review the present organizational structure for addressing future operations of the company. Based on the review of some twenty projects of the company last year, over fifty per cent of the projects which the company did required interactions between four or more departments. The remaining fifty per cent of the project require only the work of one functional department. Mr. Hood is considering adopting the project management structure for the bank to be able to handle larger and more complex projects in the future.
Project management structure allows the company more flexibility, thus, the company can respond better to the changing environment. During the discussion of Tom Hood, President of First Security Bank of Cleveland, and Ray Dallas, one of the bank’s vice presidents, several issues about restructuring to project management were raised. The variety of the projects that First Security Bank of Cleveland handles has an impact on the structure that the bank will adopt. Projects vary from simple to complex ones.
Simple projects are those that require only one or a few people to work on it and do not need the interaction of several functional departments while complex projects are those that require the interaction of four or more departments and manned by up to thirty or more people. If the bank adopts the project management structure, the management of the small projects will be a problem. The bank can adopt a variety of structure like adopting project teams for large and complex projects but small projects will be assigned to one person or a task force team or to one department.
If the bank adopts a variety in its structure, another issue is raised, the readiness of the employees to adapt to such structure. Also, if the bank adopts such structure, there might be confusions on the reporting relationship. To whom should each manager report the progress or status of its team’s work? Some people/managers are becoming more title-oriented so the issue on giving proper titles was also discussed.
The issues raised by Mr.Tom Hood are the following: Should each project head be called a project manager, even if the project requires only one person? Should all project manager report to the same boss, even if one manager has thirty people working on the project and the other manager has none? Mr. Hood points out that these issues could lead to power struggles or power dominance within the organization and he wants to avoid this because it can easily disrupt the operations of the organization.
Another challenge that adopting the project management structure poses is how top management would evaluate the performance of the project managers. The issue of progress tied up with the number of people that each project manager controls may come out during the evaluation process. Compensation of project managers is also an important matter that needs to be discussed as giving proper compensation plays an important role in attracting, developing and maintaining effective and competent project managers.
In designing the proper compensation system for project managers, the varying perceptions and varying motivations of the managers should be considered. There are some managers that are title-oriented and there are some that are money- oriented. 2. Given the above issues on adopting project management structure, should First Security Bank of Cleveland adopt it? And if project management structure is adapted, will the banking community adopt to it? Mr. Hood does not want to be the pioneer or leader in adopting such structure because it might be risky for the bank.
Mr. Hood has a conservative outlook and he’d rather be a follower to such endeavor than to be the first or the leader. 3. The size and complexity of the new computer project created through the leadership of Tom Hood, the president of the company, severe integration problems which the present traditional organization was unable to cope. Hence, there is a need for project manager who could bring the project to success and handle the integration of work across functional lines.