself using the referenced sources only. I also agree with lending

and publishing of this thesis.

In Brno, May 17, 2013

the s igna tu re o f the au thor

I would like to thank my supervisor, Ing. Bc. Sylva Žáková Talpová, Ph.D., for her

numerous advices and support while writing this thesis.

Table of Contents 1 Introduction .............................................................................................................................. 9

2 Project Management .............................................................................................................. 11

2.1 Project Based Management ............................................................................................ 11

2.2 Project ............................................................................................................................. 12

2.3 Project Objective ............................................................................................................. 14

2.4 Project Team ................................................................................................................... 15

2.4.1 Organizational Workflow ........................................................................................ 16

2.4.2 Project Manager ....................................................................................................... 16

2.5 Project Restrictions ......................................................................................................... 16

3 International Management ..................................................................................................... 19

3.1 Culture ............................................................................................................................ 19

3.2 Communication ............................................................................................................... 20

4 Organizational Structure of a Project ..................................................................................... 23

4.1 Organizational Structures ............................................................................................... 23

4.1.1 Project Manager as Staff .......................................................................................... 23

4.1.2 Project Manager as Consultant ................................................................................ 24

4.1.3 Project Management as Stuff Function .................................................................... 24

4.1.4 Matrix Organizational Structure .............................................................................. 25

4.1.5 Task Force ................................................................................................................ 26

4.1.6 Totally Projectized Organization ............................................................................. 27

4.2 Comparison of Organizational Structures ....................................................................... 28

4.3 Criteria for the Selection of the Most Appropriate Organizational Structure ................. 29

4.4 Measures of Organizational Structure Effectiveness ...................................................... 31

5 SWOT Analysis ..................................................................................................................... 33

6 The HELPS Project ................................................................................................................ 35

6.1 Basic Characteristics of the HELPS Project ................................................................... 35

6.2 Project Funding ............................................................................................................... 37

6.3 Project Participants ......................................................................................................... 37

6.4 Working Packets ............................................................................................................. 39

7 Organizational Structure Analysis ......................................................................................... 41

7.1 Research .......................................................................................................................... 42

7.2 Evaluation ....................................................................................................................... 47

7.3 SWOT Analysis .............................................................................................................. 50

8 Results and Recommendations .............................................................................................. 53

8.1 Results ............................................................................................................................. 53

8.2 Recommended SWOT Strategy ...................................................................................... 53

8.3 WO Strategy ................................................................................................................... 53

9 Conclusion ............................................................................................................................. 57

Works Cited .............................................................................................................................. 59

Literary Sources .................................................................................................................... 59

Internet Sources .................................................................................................................... 60

List of Figures and Tables ........................................................................................................ 63

Figures .................................................................................................................................. 63

Tables .................................................................................................................................... 63

List of Enclosures ..................................................................................................................... 65

Enclosure 1- Questionnaire ................................................................................................... 65

9

1 Introduction The thesis deals with the organizational structure analysis of an international project.

It is divided into two parts. The first one is theoretical. It provides the basis for the practical

part. First of all, it focuses on specific features of a project management and provides the

definition of the term project. This chapter is followed by the characteristics of international

aspects. The main attention is paid to the organizational structures, their types and

specifications, as well as the criteria for selection of an appropriate structure. The theoretical

part ends by choosing the criteria that are used to assess the organizational structure

effectiveness in a concrete international project together with setting the theoretical basis to

the SWOT analysis.

The practical part provides the description of the HELPS project, which is an

international project involving 8 countries of Central Europe. The organizational structure of

this project is analysed on the basis of a questionnaire that has been filled in by the project

partners. The real situation is compared with the criteria. The organizational structure analysis

is followed by the SWOT analysis and a recommended strategy. This is done in order to

verify the main hypothesis: The organizational structure of the project is not effective with

regard to the project objectives.

The methods that are used in the thesis are:

Descriptive method- it is used to set theoretical basis as well as to depict the current

situation in the concrete project. The theory is based on the literature research. The

situation in the HELPS project is described according to the questionnaire that was

sent to 12 project partners.

Analytic method- it is used for the further analysis of the real situation in the project.

The organizational structure analysis is accompanied by the SWOT analysis that

identifies not just internal factors, which influence the effectiveness of the

organizational structure, but also external factors- opportunities and threats.

Comparative method- it is used to compare the real situation with the selected criteria

in order to assess the organizational structure effectiveness.

Deductive method- it is used to draw conclusions. On the basis of previous methods

the recommendations are provided.

10

11

2 Project Management

2.1 Project Based Management

Since there are persistently many changes in the world, every company does its best to

cope with this fact. One of the best possibilities how to react promptly and effectively to

changing conditions, is by implementing project management. Kerzner says that nowadays,

every company uses project management. The only difference is whether they are just good at

project management or whether they do it excellently.1

There are many definitions of the project management. One of the world’s most

respected associations uniting professional project managers, Project Management Institute

(PMI), defines project management as “the application of knowledge, skills and techniques to

execute projects effectively and efficiently. It’s a strategic competency for organizations,

enabling them to tie project results to business goals — and thus, better compete in their

markets.”2

Another useful definition provided by Lester adds some more features of the project

management: “The planning, monitoring and control of all aspects of a project and

the motivation of all those involved in it, in order to achieve the project objectives within

agreed criteria of time, cost and performance.”3

What the both these definitions have in common, is the fact that the project

management involves all the necessary activities using someone’s mental and physical

abilities, as well as appropriate technologies and methods in order to reach an aim, which is

the desirable state or change. The identification of a final goal is the very first step in

preparation of a project and it is discussed more deeply in the chapter 2.3 Project Objective.

In addition to this, Svozilová identifies five elements of project management, whose

interaction represents all the effort, knowledge, skills and methods applied during the project

management process. These elements are: project communication, team-work, project

1 KERZNER, H. BELACK, C. Managing complex projects. Hoboken, N.J: Wiley, 2010. ISBN 978-

047-0927-991.p. XV. 2 Project Management Institute [online]. 2013 [cit. 2013-03-04]. Available from WWW:

<http://www.pmi.org/About-Us/About-Us-What-is-Project-Management.aspx> 3 LESTER, A. Project management, planning and control managing engineering, construction and

manufacturing projects to PMI, APM and BSI standards. 5th ed. Amsterdam: Elsevier/Butterworth-

Heinemann, 2007. ISBN 978-008-0465-883.p.5.

12

lifecycle, project management parts (ten techniques and tools of project management applied

within a project life cycle) and organizational accountability.4

Project based management brings several advantages, but it is not always

implementable. The comparison of traditional management methods and project management

shows the following table:

Table n.1- Traditional management and project management comparison

Traditional management Project management

Financial resources provision Limited funding with respect to project needs

Predictability Uncertainty

Uniformity, repeatability Uniqueness

Asset management Cost controlling

Result controlling Controlling of procedures with respect to a

plan

Quality management according to results

inspection

Quality management provided by a plan and

preventive measures

Fixed number of workers Variable number of workers

Success measured by absolute performance in

selected indicators

Success measured by the degree of objectives

fulfilment

According to: SMUTNÝ, P. HÁLEK, I. Základy řízení projektů. 1. vyd. Brno: Masarykova

univerzita, 2008, 87 s. Svět environmentálních souvislostí. ISBN 978-802-1045-866.p. 20.

It is obvious that project management is not suitable in predictable situations, which

involve repeatable, routine activities (e.g. regular control and maintenance of machines or

repeated production), activities under stable conditions, those without considerable risks and

activities that last for a very long time.

2.2 Project

The term project is a key word for further discussion and the practical part of this

thesis also deals with an international project and that is why it is necessary to define this

4 SVOZILOVÁ, A. Projektový management. 2., aktualiz. a dopl. vyd. Praha: Grada, 2011, 380 s.

Expert (Grada). ISBN 978-80-247-3611-2.p. 19-20.

13

term. Every project is a unique sequence of events provided in order to achieve an objective

within a certain period of time. Kerzner states several project characteristics. These are5:

a specific objective of a project

exact start and end dates

financial resources (limited funding)

human and nonhuman resources

quality limits

and finally multifunctional nature of a project

Project objectives are various. Projects may be aimed to build a new company, to

introduce new products or technologies, to make a business plan, to build a housing estate or

a sport centre or just to organize some great social events. There are many possibilities and

each of them requires an individual approach and that is why every project is unique.

However all possible project objectives have one common feature- they have to be known in

advance.

As far as the time is concerned, every project must have stated its beginning and end.

The time is set also in advance during the planning and preparation of a project. It is not

an easy task and there are several methods used for performing the time analysis of a given

project. One of them is Critical Path Method (CPM). According to Richman, it is the most

often used method to plan a project. Its basic principle is to identify all the activities that are

needed for project fulfilment, as well as their duration. Using the network of all these

activities, the critical path is the path that requires the longest time, which is in fact

the minimal time that is necessary to complete the project.6

It is also very important to secure financial resources. Project funding is different than

enterprise economy. Projects have to very often apply for a grant or find some investors,

because they are not able to raise initial capital themselves. In case of the HELPS project that

is to be examined, 80% of total project budget is provided by European Regional

Development Fund.7 Another aspect of project funding is time. Not only financial resources,


047-0927-991. p. 3 6RICHMAN, L. Successful project management. 3rd ed. Saranac Lake, N.Y.: American Management

Association, c2011, xx, 206 p. ISBN 9780761215189. p.87-88. 7 ZDRUŽENIE MIEST A OBCÍ SLOVENSKA: Projekt HELPS [online]. Actualization 5.3. 2013 [cit.

2013-03-05] Available from WWW: < http://www.zmos.sk/projekt-helps.phtml?id3=73582 >

http://www.zmos.sk/projekt-helps.phtml?id3=73582

14

but also time during which it is possible to draw the money from funds is limited and must be

taken into account.

The term, human resources, means the usage of human labour, knowledge, skills and

abilities. Nonhuman resources include all the other ways and means such as finance,

techniques, methods and tools.

The term multifunctional is explained by Kerzner as a specific characteristic of

complex and international projects. There are always several areas that a project has to go

through as well as more companies or institutions that are participating in a project. So

the principal task of a project manager is to incorporate and manage all these subjects and

performance.8

2.3 Project Objective

As it has already been mentioned, setting of project goals or objectives is the first and

the most important step. General characteristics of an appropriate objective should accomplish

the following requirements known under the acronym SMART9:

S - specific, significant, stretching

M - measurable, meaningful, motivational

A - agreed upon, attainable, achievable, acceptable, action-oriented

R - realistic, relevant, reasonable, rewarding, results-oriented

T - time-based, timely, tangible, trackable

One project does not necessarily have to have only one goal. It is possible to reach

more goals within one project. Sometimes fulfilment of partial objectives leads to

accomplishment of an objective of a higher level. Blažek says that such objectives are in

hierarchical relations and the reason of completion of hierarchically lower objectives is to

achieve the higher one. He also mentions three types of relations when objectives are

equivalent10

:


047-0927-991. p. 3 9 Project Smart [online]. 2013 [cit. 2013-03-06]. Available from WWW:

<http://www.projectsmart.co.uk/smart-goals.html> 10 BLAŽEK, L. Management: organizování, rozhodování, ovlivňování. 1. vyd. Praha: Grada, 2011,

191 p. Expert (Grada). ISBN 978-80-247-3275-6.p. 97-98.

15

complementary (completion of one objective contributes to completion of another

one)

competitive (objectives are in a contradiction and it is not possible to achieve all of

them at the same time)

neutral (completion of objectives does not affect each other)

2.4 Project Team

Human factor is a key element of a successful project. A project team consists of

people whose task is to do all the necessary activities within a project. Members of a project

team are usually selected on a temporary basis and after the project execution the team is

dissolved. The workers belonging to a project team are let know in advance what they are

supposed to do, as well as what the deadlines of performing their duties are. In respect to their

obligations, they are assigned certain rights and responsibilities. Even though they do many

things individually, they should not lose the sense of belonging to a team and they must be

ready to cooperate. What is the most important thing is their ability to work towards

a common objective.

There are many ideas what the general features of successful project teams are, but the

following list is extensive enough11

:

common objective- members of a project team should not follow own goals but they

are supposed to identify themselves with the goals of the project

mutual accountability- people do not respond just to their leader but also to the other

members within the team

mutual responsiveness- people should be able to react to managers instructions or to

the norms and nobody should fall behind the others

constructive conflicts- it is neither possible nor desirable to avoid conflicts, because

when a team is able to deal with them constructively, something new and useful may

arise

mutual trust- it is an essential condition to trust each other in a team

mutual openness and information providing- every member of a team must have all

the necessary information to create own professional judgement in matters concerning

the whole team

11 DOLEŽAL, J. MÁCHAL P. LACKO, B. Projektový management podle IPMA. 1. vyd. Praha:

Grada, 2009, 507 p. Expert (Grada). ISBN 978-80-247-2848-3.p. 120-121

16

self-awareness- every team has its own identity and the members are aware of this fact

2.4.1 Organizational Workflow

In project management, as well as in any other kind of management, there is

a relationship between someone who directs and manages and someone who is directed or

managed. When considering leadership, three terms must be defined12

:

Authority- it refers to the power that somebody is given in order to make important

decisions

Responsibility- it refers to duties of an individual to complete all the tasks in the most

effective way

Accountability- it refers to the ability of an individual to accomplish the assignments

Accountability= Authority + Responsibility.

2.4.2 Project Manager

Project manager is the most important person and has the greatest responsibility in

a project as a whole. The main tasks of a project manager are to choose a good team, to

organise and coordinate the work and to provide the control. The Project Management

Institute defines good project managers as those who are able to identify themselves with

project goals, to motivate and inspire the project team, to work under pressure and who are

very flexible.13

They should also be some kind of mediators among all the members of the

project, as well as all the interest groups.

2.5 Project Restrictions

In managing a project, there are three main restrictions or challenges: time, costs and

quality. This concept is also known as Triple Constraint of the project management, where

these three primary limits of a project are called schedule, budget and scope.14

12 KERZNER, H. Project management: a systems approach to planning, scheduling, and controlling.

9th ed. Hoboken: John Wiley, c2006, 1014 s. ISBN 04-717-4187-6.p.94-95. 13 Project Management Institute [online]. 2013 [cit. 2013-03-04]. Available from WWW:

<http://www.pmi.org/en/About-Us/About-Us-Who-are-Project-Managers.aspx> 14 Project Management Knowhow [online]. [cit. 2013-03-09]. Available from WWW:

<http://www.project-management-knowhow.com/triple_constraint.html>

17

Figure n.1- Triple Constraint

scope

schedule budget

Own creation

These three factors are mutually dependent. It means that a change of one of them

results in changes of the others. If we want to enlarge the scope, for example, there will

definitely be a change in the schedule, because it will require more time, but also costs will be

higher. Or if we want the project to be finished earlier there will be a negative impact on

the quality and scope or the additional costs will be needed.

18

19

3 International Management

This chapter deals with an international aspect of management because the HELPS

project is an international project. The international management does not differ considerably

from the standard management, but there are some features that must be taken into

consideration. In case of international management, there may appear cultural differences due

to different economic, legal and political systems. Another drawback can be a language

barrier and the international aspect also influences the organizational structure.

3.1 Culture

There are many different definitions of culture. However for the purposes of this

thesis, it is useful to think about culture as societal culture involving shared values,

assumptions and objectives of a particular society and having a considerable effect on

management, especially at the personal level. The behaviour at the organizational level is not

so influenced by the culture due to the process of convergence (it means that management

styles became more similar to one another).15

On the other hand, there are still many countries in the world that refuse to accept

foreign values and this is called divergence.16

However these are the countries manly in

the Middle East, Africa and Latin America. The HELPS project described in the practical part

includes only members of Central Europe, where the process of convergence prevail.

There are several value dimensions that explain differences in behaviour and may

cause misunderstandings, problems or conflicts:

Individualism vs. collectivism- in countries with individualistic tendencies, people

usually do not think so much about the others, beside their own families and interests

and they are not interested in the needs of the society as a whole. On the other hand,

collectivists have a strong feeling of belonging somewhere and that is why social and

common interests are in the middle of their attention. They also prefer team work to

individual work.

15 DERESKY, H. International management: managing across borders and cultures : text and cases.

7th ed., International ed. Upper Saddle River, N.J: Pearson Education, 2010. ISBN 01-325-4555-

1.p.106. 16 PHATAK, A. V. BHAGAT, R. S. KASHLAK, R. J. International management: managing in a

diverse and dynamic global environment. 2nd ed. Boston, Mass.: McGraw-Hill Irwin, c2009, xviii,

540 p. ISBN 00-732-1057-9.p.115.

20

Time orientation- managers in some countries (Asian Tigers) are oriented on

the future and they are also prepared to undergo some loses at present to ensure gains

in the future. In America or in Europe managers want to get profit as soon as possible.

Time can be also considered in terms of punctuality. The Germans and Swiss are

supposed to be punctual and precise that can be hardly said about the Slavs and people

from eastern countries in Europe.

Universalism vs. particularism- the problems may also arise between universalists,

who tend to strictly obey and follow rules and particularists, who are more subjective

and focus on emotions and relationships.

Political stability- is an important factor because politically stable and also

economically stable countries are considered to be trustworthy for cooperation or

investment and likely to be chosen as project partners.

Power distance- according to Deresky, this term refers to the level of recognition of

power inequality. He says that if superiors and subordinates tend to consider each

other as equal, it may lead to harmony and cooperation.17

Further values could have been added but this is enough for the purposes of this thesis.

3.2 Communication

One of the problems in international co-operation may be language barrier as well. It

is very useful when project managers can speak foreign languages needed in communications

with their project partners, because communication with the help of translators prolongs and

worsens the whole process, especially when they are not professionals in a particular area.

One of the possibilities how to avoid bringing the services of translators into play, is to use

an international language (English, French, Spanish…) that the both parties understand.

We distinguish high-context cultures (Middle East, Asia, Africa), which convey part

of the meaning explicitly and low-context cultures (the USA, Germany, Switzerland), where

the context is not so important.18

17 DERESKY, H. International management: managing across borders and cultures : text and cases.

7th ed., International ed. Upper Saddle River, N.J: Pearson Education, 2010. ISBN 01-325-4555-

1.p.112. 18 PHATAK, A. V. BHAGAT, R. S. KASHLAK, R. J. International management: managing in a


540 p. ISBN 00-732-1057-9.p. 338.

21

Phatak and col. also identify some barriers of communication especially due to

different cultures19

:

Beliefs about what is correct to communicate

The status of the sender and receiver

Attitude toward the content of the message

Stereotypes of the other culture

Cultural preferences regarding the medium used

Education level and professional competence of the sender and receiver

19 PHATAK, A. V. BHAGAT, R. S. KASHLAK, R. J. International management: managing in a


540 p. ISBN 00-732-1057-9.p. 116.

22

23

4 Organizational Structure of a Project

4.1 Organizational Structures

A proper organizational structure is an indispensable condition of a successful

project. Since every project is unique, it requires an individual approach and that is why it is

not possible to say that one particular organizational structure is the most effective and

efficient in general for all projects. It is important to choose and adjust the organizational

structure to the project needs. There are several possibilities of organizational structures that

differ in a size of a project manager authority, responsibility and accountability. Very

important factor is also an international aspect of the project that is reflected in

the organizational structure as well.

There are several authors who deal with the issue of the organizational structures of

projects. Blažek identifies three structures20

: project coordination, projectized structure and

matrix structure. Mishra and Soota identify these six options that will be described more

deeply in the following chapters21

: project manager as a member of organization staff, project

manager can be a consultant, one of the staff functions is project management, matrix

organizational structure, task force and finally totally projectized organization. These

structures can also be modified for the purposes of the international or global management in

order to get further specialization and economies of scales22

.

4.1.1 Project Manager as Staff

This type may be compared with Blažek’s project coordination. When dealing with

small occasional projects, it is very useful to create a staff position of a project manager or co-

ordinator. His task is to coordinate the work in functional departments for the purposes of

the project. However he has in fact no formal authority over the workers and that is why he

cannot make decisions. He “serves as focal point for receiving project related information

20 BLAŽEK, L. Management: organizování, rozhodování, ovlivňování. 1. vyd. Praha: Grada, 2011,

191 s. Expert (Grada). ISBN 978-80-247-3275-6.p. 76-77. 21 MISHRA, R. SOOTA, T. Modern project management [online]. New Delhi: New Age International

(P) Ltd., Publishers, c2005 [cit. 2013-03-10]. ISBN 9788122425505.p. 74-80. Available from WWW:

<http://site.ebrary.com/lib/masaryk/docDetail.action?docID=10318692&p00=mishra%20 soota> 22 Compare: DERESKY, H. International management: managing across borders and cultures : text

and cases. 7th ed., International ed. Upper Saddle River, N.J: Pearson Education, 2010. ISBN 01-325-

4555-1

http://site.ebrary.com/lib/masaryk/docDetail.action?docID=10318692&p00=mishra%20%20soota

24

and seeks to promote the cause of project by rendering advice, sharing information and

providing assistance.”23

However he is the specialist who may be very helpful.

Figure n.2- Project Manager as Staff

According to: MISHRA, R. SOOTA, T. Modern project management [online]. New Delhi: New

Age International (P) Ltd., Publishers, c2005 [cit. 2013-03-10]. ISBN 9788122425505. Available from

WWW: <http://site.ebrary.com/lib/masaryk/docDetail.action?docID=10318692&p00=mishra%20

soota>

4.1.2 Project Manager as Consultant

In some cases it is not even necessary to create a position of a project manager.

The chief executive just hires an external consultant who analyses and provides

the information for him. However both these structures are definitely not suitable in complex

or international projects such as the project HELPS.

4.1.3 Project Management as Stuff Function

This type of organizational structure is similar to the project manager as staff. In this

case, the project manager is a specialist whose task is to give advices to individual functional

departments in an organization. This implies that he has some kind of authority and power to

23 MISHRA, R. SOOTA, T. Modern project management [online]. New Delhi: New Age International

(P) Ltd., Publishers, c2005 [cit. 2013-03-10]. ISBN 9788122425505. Available from WWW:

<http://site.ebrary.com/lib/masaryk/docDetail.action?docID=10318692&p00=mishra%20 soota>




25

make decisions in terms of schedule, for example, but even though he still cannot direct stuff.

The final decisions make functional groups and the project management is responsible only

for its advices.24

4.1.4 Matrix Organizational Structure

Matrix organizational structure is a combination of a project structure and line-and-

staff structure. There are several functional areas (for example, production, marketing and

innovation) that are set up along the horizontal axis. Along the vertical axis, there are several

projects or project groups. These project groups use the resources (especially human

resources) from functional areas in order to complete project objectives. The main problem

arises from the shared authority of a project and functional managers. So the workers are

subordinate to both of them, which may lead to conflicts. That is why the senior manager can

decide whose authority will be dominant or whether the authorities of project and functional

managers will be equivalent.25

Matrix organizational structure can be found in organizations that deal with projects

quite often. This structure also serves the purpose in highly innovative organizations, where

the results of projects are completely new products or technologies for manufacturing

enterprises.26

It is also widely used in international cooperation, where the project groups can

use the resources from various international organizations. So instead of functional areas of

one organization there would be more organizations with their functional areas along

the horizontal axis.

To sum up the advantages of the matrix this can be said:

it is not so demanding in terms of human resources

it is flexible under unstable conditions

it enables better coordination and control

it enhances team work and enables specialization due to division of labour

However we can find there also some disadvantages:


(P) Ltd., Publishers, c2005 [cit. 2013-03-10]. ISBN 9788122425505. Available from WWW:

<http://site.ebrary.com/lib/masaryk/docDetail.action?docID=10318692&p00=mishra%20 soota> 25 BLAŽEK, L. Management: organizování, rozhodování, ovlivňování. 1. vyd. Praha: Grada, 2011,

191 s. Expert (Grada). ISBN 978-80-247-3275-6.p. 77-78. 26 BLAŽEK, L. Management: organizování, rozhodování, ovlivňování. 1. vyd. Praha: Grada, 2011,

191 s. Expert (Grada). ISBN 978-80-247-3275-6.p. 78.


26

the main drawback can be seen in shared authority, which may cause confusion

the personnel must be very flexible with good interpersonal relationships

Figure n.3- Matrix Organizational Structure

According to: DAFT, R. L. Organization theory and design. 3rd ed. St. Paul: West Pub.

Co.,c1989, xxi, 602 p. ISBN 03-144-6341-0.p.221

4.1.5 Task Force

Task force organizational structure is something like an intermediate between matrix

organizational structure and totally projectized organization. The authority of the project

manager is clearly defined. So the project manager can decide what should be done, when and

how it should be done, as well as at what price. He has the authority over the personnel from

functional departments of the organization. They work under his commands even though they

continue to be under organization administration. They are assigned so called “task force” and

they work full time for the project or this work is given a higher priority.27


(P) Ltd., Publishers, c2005 [cit. 2013-03-10]. ISBN 9788122425505.p.78. Available from WWW:



27

4.1.6 Totally Projectized Organization

In large and complex projects, the task force becomes independent from the parent

functional organization. It can be said that it is like a small organization within a larger one,

where the project manager acts as the chief executive with more specialists who have

important functions, as well as responsibilities. The project manager has high power and

authority but also the full responsibility for the performance of the project.28

This structure

can be also used in case of an international management so that specialists responsible for

individual divisions are from various countries.

Figure n.4- Totally Projectized Organization

According to: MISHRA, R. SOOTA, T. Modern project management [online]. New Delhi: New

Age International (P) Ltd., Publishers, c2005 [cit. 2013-03-10]. ISBN 9788122425505. Available from

WWW: <http://site.ebrary.com/lib/masaryk/docDetail.action?docID=10318692&p00=mishra%20

soota>

This project organizational structure has many advantages:

a project manager has complete authority, high flexibility and freedom in making

decisions

no problems with conflicting interests of a project manager and functional areas







28

there is a special project personnel with no other functions or obligations to

the organization as a whole, which also increases their loyalty to the project

good communication and information flow

However there are also some disadvantages29

:

high costs because of doubling some equipments and personnel in case of multi-

product companies

preserving the personnel longer than needed

no improvements of technology

little chance of career growth

little cooperation and technical advice sharing with other projects

highly demanding management of functional specialists

4.2 Comparison of Organizational Structures

Mishra and Soota claim that functional organization is suitable only if operations are

continuous and routine.30

In such cases the coordination is not so important and the specialists

are grouped to perform just one function. However they lose the big picture of the project and

their view is too narrow. The problems may also arise due to lack of addressed authority and

accountability, which slows down the decision making process.

On the other hand in a project structure that is primarily oriented on products, there are

several specialists in various disciplines answerable to a manager. Such structure is more staff

demanding and that is why it can be recommended for big projects. Multidisciplinary

structure brings a broader perspective and clear accountability and authority speed up

the whole process.

The matrix organizational structure is something like a compromise between

functional and project organization. It is not so staff demanding as the totally projectized

organization and project managers have also some authority.

29 Docstoc. [online]. [cit. 2013-03-11]. Available from WWW:

<http://www.docstoc.com/docs/47814635/Pure-Matrix-Organizational-Form-Vs--Project-

Management> 30 MISHRA, R. SOOTA, T. Modern project management [online]. New Delhi: New Age International




29

All these characteristics of the already mentioned project organizational structures

must be kept in mind while deciding, which of them is the most suitable and appropriate for

a particular project. However there are many other features and criteria for selection of

an organizational form to be discussed in the following chapter

4.3 Criteria for the Selection of the Most Appropriate Organizational

Structure

Once the organization has decided that management by project is the best option,

the second important step is to choose the most appropriate organizational structure. There are

several approaches to this problem. According to Kerzner, the most important factors that

have an influence on the selection of an organizational form are following31

:

size of the project

project duration

earlier experience with project management organizational forms

position and attitudes of upper-level management

project setting

obtainable resources

unique features of a particular project

Another author, Shikra, identifies five principles of an appropriate organizational

design. These are the characteristics of that should be considered in order to attain an effective

organizational structure32

:

Division of Labour – labour should be divided among departments to ensure

specialization

Unity of Command- it should be clear who the superior is with a well established line

of commands

Authority and Responsibility- authority and power should correspond with

responsibility

Spans of Control- adequate centralization and decentralization and levels of control

31 KERZNER, H. Project management: a systems approach to planning, scheduling, and controlling.

9th ed. Hoboken: John Wiley, c2006, 1014 s. ISBN 04-717-4187-6.p.115. 32 SHIKHA, S. Principles of Organizational Design. choo.fis.utoronto.ca. [online].[ cit. 2013-04-06]

Available from WWW: <http://choo.fis.utoronto.ca/FIS/Courses/LIS1230/LIS1230sharma/od1.htm>

30

Contingency Factors- these factors include environment and technology, as well as

task variability and problem analyzability

Very interesting and helpful approach has also Blažek. He claims that

the organizational structure is always unique and a particular organizational structure that is

highly effective in one organization might be completely useless in another organization. He

also identifies five factors that must be taken into consideration while drafting

the organizational structure33

:

strategy- to determine the sector or the segment, in which the organization operates

and to specify the portfolio of products or services

technology- the process used to transform inputs into outputs

territory- its influence is important with respect to the product features

size- an organizational structure in a small organization tends to be rather informal

while big organizations have complex and formal structures

culture of an organization- it refers to the loyalty of workers and their commitment to

the organization and its aims

The last approach to be mentioned considers these five components to be essential for

an effective organizational form34

:

leadership- it is important to have a vision and priorities and also a cohesive team

decision making and structure- every member of a team must know what his

obligations are and there must be clear accountabilities for decisions, as well as

the organizational structure must support objectives

people- good selection of personnel with adequate skills and talent; performance

leading to objectives accomplishment

work processes and system- programmatic work processes must be implemented with

a priority; processes and systems should be effective and efficient as well

culture- values and actions of a “high performance” and ability to change

33 BLAŽEK, L. Management: organizování, rozhodování, ovlivňování. 1. vyd. Praha: Grada, 2011,

191 s. Expert (Grada). ISBN 978-80-247-3275-6.p. 79-83. 34 Bain & Company organizational toolkit and Bridgespan analysis; Designing an Effective

Organizationstructure. [online]. [cit. 2013-04-06] Available from WWW:

<http://www.google.cz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCgQFjAA&url=http

%3A%2F%2Fwww.bridgespan.org%2FWorkArea%2Flinkit.aspx%3FLinkIdentifier%3Did%26ItemI

D%3D3552&ei=63qZT-qoNI2fOtWa3NAG&usg=AFQjCNHWhMWP-52E2CIfdFuj-

WyL54Ualw&sig2=myhS9pmt1sqL6Tt8LW3pKg>

31

Following these hints, in chapter 4.4, the criteria of the organizational structure

effectiveness are established. These criteria are compared with the real situation in the

practical part of this thesis, in the HELPS project.

4.4 Measures of Organizational Structure Effectiveness

To measure an effectiveness of an organizational structure, it is necessary to set

certain criteria in order to compare the reality in the given project with the ideal desirable

situation. In this thesis the following criteria are used:

1. Number of organizational levels- nowadays there is a tendency to reduce the number

of organizational structure levels because having too many levels increases costs and

complicates the management. On the other hand, lack of organizational levels may

slow down the processes, because the managers would have too much to do.

2. Information flow- the information channels should be short enough to save time and

resources. Organizational structure should be clear and definite in order to avoid

misunderstandings and enable prompt information flow. Everybody must know who

his superiors and subordinates are and who he receives information from and who he

should send information to.

3. Formalization- degree of formalization is also important criterion, because too many

rules slow down the process and do not provide enough opportunities for creative

work. In case of highly educated and skilled professional managers who know what to

do and who are often prepared for improvisation, the rules are not so needed. On

the other hand, lack of rules may cause problems and lead to tendency to follow own

interests rather than common objectives.

4. Flexibility- organizational structure should be flexible and dynamic in order to adapt

to changing conditions and development of the external environment.

5. Personnel- the methods of hiring the staff should be clear and consistent. It is not just

skills and abilities of personnel that are very important, but also their mutual

relationships, organization culture and their will to cooperate in order to reach

the common objectives. Reliability and mutual trust enhance the cooperation.

6. Accountability- power should be adequate for completion of an individual's

obligations. Everybody should be responsible only for things and events he can

influence.

7. Specialization- the amount of work should be divided effectively and each member of

a project team should know what his duties are. The work should be performed by

32

the most competent employees with adequate education, skills and experience.

The amount of work must also motivate. The number of workers should be adequate

so that they do not have too much to do but also the amount of work should not be too

small.

8. Time- the time period needed to accomplish particular processes should be the shortest

possible.

33

5 SWOT Analysis

SWOT analysis is a strategic analysis used to identify strengths and weaknesses that

are the internal factors and opportunities and threats that are the external factors of an

organization (SWOT analysis can be used in various fields, not just in organizations). The

main aim of the SWOT analysis is to create a strategy for further development in

a consistence with the organization objectives35

.

Figure n.5- SWOT strategies

Own creation

When strengths, weaknesses, opportunities and threats are arranged in a matrix

(Figure n.6), we get four combinations or better said four strategies that can be derived from

the SWOT analysis:

SO strategy combines and maximizes strengths and opportunities

WO strategy is aimed to use opportunities in order to overcome weaknesses

ST strategy uses strengths to eliminate threats

WT strategy minimizes weaknesses and threats

35 GRASSEOVÁ, M. Analýza podniku v rukou manažera: 33 nejpoužívanějších metod strategického

řízení. 2. vyd. Brno: Computer Press, 2012, 325 s. ISBN 978-80-265-0032-2.p.297.

34

35

6 The HELPS Project

In the practical part of this thesis, the main attention will be paid to the HELPS

project. Following the description of the project, there will be provided its analysis, especially

the analysis of its organizational structure. Finally, the data gained by the research will be

compared with the measures defined in the theoretical part in order to assess the effectiveness

of the organizational structure.

6.1 Basic Characteristics of the HELPS Project

The name HELPS is a short form of Housing and Home-care for the Elderly and

vulnerable people and Local Partnership Strategies in Central European cities. This project

started in October 2011 and its duration is 36 months until September 2014.36

The project runs under the umbrella of the Managing Authority (MA). The MA is City

of Vienna, represented by Department for EU – Strategy and Economic Development and it

provided the funding from ERDF (see the chapter 6.2 Project Funding). Following

the agreement about funding, the leading partner, Friuli Venezia Giulia Region (Italy), is fully

responsible for the whole project.37

As the name already indicates, the project is aimed to help the elderly and vulnerable

people in Central Europe, especially in urban areas. Europe undergoes serious demographic

changes and the population becomes older. According to estimates published by the HELPS,

“By 2060, EU population over 65 is expected to double, while the number of over 80 is

estimated to increase even more, almost tripling.”38

Such numbers should definitely not be

ignored and population aging nowadays becomes a real problem that must be dealt with. This

issue also brings several other unfavourable elements, such as vulnerability and social

exclusion. That is the reason why the project was initiated.

The HELPS project tries to deal with the above mentioned aspects and comes with six

challenges39

:

36 ZDRUŽENIE MIEST A OBCÍ SLOVENSKA: Projekt HELPS [online]. Actualization 5.3. 2013

[cit. 2013-04-06] Available from WWW: < http://www.zmos.sk/projekt-helps.phtml?id3=73582 > 37 According to the information provided by Association of Towns and Communities of Slovakia 38 HELPS: HELPS [online]. Actualization 6.4. 2013 [cit. 2013-04-06]. Available from WWW:

<http://www.helps-project.eu/project/description> 39 The same


36

Access to information- the aim is to provide information about services that help

the elderly and disable to remain active and on available services supporting active

and self-sufficient .

Accessibility of daily life spaces and urban areas through innovative planning

encouraging autonomy and facilitating social integration.

Professional healthcare- there are still new needs in terms of healthcare and it is

necessary to support this area and provide human resources.

Social linkages- this is to prevent social exclusion, while the elderly and vulnerable

need some social contact in their neighbourhood, based on solidarity and providing

assistance when needed.

Adoption of ICT solutions- these solutions should strengthen self-sufficiency.

Care services- to support care systems, their maintenance and efficiency.

Figure n.6- the HELS Project Challenges

According to: HELPS: HELPS [online]. Actualization 6.4. 2013 [cit. 2013-04-06]. Available

from WWW: <http://www.helps-project.eu/project/description>

37

6.2 Project Funding

The project is funded by the Central Europe programme. It is the programme of

the European Union “that encourages cooperation among the countries of Central Europe to

improve innovation, accessibility and the environment and to enhance the competitiveness

and attractiveness of their cities and regions.”40

Central Europe invests money to projects of

public and private organizations in Austria, the Czech Republic, Germany, Hungary, Italy,

Poland, the Slovak Republic, Slovenia and the Ukraine. The programme gets finance from

the European Regional Development Fund running in years 2007-2013. The total budget of

the HELPS project is 2 670 229 EUR.41

6.3 Project Participants

The project partners are public, as well as private organizations that are property

independent. There are 12 project partners (PPs) and 3 associated partners (APs) participating

in the HELPS project from 8 European countries42

:

Friuli Venezia Giulia Region (Italy)- this is a leading partner (LP) whose task is to

create social politics, to manage social and health system and to redistribute financial

resources. Its aim is to improve services and home care.

Samaritan Burgenland (Austria)- PP2- it provides emergency rescue services and

expects international exchange of know-how, experience and results, as well as

housing solutions in target groups.

Institute of Sociology, Academy of Sciences of the Czech Republic- PP3- it deals with

sociological theories and methodologies, does research and provides education. Its aim

is to get knowledge from international research and apply innovative approach to

housing policy.

German Association for Housing, Urban and Spatial Development- PP4- it is a neutral

multidisciplinary platform oriented on professional exchange of information about

urban and regional development. It tries to improve living conditions for elderly and

expects the creation of database with experience and good practices.

40 Central Europe: Central Europe [online]. [cit. 2013-04-06]. Available from WWW:

<http://www.central2013.eu/about-central/central-europe-programme/> 41 ZDRUŽENIE MIEST A OBCÍ SLOVENSKA: Projekt HELPS [online]. Actualization 5.3. 2013

[cit. 2013-04-05] Available from: < http://www.zmos.sk/projekt-helps.phtml?id3=73582 > 42 ZDRUŽENIE MIEST A OBCÍ SLOVENSKA: Projekt HELPS [online]. Actualization 5.3. 2013

[cit. 2013-04-05] Available from WWW: < http://www.zmos.sk/partneri-

projektu.phtml?id3=73582&module_action__193400__id_art=19047#m_193400>


http://www.zmos.sk/partneri-projektu.phtml?id3=73582&module_action__193400__id_art=19047#m_193400

http://www.zmos.sk/partneri-projektu.phtml?id3=73582&module_action__193400__id_art=19047#m_193400

38

Municipality of Leipzig (Germany)- PP5- it wants to maintain and create new working

places and creates conditions for investing. It expects from the project the data about

living conditions of elderly.

Municipality of Debrecen (Hungary)- PP6- it creates conditions for strong and

autonomous public services. It wants to increase the quality of services for elderly.

Hungarian Maltese Charity Service- PP7- one of the biggest organizations in Hungary

providing social services and healthcare. They want to test “web-care” and improve

services.

Veneto Region (Italy)- PP8- it provides wide range of social services such as home

care and financial support (mainly for elderly). It seeks for an opportunity to test

innovative activities and tools and to create local action plans.

Poznan Supercomputing and Networking Centre (Poland)- PP9- it manages national

network of information technologies and wants to use it for providing information

about social care.

Slovenian Federation of Pensioners’ Organizations- PP10- it is a federation of local

associations of pensioners that supports an active life of elderly and its aim is to

establish an Info Point to facilitate access to information and services.

Association of Towns and Communities of Slovakia- PP11- it gathers more than 2,800

towns and communities in Slovakia. It cooperates with many stakeholders and

financial and educational institutions. It is also responsible for social and housing

policies.

Institute for Sociology, Slovak Academy of Sciences- PP12- is a research organization

of the Slovak Academy of Sciences that provides analyses of settlement structures

changes at the national level. It aims to perform workshops and publish research

reports and results of pilot projects.

Municipality of Brno (The Czech Republic)- AS1- the second largest city in the Czech

Republic wants to support the elderly people to stay in the living environment of their

choice. It expects to get some knowledge and experience as well as know-how in

terms of policy for elderly people from other cities.

Institute for Social Research (Italy)- AS2- it is an independent private research

institute for evaluation and monitoring support and technical assistance to public

administrations and to private and public institutions. Its aim is to understand the issue

of housing of the elderly and vulnerable people and to create tools for dealing with

the situation.

39

Ministry of Labour, Family and Social Affairs (Slovenia)- AS3- it is an association of

professionals in social and family politics with a special department for the elderly

people. It expects international exchange of knowledge and realization of the best

projects.

6.4 Working Packets

There are five working packets within the project43

:

WP1- Management and Control- responsible partner: Friuli Venezia Giulia Region

(Italy)- it provides financial and administrative management, monitoring and

evaluation of the project, communication with partners and financial reports.

WP2- Project Publicity and Dissemination- responsible partner: Friuli Venezia Giulia

Region (Italy)- it is responsible for propagation of outputs and results, creation of

communication plans, creation of the logo and other activities.

WP3- Research Activity- responsible partner: Institute of Sociology, Academy of

Sciences of the Czech republic- there are several research topics concerning housing

systems and housing policies in member countries.

WP4- Pilot Actions- responsible partner: Municipality of Debrecen (Hungary)- in each

participating country, one pilot project should be implemented by Local Support

Groups.

WP5- Strategies- responsible partner: Friuli Venezia Giulia Region (Italy)- on

the basis of results from the Pilot actions, Local Action Plans on housing and care

provision will be drown.

The WP1 and WP2 run throughout the whole project in parallel with other WPs. WP3,

WP4 and WP5 are implemented following each other. The partners that are responsible for

individual WPs are not subordinate to the leading partner of the project, which is in fact

the leader of three WPs.

43 According to the information provided by Association of Towns and Communities of Slovakia

40

41

7 Organizational Structure Analysis

The organizational structure of the project is very complex. It involves 15 partners

from 8 countries, so this definitely gives it the status of an international project.

The organizational structure of the HELPS project as whole can be identified as the matrix

structure, but there are some modifications that should serve the purposes of the project.

Along the horizontal axis, there are 5 working packets that are to be performed. Along

the vertical axis there are 12 project partners, 3 associated partners and external workers.

Their roles in implementing tasks within individual working packets are various. Some of

them contribute more, some of them less. Everything depends on the initial agreement signed

before the project launch. Each project partner is involved in each working packet, but this

does not imply for associated partners.

The project partners have also their own organizational structures corresponding with

the requirements imposed on them, as well as the abilities and capacities of their home

organizations. These substructures can be identified as project groups or projectized

structures.

The role of associated partners is not as significant as the role of project partners. They

are not included in all WPs. The project uses also the services of external experts who are not

directly the members of project partners or associated partners.

For successful management and completion of the project, the Managing Committee

was established. It consists of representatives of individual project partners, as well as one

representative of the leading partner. The committee meetings are regular and

the representatives of associated partners are also invited with their advisory capacities.

The Managing Committee is responsible for project monitoring and realization. It

decides about the budget changes and tries to solve conflicts among the project partners. It

can also manage working groups when dealing with concrete tasks associated with the

project.

For better imagination, the organizational structure of the HELPS project is described

in the following figure. The information provided by Association of Towns and Communities of

Slovakia were used.

42

Figure n.7- Matrix Organizational Structure of the HELPS Project

Participation and cooperation

Associated partners do not contribute to each WP

Services of external workers and experts

Own creation

7.1 Research

Following the aim of the thesis the adequate methods must have been selected. There

are not many literary sources that deal with international project management so

43

the knowledge from project management in general was used with respect to the international

aspects. In terms of methodology, Sychra's thesis was used as a source of inspiration44

.

For the purposes of the practical part of the thesis, a research was done among

the project partners to find out whether the organizational structure of the project is effective

or not. The questionnaire was send to project partners and it was filled in by 9 of them. In

addition to this Mr Matteo Apuzzo, the contact person of Friuli Venezia Giulia Region (Italy)

and Roman Staník, the contact person of Association of Towns and Communities of Slovakia

were very helpful and willing to answer even more questions concerning the practical part.

The questions were created so as to get the information about the current situation in

the HELPS project. The obtained data were analysed and compared with the criteria discussed

in the chapter 4.4, in order to evaluate the organizational structure effectiveness and thus to

verify the initial hypothesis that the organizational structure of the project is not effective with

regard to the project objectives. The questions, their substantiations and answers are discussed

in the following part of the thesis.

1. Which partner of the HELPS project do you work for?

The first question is aimed to identify the project partner, which the individual who

fills in the questionnaire works for, because the questionnaire was sent collectively. This

question is just informational and does not contribute to the research about the organizational

structure effectiveness.

2. How many levels does the organizational structure of the project have?

The second question finds out what the number of organizational levels is. Most of

the respondents answered that there are two levels (managing committee and project partners’

offices). Some answers were 3, but this not the result of poor organizational clarity.

The reason is that the organizational structure of individual partner organizations has two

levels as well. The ideal answers should have been 2 or 3.

3. How many levels should the organizational structure of the project have according to

you?

44 SYCHRA, Pavel. Management of the Multilateral International Projects. Brno, 2012. Diplomová

práce. Masarykova univerzita Ekonomicko-správní fakulta.

44

The third question was asked to get information about the subjective opinion of

the partners, whether the number of organizational levels is adequate. All of them answered

the same number as in the previous question, which implies that they are satisfied with

the number of organizational levels.

4. Only for leading workers: How many subordinates do you have?

5. Only for subordinate workers: How many fellow-workers do you have?

These two questions ask in fact the same thing. The only difference is whether

the person, who answers them, is a manager or a subordinate. The aim was to find out

the number of workers directly subordinate to one manager. According to the research there

are mostly two or three workers. It is not a big number. This may imply that the workers have

much to do, but on the other hand the managers are not so busy with their subordinates.

The question may also correspond with the questions n. 17 and 18 that ask how difficult and

time consuming the tasks to be done are.

6. Do you always know who your superior is?

The sixth question was asked in order to find out whether the organizational structure

is clear and everyone knows who to respond to. It was also asked for the purposes of

assessment of the informational flow. There were more options (see the whole questionnaire

enclosed). Based on the responses, it may be said that there are no problems and the workers

always know who their superior is even though some of them have more than one superior.

7. How would you characterize information flow?

This question directly asks what the quality of informational flow is. The respondents

could choose one option on the scale from one to seven (1 as very bad information flow and 7

as very good information flow). Most answers were 4 and 5, which implies that

the information flow is neither bad nor very good, but it is slightly above the average.

However this is not very satisfactory and it should be improved.

8. Have you ever experienced problems caused by cultural differences? (values,

approaches, language barrier)

This question was asked to assess the international aspect of the project, because

problems with information flow can be caused not only by ineffective organizational

structure, but also by a language barrier or different approaches and cultures. The respondents

45

were given the possibility to write down their opinions. Some of them have never experienced

any problems (definitely not a language barrier because they all understand and use English as

the main language of project communication). However the partners from Germany and

Austria mentioned different working approaches and varying attitudes of project partners,

which may cause slight conflicts, misunderstandings or lack of information when they are

necessary and this fact may negatively influence the quality of information flow. This is quite

typical of these two nations because they are known to be punctual and they like everything to

be done on time.

9. How would you characterize the degree of formalization?

This question was aimed to find out how the project partners are confined by rules

(there was again a scale from 1 to 7). Answers to this question were various ranging from 2

(few rules) to 7 (a lot of written rules). The problem is that each project partner has its own set

of rules in their home organizations.

10. How would you characterize organizational structure in terms of flexibility?

One of the criteria for assessment of the organizational structure is also its flexibility.

The HELPS project is aimed to deal with demographical changes so it is set in a dynamic and

changing environment. That is why the effective organizational structure should cope with

these conditions. The respondents were asked to assign one option on a seven-tier scale (from

1 as very inflexible up to 7 as very flexible). The answers were mostly 4 and 5, one was 3. It

implies that the organizational structure is not very flexible but on the other hand, it is not

static and there is a possibility to adapt to changing conditions.

11. Can you describe the way how the project personnel is selected and hired?

This question was oriented on project personnel and the ways how the workers had

been chosen. These ways are not uniform for all the project partners. Everything depends on

the national legislations and staff availability in the organizations. In addition to this, no new

workers are hired for the HELPS project at the moment.

12. Are your fellow-workers or subordinates reliable?

This question also focuses on the project personnel. There were more options to

choose the answer. The aim was to get some information about personnel reliability and

mutual relationships. Most of the respondents consider their subordinates or fellow-workers to

46

be reliable but they also mention some occasional problems. However this is nothing unusual.

In general it can be said (based on the opinions of project partners) that the project

participants trust each other, they can rely on each other and good mutual relationships

significantly contribute to effectiveness of the project organizational structure.

13. Does authority correspond with responsibility?

This question was asked in order to get information about accountability, which is one

of the criteria of organizational structure effectiveness. There were more possible options or

the respondents could write down their own opinion. Almost all of them stated that

the authority is always accompanied with an adequate amount of responsibility. Only two

project partners answered that they have occasionally experienced some slight discrepancies

between power and amount of responsibility. However they did not further comment on that

so it is probably an exceptional situation.

14. Who is responsible for decision making?

The fourteenth question also brought some information about authority and

responsibility but it was oriented on the degree of centralization as well. The aim was to get

a deeper insight into the power relationships. This was an open question and the respondents

really used the possibility to express their opinions. The answers can be sum up by saying that

the LP representatives are responsible for the project in general, WP leaders are responsible

for individual WPs and each project partner has its own project leader. When considering

individual partners the situation can be various. Some have very flat hierarchy and

the decision making is the common task, or they have a project manager who is responsible

for project activities and a director who is responsible for internal procedures. Even though it

may seem confusing, the system works well because the members of the project always know

who is responsible for the decision making.

15. How would you characterize the degree of centralization?

An answer to this question gives a framework to the previous answer. This is again

one of the questions with 7-tier scale of answers (1 being decentralised and 7 being

centralised). All but one of the answers were four. So it implies that the structure is neither

centralized nor decentralized. This corresponds with the previous question and its answers.

The project partners seem to be satisfied with this system because there is some kind of

hierarchy but it is not so strict.

47

16. Is your work in the project time-consuming?

The sixteenth question asked about the time necessary to spend on project activities.

The respondents could again choose one of the seven options (from 1 –work is not very time-

consuming up to 7- work is very time-consuming). The aim was to get known how busy they

are. The answers were in this case various. The busiest are the workers of the LP, PP10 and

PP11 while the work is not so time-consuming for PP4 and PP5.

17. Are your tasks difficult to accomplish?

This question (using 7-tier scale of answers from not very difficult- 1 up to very

difficult-7) was aimed to reveal how difficult the requirements imposed on the project

workers are. The answers were again various, but with similar distribution as in the previous

question. This implies that if work is time- consuming for the workers it is also difficult.

However the problem is that it is unequally distributed and some partners contribute more

than the others.

18. Is the time period of accomplishment of individual processes appropriate?

The last question concerns the time needed to perform the processes in the project.

Time is a very important criterion of effectiveness. Only two respondents were not satisfied

with the amount of time spent on individual activities. The others considered the time

appropriate with regard to the difficulty of the processes.

7.2 Evaluation

Based on the answers to the questionnaire, the following table was created. It depicts

the individual criteria, numbers of questions concerning that criteria and the ideal state

(considered to be effective for the organizational structure) compared with the real situation in

the organizational structure of the project.

48

Table n.2- Comparison of the Reality with Criteria

Criterion Question Ideal state Reality

1.

Number of

organizational

levels

2, 3 The lowest possible (ideally 2-

3) There are only 2 levels

2. Information flow 6, 7, 8

The shortest possible

information channels and it

should be clear who to respond

to

The information channels are

short it is clear who to respond

to but there are some problems

3. Formalization 9

Adequate amount of written

rules so that everyone knows

what to but they should not be

too confining

Not uniform, it depends on

national legislations

4. Flexibility 10

The organizational structure

should be able to adapt to

changing conditions

The organizational structure is

flexible enough

5. Personnel 11, 12

Personnel should be hired

consistently with regard to the

project culture and cooperation

Process of hiring depends on

the national legislations but

the cooperation is adequate

6. Accountability 13, 14,

15

Authority should correspond

with reliability and it should be

clear who is responsible for

decision making

Authority corresponds with

reliability and responsibility

for decision making is clear

7. Specialization 4, 5, 16,

17

Appropriate division of labour

and motivating amount of work

The labour is not divided

effectively

8. Time 18 The shortest possible The time is appropriate

Own creation

1. Number of organizational levels- there are only two organizational levels in

the HELPS project. However this number is considered to be adequate. The project

partners were asked (questions n. 2 and 3) what the real situation about the number of

levels is and how much levels they would expect. Following their answers it can be

said that the reality fulfils their expectations so the organizational structure is effective

with regard to this criterion.

49

2. Information flow- in an effective organizational structure the information flow should

be without any problems. The information channels are not very long in case of

the HELPS project, but most of the respondents of the questionnaire do not consider

the information flow to be ideal (question n. 7). The problem may have been caused

by the fact that some workers have more superiors and there could have been troubles

with shared authority and confusion of workers who to respond to. However this

assumption was rejected by the answers in question n. 6, where all the respondents

answered that they always knew who their superior was even though there were more

superiors. The issue was brought to the light by the question n. 8, where some of

the respondents complained about different working approaches of partners from

different countries, as well as lack of information.

3. Formalization- the set of rules is not uniform for all project partners. This fact was

revealed by the question n. 9 as well as further communication with the project

partners. The individual organizations vary significantly with respect to the degree of

formalization. Those with a lot of rules may be considered to be too strict and slow

partners that spend too much time with administration and bureaucracy. On the other

hand those with few rules can be considered to be too liberal and unsystematic and

maybe less trustworthy. However it is not so great drawback of the organizational

structure and the project partners do not consider any assimilation of sets of rules

among the individual organizations.

4. Flexibility- as it has already been mentioned, the HELPS project is set in a dynamic

and constantly changing environment. In fact the main idea of the project is to react to

demographic changes and population aging. Even though the project is expected to

last only for 3 years, there can always emerge new problems, new tendencies or issues

to be concerned. That is why the organizational structure cannot be stable and there

must be the possibility of modification and adaptations with respect to the needs of the

external environment. On the other hand, too flexible structure would not be suitable,

because it would be rather chaotic. On the basis of the research (question n. 10), it can

be said that the organizational structure is not very flexible but it is definitely not

static. So the organizational structure flexibility meets the needs of the project and is

adequate.

5. Personnel- the methods of hiring the personnel are again various and dependent on

national legislations. However the mutual relationships, trust and cooperation towards

50

common objectives is ensured (based on answers to questions n. 11 and 12). This is

seen as a great advantage and strength of the organizational structure.

6. Accountability- this criterion was judged according to the answers of questions 13, 14

and 15. The organizational structure has adequate degree of centralization and

the power relationships are clear and consistent. It means that it is always known who

is responsible for decision making and the authority corresponds with responsibility.

So it is also a motivation for the workers to perform their tasks in the best possible

way.

7. Specialization- to assess the organizational structure according to this criterion,

the answers to questions n. 4, 5, 16 and 17 were used. The number of project workers

in each organization is very low (only 2-3 workers). This does not require high

demands from the project managers. However the problem is that some workers seem

to be overworked because they consider their tasks to be difficult to accomplish and

their work to be very time-consuming while there are some workers who do not have

so many duties. That is why the labour is not divided effectively. The low number of

project workers in individual organizations can be compensated by high number of

project partners and the amount of work should be redistributed.

8. Time- most of the respondents considered the time necessary for accomplishment of

the processes to be optimal and adequate. Only PP10 and PP11 were not fully

satisfied, but it is caused by the fact that their amount of work is too time-consuming

and difficult. So the problem is in division of labour.

7.3 SWOT Analysis

From the previous evaluation of the organizational structure effectiveness, the SWOT

matrix is created. The strengths are those features that contribute to the effectiveness of

the organizational structure, while the weaknesses are those that cause its ineffectiveness. As

far as opportunities and threats are concerned, these factors are external and the HELPS

project cannot influence them. However they have also a significant impact on

the organizational structure effectiveness.

The strengths and weaknesses were evaluated by the points that indicate the amount of

their contribution to the effectiveness or ineffectiveness. The points were assigned by

the method of allocation of ten points. This method would be more objective if there were

more experts who would individually assign the points and calculate the average for each

item.

51

In case of opportunities, the points were assigned according to their attractiveness for

the organizational structure as well as their time horizon and probability of occurrence.

The similar process was also with the threats, but instead of the attractiveness, their negative

impacts were concerned.

Table n.3- SWOT matrix

Own creation

Since the strengths and weaknesses were already discussed in the previous chapter,

let’s focus on the opportunities and threats. The first opportunity to be dealt with is

the continuous development of communication systems, which make the work easier and

faster in many various fields and the project management is not an exception. That is why this

is a great opportunity for improvement of the organizational structure effectiveness of

the HELPS project. Since it is an international project involving members from different

countries, it is not easy to have meetings very often. However the communication is very

important and in case of the situations when the personal meetings are not possible,

the project partners can rely on the communication systems that save not just time, but also

financial resources spent on travelling.

Another opportunity may be the usage of information technologies and especially

project managing tools. Information technologies are useful for gathering the data, their

analysis, processing and storing that also contributes to the effective work. For better

Analised area: Organizational strucutre of the HELPS project

Strengths Weaknesses

-Number of organizational levels (5)

-Time (5)

-Accountability (4)

-Flexibility (4)

- Personnel and good relationships (4)

-Information flow (5)

-Specialization (4)

-Formalization (3)

Opportunities Threats

-Developing communication systems (6)

-IT and project managing tools (5)

-Political and legislational differences in countries

(4)

-Cultural differences (2)

52

management, project management tools can be used. They help manage, plan and organize

project resources and processes (see chapter 8.3). It must be said that these information

systems and communication technologies are being constantly improved and it is only

a matter of financial resources necessary for their acquisition.

On the other hand, the external factors that may cause problems are political and

legislative differences among countries that participate in the project. This is reflected mainly

in the different working conditions (working hours, pension scheme, salaries income taxes

etc.), methods of hiring the personnel, economic situation or political stability.

Cultural differences such as different language, values and approaches to the work

may also cause problems such as language barrier, non-uniformity of working processes,

different approaches to time, money and other resources.

53

8 Results and Recommendations

This chapter deals with the results, comments on the initial hypothesis and provides

recommendations. It also selects a strategy on the basis of the SWOT analysis.

The opportunities to be discussed are valid not only in the HELPS project but in any other

projects.

8.1 Results

It can be said that the organizational structure is according to the most criteria

effective. So the initial hypothesis is rejected. What is quite surprising is the fact that even

though the HELPS project is organized into the matrix structure, there are no problems with

shared authority and the power relationships are clearly defined. Another problem might have

been caused by the fact that there are a lot of project partners, which sets high demands on

the coordination, but this seems to be all right probably due to adequate amount of

centralization and good interpersonal relationships.

8.2 Recommended SWOT Strategy

In case of the HELPS project the most suitable strategy seems to be the WO strategy

that tries to seize the opportunities in order to overcome the weaknesses. In case of ST and

WT strategies, it would be quite difficult to prevent the threats because the political,

legislative and cultural differences are a strong barrier but on the other hand, their prevention

would not be so necessary because the project partners are all from Central Europe and the

differences among them are not so extremely significant. As far as the SO strategy is

concerned, this is not so widely used in practice and again it would be rather difficult to use

the strengths of the organizational structure in order to get benefits from the opportunities.

That is why the WO strategy is strongly recommended for the HELPS project.

8.3 WO Strategy

The weaknesses have already been discussed. That is why this chapter proposes

the ideas how the opportunities can be used to overcome the weaknesses.

The opportunities are identified in the form of developing communication systems and

information technologies. In case of communication systems it is nowadays possible to

communicate via internet, to organise videoconferences or to use social networks. All these

options save time as well as financial resources and are more effective than travelling to

the meetings. Since the partners of the HELPS project are from 8 European countries,

54

the communication is provided mostly by using mails and phones, but there is a room for

improvement.

Another opportunity is provided by the sophisticated project management software.

These tools effectively help to manage all the necessary activities in the project, as well as

human and non-human resources. There are offered quite a lot of such technologies. Here are

some of them:

Clarizen45

- this project software helps to manage projects, tasks, resources and budget.

There is an option to try it for free for 30 days. The price depends on the type

(professional, enterprise, unlimited) ranging from $24,95 to $44,95 monthly per user.

Clarizen has also versions for apps.

Wrike46

- it also offers the free trial. The price varies according to the number of users

and storage space. Up to 5 users and 2 Gb storage space, it is for free. With 5 users and

5 Gb, the price is $49 per month. The price rises with number of users and storage

space up to $199 (for 50 users and 100 Gb storage space). The advantage is that this

product supports iPhone and Android apps.

SmartDraw47

- it offers only 7 day trial period. It helps to solve everyday business

problems in various fields. It is available on the app store. There are three versions:

SmartDraw Standard ($197), SmartDraw Business ($297) and SmartDraw Enterprise

($497). These sums are total, not monthly as in previous examples.

PMPackage48

- it is simple and easy to use this product that based on the spreadsheet.

The price is $45 in total without monthly payments.

It is rather difficult to assess the advantages of these products. It cannot be calculated

what benefits and savings they bring. However they definitely make the work easier and

faster. It depends on the concrete project, its needs and financial sources to choose and buy

these products.

In case of the HELPS project, PP9- Poznan Supercomputing and Networking Centre

in Poland, which manages national network of information technologies, is also responsible

45 Clarizen [online]. [cit. 2013-05-01]. Available from WWW: <http://www.clarizen.com/> 46 Wrike [online]. [cit. 2013-05-01]. Available from WWW: <http://www.wrike.com/tour/#manage-

multiple-projects> 47 SmartDraw [online]. [cit. 2013-05-01]. Available from WWW: <

http://www.smartdraw.com/specials/projectchart.asp?id=130940&gclid=CL7F0c2UhbcCFTIQtAodTx

8ACg> 48 PMPackage [online]. [cit. 2013-05-01]. Available from WWW: < http://www.pmpackage.com/>

55

for IT services within the project and it might sponsor the acquisition of recommended project

management tools or provide their own tools and software. However the budget was not

provided by this partner.

56

57

9 Conclusion

The centre of attention of this thesis is the organizational structure analysis of

the international project. The theoretical background, stated in the first part, is based on

literary, as well as internet sources concerning management, project management and

organizational structures classification. All this is done with respect to the international status

of the HELPS project even though the sources in this field are not so widespread. This

provides prospects for the future because project management can better function in current

dynamic world than traditional management and the international cooperation also brings a lot

of advantages such as economies of scales, shared resources and exchange of knowledge.

That is why it might be said that international project management will definitely become

more frequent in practice and also better theoretically represented in literature.

The practical part deals with the HELPS project. The data gathered by

the questionnaire are compared with the criteria. The research, analysis and comparison lead

into conclusion that the initial hypothesis is rejected in favour of the alternative hypothesis

that the organizational structure of the project is effective with regard to the project

objectives. Even though there are some problems in terms of information flow, division of

labour and different degrees of formalization of partner organizations within the project, these

setbacks are not so serious to confirm the initial hypothesis that the organizational structure of

the project is not effective with regard to the project objectives.

The thesis also suggests the appropriate strategy following the SWOT analysis. At the

end, there are recommendations aimed not only for the HELPS project, but they can be

implemented in any other international projects.

58

59

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63

List of Figures and Tables

Figures

Figure n.1- Triple Constraint, p. 17

Figure n.2- Project Manager as Staff, p. 24

Figure n.3- Matrix Organizational Structure, p. 26

Figure n.4- Totally Projectized Organization, p. 27

Figure n.5- SWOT strategies, p. 28

Figure n.6- the HELS Project Challenges, p. 36

Figure n.7- Matrix Organizational Structure of the HELPS Project, p. 42

Tables

Table n.1- Traditional management and project management comparison, p. 12

Table n.2- Comparison of the Reality with Criteria, p. 48

Table n.3- SWOT matrix, p. 51

64

65

List of Enclosures

Enclosure 1- Questionnaire

Questionnaire 1. Which partner of the HELPS project do you work for?

Friuli Venezia Giulia Region (Italy)

Samaritan Burgenland (Austria)

Institute of Sociology, Academy of Sciences of the Czech republic

German Association for Housing, Urban and Spatial Development

Municipality of Leipzig (Germany)

Municipality of Debrecen (Hungary)

Hungarian Maltese Charity Service

Veneto Region (Italy)

Poznan Supercomputing and Networking Center (Poland)

Slovenian Federation of Pensioners’ Organizations

Association of Towns and Communities of Slovakia

Institute for Sociology, Slovak Academy of Sciences

Municipality of Brno (The Czech Republic)

Institute for Social Research (Italy)

Ministry of Labour, Family and Social Affairs (Slovenia)

2. How many levels does the organizational structure of the project have?

(an open-ended question)

3. How many levels should the organizational structure of the project have according to

you?


4. Only for leading workers: How many subordinates do you have?


5. Only for subordinate workers only: How many fellow-workers do you have?


6. Do you always know who your superior is?

Yes, I have only one superior.

Yes, but I have more superiors.

Sometimes, I am not sure, who my superior is.

Other.

7. How would you characterize information flow?

Very bad information flow (1, 2, 3, 4, 5, 6, 7) Very good information flow

8. Have you ever experienced problems caused by cultural differences? (values,

approaches, language barrier)


9. How would you characterize organizational structure in terms of flexibility?

Very inflexible (1, 2, 3, 4, 5, 6, 7) Very flexible

10. How would you characterize the degree of formalization?

Few rules (1, 2, 3, 4, 5, 6, 7) Al lot of written rules

11. Can you describe the way how the project personnel is selected and hired?


12. Are your fellow-workers or subordinates reliable?

Yes, they are very reliable.

Yes, they are but sometimes there are problems.

No, they are often unreliable.

Other.

13. Does the authority correspond with responsibility?

Yes

Usually yes, but not always

No

Other

14. Who is responsible for decision making?


15. How would you characterize the degree of centralization?

Decentralised (1, 2, 3, 4, 5, 6, 7) Centralised

16. Is your work in the project time-consuming?

Not very time-consuming (1, 2, 3, 4, 5, 6, 7) Very time-consuming

17. Are your tasks difficult to accomplish?

Not very difficult (1, 2, 3, 4, 5, 6, 7) Very difficult

18. Is the time period of accomplishment of individual processes appropriate?

It takes a lot of time (1, 2, 3, 4, 5, 6, 7) Everything is done on time

Date post:	01-Jan-2017
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international project management- organizational structure

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