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Project management: the start of the project journey
Project management: the start of the project journey

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1.2 Organisations and ‘players in the game’

Projects take place within organisations whose structures, philosophies and cultures affect how work is planned and carried out. A detailed study of organisational behaviour is beyond the scope of this course, but you need to be aware that projects take place within a social environment consisting of people who are affected by, and have an influence on, the outcome of projects (see, for example, Boddy, 2002).

Organisational structures

Business and other organisations in the west or based on western models are normally structured as hierarchies using vertical lines of reporting. A person, usually called the managing director or chief executive officer, occupies the pinnacle of this hierarchy, takes advice from a board of directors on the strategic goals or objectives of the business and seeks the agreement of the board for strategic, controversial or difficult decisions. Below the managing director, the organisation may be divided into functional areas: marketing, product design and engineering, manufacturing, sales, finance and human resources (also known as personnel). Some large organisations may divide themselves at this level by general groups of products. A large firm engaged in oil exploration might be divided along the lines of exploration, instrumentation, information systems and so on.

Small groups of people can operate with very little formal structure to get their work done. Indeed, members of project teams are expected to be able to take up more than one role; the project manager may also be the chief engineer, for example. As part of their day-to-day job (non-project work), it is commonplace to establish functional areas which often reflect specialist groups:

  • marketing
  • product design and engineering
  • manufacturing
  • sales
  • purchasing
  • information systems
  • finance
  • human resources

Many large organisations, such as those that manufacture electrical goods, may also divide into groups to reflect the different classes of product. For example, the division responsible for washing machines and the one responsible for televisions will have their own, separate functional areas. A project to develop a new product may, for example, involve the marketing, information systems, product design and engineering and manufacturing areas of a company. The loyalties of people working in hierarchical organisations tend to follow lines of vertical reporting and conflicts might arise as a result of horizontal links within the project, as the different areas may have different objectives and cultures. Forming a team to work on a project is seen as beneficial. Such a grouping brings diverse knowledge, assumptions, ideas and skills to bear upon the project’s goal. But the tension across the various linkages within the team can have a detrimental effect on the outcome of a project unless care is taken to ensure otherwise.

‘Players in the game’

All the various ‘players’ in the project ‘game’, who may only be involved peripherally, are important. It is important to be aware of who they are and what role they play in the project environment, especially their different attitudes towards the project. A stakeholder is any person or group of people who has an interest in a project, is affected by it or who can influence its outcome. Stakeholders include:

  • all the people whose work is changed in any way by the project
  • those who are affected by it
  • those who grant resources to the project
  • those who can obstruct, block or stall the work in any way.

It should be noted that stakeholders’ influence on an outcome may vary at different points in the life of a project. Learning who these people are and understanding their motives is an important aspect of organisational behaviour (McShane and Von Glinow, 2004). Identifying these people during project conception provides the foundation for achieving a successful outcome. Some of the key stakeholders who are most likely to be identified as a project is initiated are described in Table 1.

Table 1 Key stakeholders
Sponsor The sponsor is the person or body of individuals for whom the project is undertaken. The sponsor is also seen as the primary risk taker owing to the responsibility to ensure that the project is successful in the eyes of the stakeholders. The sponsoring organisation provides the resources (such as money and people).
Champion A champion is someone who acts as an advocate for a proposal or project; someone who has the ear of the people in power and who promotes the cause of the proposal or project. It’s not always the person who has the bright idea about some new product or service; it tends to be someone who has some genuine influence in the organisation when it comes to bringing about change. So, the champion will provide support in times of difficulty (see Boddy and Buchanan 1992, p. 26), but it is a different role from that of the sponsor (Morris, 1994).
Client The client is a person (or organisation) in the position of requesting or commissioning the services of some other organisation or person – some form of payment is involved. There may be a formal contract so that a sense of ownership takes on a legal meaning. Within the same organisation, there are informal contracts between departments or functional groups (forming client–supplier relationships).
Customer The common understanding of a customer is the one who buys, which is a similar term to client. For example, an organisation’s marketing department might be the client who instigates the development of a new product for which we (the public) are its customers.
Owner The term can be taken to mean something similar to client or customer, though in a legal sense it is much more narrowly defined, Boddy and Buchanan (1992) use the term owner more in the sense of one with an attitude of strong attachment to the aims of a project.
Blockers or objectorsPeople or bodies that will resist the project.

In practice, client and customer are terms that give rise to some confusion. They can be used synonymously or be kept apart depending upon the context. The distinction, for example, is commonly made in the following contexts:

  • a lawyer has clients for his services
  • shops have customers for the products on the shelves.

This is a particular problem for English speakers, although less so for Dutch or French speakers as they have only one word: ‘klant’ or ‘client’, respectively. We should note that the resolution of confusing terms and ambiguities is an important factor in project definition. It’s a consequence of the relationship between language and the context in which it is used. The confusion can be compounded in organisations where, for example, you are considered a client up to the point at which some money changes hands and referred to as a customer thereafter.

Subsequently, other equally important types of stakeholder will emerge. In the field of software development, for example, there are two vital ‘players in the game’.

Table 2 Additional stakeholders in a software development project
End users The people who will ultimately operate (or make use of) the product. If the product does not help the users do their work, it will not be successful.
Developer A person who is part of the team that builds the product.

A surprisingly large number of people can be involved in one way or another with projects. They are all important to some degree, which is why they are stakeholders. It may not be possible to meet every stakeholder during a project’s lifetime, but it is important to be aware of their existence and potential influence. The statutory and regulatory bodies are to be found on most lists of project stakeholders, since they can affect both the product and the manner of its development. In the pharmaceutical industry, for example, the development of new drugs is constrained by regulatory requirements related to the licences needed to sell the new product. In the construction industry, a particular project can be affected by changes in the health and safety regulations during its lifetime.

Some people can take on a variety of stakeholder roles and change between them as the project unfolds. The politics of organisations are such that you will find people swapping roles not only because of their team membership but also because of their wish to affect the outcome – either favourably or adversely.

Example 1

At a distance learning institution, such as The Open University, the geographical dispersion of both students and their tutors has to be addressed in order for the tutors to be able to assess their students’ progress on a given course of study. The UK postal service became the key component of the solution that enabled The Open University to deal with large numbers of assignments. At regular intervals during the presentation of a course, students are required to submit their assignments to their tutor through the postal service. After marking a set of assignments, each tutor sends them to The Open University’s Milton Keynes campus, where the marks for each student assignment are recorded before the assignments are returned to the students – again by post. There is a dedicated Assignment Handling Office as well as a separate Student Records Office on the University campus.

The early prototype for a computer-based service for submitting, marking and handling assignments originated from a group of academics in the Faculty of Mathematics and Computing. The eventual development of the electronic tutor-marked assignment (eTMA) system, which is in use at the time of writing this course, was performed by members of The Open University’s Management Services Division.

From the information in Example 1, some of the stakeholders in the project for the electronic assignment system can be readily identified, but others are less easily found. For example, you might think that someone in a position of authority inside the Management Services Division would be the project sponsor. However, in organisations where people are grouped according to certain special skills like ‘software developer’ and ‘computing academic’, the role of sponsor may be hard to identify. In fact, the sponsor was the Head of the Assignment Handling Office, although the term sponsor was not used. While there was a group of academics who developed a specific method of electronic assignment handling, they would not have been seen as project champions unless they were able to exert some influence on the decision to go ahead with the project. The Assignment Handling Office seems to be the client for the new system.

One of the reasons for introducing the eTMA system was to provide students with a more efficient service, although it was seen originally as giving students a choice of submission systems. Had the intention been to completely replace the postal system with the new electronic system, there might have been some hostile stakeholders inside the Assignment Handling Office anxious about their future role at the University.