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The project management group was headed up by a vice president and included the full-time personnel.” This arrangement suggests a Projectised structure. Briefly describe at least THREE (3) pros and THREE (3) cons of this setup.

The project management group was headed up by a vice president and included the full-time personnel.” This arrangement suggests a Projectised structure. Briefly describe at least THREE (3) pros and THREE (3) cons of this setup.

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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“The project management group was headed up by a vice president and included the full-time
personnel.” This arrangement suggests a Projectised structure. Briefly describe at least THREE (3)
pros and THREE (3) cons of this setup. 

Quasar Communications, Inc. (QCI), is a thirty-year-old, $350 million division of Communication Systems International, the world's largest communications company. QCI employs about 340 people of which more than 200 are engineers. Ever since the company was founded thirty years ago, engineers have held every major position within the company, including president and vice president. The vice president for accounting and finance, for example, has an electrical engineering degree from Purdue and a master's degree in business administration from Harvard. QCI, up until 1986, was a traditional organization where everything flowed up and down. In 1986, QCI hired a major consulting company to come in and train all their personnel in project management. Because of the reluctance of the line managers to accept formalized project management, QCI adopted an informal, fragmented project management structure where the project managers had lots of responsibility but very little authority. The line managers were still running the show. In 1989, QCI had grown to a point where most of their business base revolved around twelve large customers and thirty to forty small customers. The time had come to create a separate line organization for project managers, where everyone could be shown a career path i company and company could benefit by creating a body of planners and managers dedicated to the completion of a project. The project management group was headed up by a vice president and included the following full-time personnel: - Four individuals to handle the twelve large customers - Five individuals for the thirty to forty small customers - Three individuals for R&D projects - One individual for capital equipment projects The nine customer project managers were expected to handle two to three projects at one time if necessary. Because the customer requests usually did not come in at the same time, it was anticipated that each project manager would handle only one project at a time. The R&D and capital equipment project managers were expected to handle several projects at once. In addition to the above personnel, the company also maintained a staff of four product managers who controlled the profitable off-the-shelf product lines. The product managers reported to the vice president of marketing and sales.
Transcribed Image Text:Quasar Communications, Inc. (QCI), is a thirty-year-old, $350 million division of Communication Systems International, the world's largest communications company. QCI employs about 340 people of which more than 200 are engineers. Ever since the company was founded thirty years ago, engineers have held every major position within the company, including president and vice president. The vice president for accounting and finance, for example, has an electrical engineering degree from Purdue and a master's degree in business administration from Harvard. QCI, up until 1986, was a traditional organization where everything flowed up and down. In 1986, QCI hired a major consulting company to come in and train all their personnel in project management. Because of the reluctance of the line managers to accept formalized project management, QCI adopted an informal, fragmented project management structure where the project managers had lots of responsibility but very little authority. The line managers were still running the show. In 1989, QCI had grown to a point where most of their business base revolved around twelve large customers and thirty to forty small customers. The time had come to create a separate line organization for project managers, where everyone could be shown a career path i company and company could benefit by creating a body of planners and managers dedicated to the completion of a project. The project management group was headed up by a vice president and included the following full-time personnel: - Four individuals to handle the twelve large customers - Five individuals for the thirty to forty small customers - Three individuals for R&D projects - One individual for capital equipment projects The nine customer project managers were expected to handle two to three projects at one time if necessary. Because the customer requests usually did not come in at the same time, it was anticipated that each project manager would handle only one project at a time. The R&D and capital equipment project managers were expected to handle several projects at once. In addition to the above personnel, the company also maintained a staff of four product managers who controlled the profitable off-the-shelf product lines. The product managers reported to the vice president of marketing and sales.
R&D PROJECT MANAGEMENT Project manager: "My biggest problem is working with these diverse groups that aren't sure what they want. My job is to develop new products that can be introduced into the marketplace. I have to work with engineering, marketing, product management, manufacturing, quality assurance, finance, and accounting. Everyone wants a detailed schedule and product cost breakdown. How can I do that when we aren't even sure what the end-item will look like or what materials are needed? Last month I prepared a detailed schedule for the development of a new product, assuming that everything would go according to the plan. I worked with the R&D engineering group to establish what we considered to be a realistic milestone. Marketing pushed the milestone to the left because they wanted the product to be introduced into the marketplace earlier. Manufacturing then pushed the milestone to the right, claiming that they would need more time to verify the engineering specifications. Finance and accounting then pushed the milestone to the left asserting that management wanted a quicker return on investment. Now, how can I make all of the groups happy?" Vice president: "Whom do you have the biggest problems with?" Project manager: "That's easy-marketing! Every week marketing gets a copy of the project status report and decides whether to cancel the project. Several times marketing has canceled projects without even discussing it with me, and I'm supposed to be the project leader." Vice president: "Marketing is in the best position to cancel the project because they have the inside information on the profitability, risk, return on investment, and competitive environment." Project manager: "The situation that we're in now makes it impossible for the project manager to be dedicated to a project where he does not have all of the information at hand. Perhaps we should either have the R&D project managers report to someone in marketing or have the marketing group provide additional information to the project managers." SMALL CUSTOMER PROJECT MANAGEMENT Project manager: "I find it virtually impossible to be dedicated to and effectively manage three projects that have priorities that are not reasonably close. My low-priority customer always suffers. And even if I try to give all of my customers equal status, I do not know how to organize myself and have effective time management on several projects." Project manager: "Why is it that the big projects carry all of the weight and the smaller ones suffer?" Project manager: "Several of my projects are so small that they stay in one functional department. When that happens, the line manager feels that he is the true project manager operating in a vertical environment. On one of my projects I found that a line manager had promised the customer that additional tests would be run. This additional testing was not priced out
Transcribed Image Text:R&D PROJECT MANAGEMENT Project manager: "My biggest problem is working with these diverse groups that aren't sure what they want. My job is to develop new products that can be introduced into the marketplace. I have to work with engineering, marketing, product management, manufacturing, quality assurance, finance, and accounting. Everyone wants a detailed schedule and product cost breakdown. How can I do that when we aren't even sure what the end-item will look like or what materials are needed? Last month I prepared a detailed schedule for the development of a new product, assuming that everything would go according to the plan. I worked with the R&D engineering group to establish what we considered to be a realistic milestone. Marketing pushed the milestone to the left because they wanted the product to be introduced into the marketplace earlier. Manufacturing then pushed the milestone to the right, claiming that they would need more time to verify the engineering specifications. Finance and accounting then pushed the milestone to the left asserting that management wanted a quicker return on investment. Now, how can I make all of the groups happy?" Vice president: "Whom do you have the biggest problems with?" Project manager: "That's easy-marketing! Every week marketing gets a copy of the project status report and decides whether to cancel the project. Several times marketing has canceled projects without even discussing it with me, and I'm supposed to be the project leader." Vice president: "Marketing is in the best position to cancel the project because they have the inside information on the profitability, risk, return on investment, and competitive environment." Project manager: "The situation that we're in now makes it impossible for the project manager to be dedicated to a project where he does not have all of the information at hand. Perhaps we should either have the R&D project managers report to someone in marketing or have the marketing group provide additional information to the project managers." SMALL CUSTOMER PROJECT MANAGEMENT Project manager: "I find it virtually impossible to be dedicated to and effectively manage three projects that have priorities that are not reasonably close. My low-priority customer always suffers. And even if I try to give all of my customers equal status, I do not know how to organize myself and have effective time management on several projects." Project manager: "Why is it that the big projects carry all of the weight and the smaller ones suffer?" Project manager: "Several of my projects are so small that they stay in one functional department. When that happens, the line manager feels that he is the true project manager operating in a vertical environment. On one of my projects I found that a line manager had promised the customer that additional tests would be run. This additional testing was not priced out
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