FPM Noor van Loon PEW 2
Financial project management
lecture 1 (1.1)
Projectification= the spread of the form
1. What is a project?
A long term plan. There are deadlines. Specific tasks that work to a goal. A project
has a scope, this is a description of what you do and don’t in the project. If you
extend the scope you don’t have enough resources. If the projects, go well it is to the
benefit of an organization.
2. What is/are differences between project and organization?
Project is about immediate change whereas an organization is there in principle for
permanency, it will be there tomorrow but also in 10 years, so it has an unlimited
time horizon. A project has a limited time horizon, but it can be very long.
3. What is project management?
• Project= organizational form: distinctions among forms reflect social processes and
boundary creation (an organization is an entity compromising multiple people and
resources, that has a particular purpose/goal/aim).
• In any organizational form, mainly two aspects of work exist: on-going operations
and projects.
• Projects are defined as unique, temporary endeavors with a specific begin and end
(thus they are time bound)
• Operations constitute an organization’s on-going, repetitive activities, such as
accounting or production
• Permanent versus temporary → being a member of a project is also a project
• Routine versus unique
Operations Projects
Taking class notes Writing term paper
Daily entering sales receipt into the Setting up a sales kiosk for a professional
accounting ledger accounting meeting
Practicing scales on the piano Writing a new piano piece
Manufacturing apple ipods Designing an ipod that is 2x4 inches and can
carry 10.000 songs
Project management
• Project Management is the process and activity of planning, organizing, motivating,
and controlling resources, procedures and protocols to achieve specific goals.
• The primary challenge of project management is to achieve all of the project goals
and objectives while honoring the preconceived constraints. The primary constraints
are scope, time, quality and budget.
Project management & social sciences
Project management was developed in the engineering science. So, there is a technical and
social science approach. The technical approach is mixed with the social science approach. It
, FPM Noor van Loon PEW 2
is about teamwork, socialization. If you want to put all the forms under one umbrella you
talk about temporary systems because organizations use them for a specific purpose.
1. One of those reasons is that organizing in projects is a reaction to what happens in
the environment, so you need to innovate because all the other organization are
innovating as well. There is more emphasis on competition and innovation. The use
of projects is an answer to the pressure of globalization.
2. A benefit is that resources (people) are only occupied temporarily.
• A temporary system or organization in business, science, and society is typically
defined as a collaborative enterprise that is carefully planned to achieve a particular
aim. They can be further defined as temporary rather than permanent social systems
that are constituted by teams (people/organization) within or across organizations to
accomplish particular tasks under time constraints
• Intra organizational: project & project-based organization → projects happening
inside the organization with people or departments working together
• Inter-organizational: IO Temporary Organizations → occur when two or more
organizations join together and share information or collaborate. To compete against
others or easily enter new markets
Individual based Organizational based
Degree of preparedness of Limited Ad hoc or spontaneous TS: Hastily formed organizational
actors in TS voluntary actions by TS: initiated by non-temporary
individuals and informal organization (fight terrorist
groups (disaster where people attacks; think about disasters,
help other people) there is a general plan but
when there is a disaster this is
always very unique so there is
no specific plan)
extensive Profession-based TS: formed Structurally prepared TS: ex
by contracting individual ante plan. Task and resources
experts (film industry, theatre) (project, military,
deployments, PBO; if we send
the Dutch army to Afghanistan
than these people are well
trained and prepared)
Pbo= project based organization
- What is it?
An independent organizational form (an organization) in which the project (and not a
functional department) Is the primary organizational unit for economic or societal
activities (e.g. profusion, innovation, change, and competition)
- Where can we find them?:
In private manufacturing enterprises, as in other organizations public and private
(legal profession, consultancy, marketing, film industry, advertising, aid).
,FPM Noor van Loon PEW 2
PBO: Typical characteristics
Imagine; You have to build a very special ship or make a movie. Every movie or special ship is
different, so you have to act closely with your customer. A project-based way is a very good
way of organizing.
- Appropriate for complex, non-routine tasks
- Competences and capabilities build from project to project
- Help to adapt to uncertain, risky and changing environments
- Populated by integrators (commercial & technical) and brokers (to external clients)
- Project managers have high status and control over functions, personnel, and
resources
- PBO is flexible and reconfigurable (cf. large hierarchies)
- PBO = series of projects
- Often: close user-producer interaction
PBO: advantages
• Major advances of PBO
o Well-suited for innovation & learning, coping with emerging properties &
demands from clients;
o Flexibility high and response time to changing circumstances relatively low
o High employee loyalty to project goals due to short lines with project
management
PBO: disadvantages
• Major disadvantages
o Ill-suited for coordination of resources and capabilities across projects,
routine production activities, achieving economies of scale
o Organizational learning often suffers because if you go to practice you do a
project, you finish it and go to the next project.
o Danger of resources duplication across multiple projects;
o Due to across project mobility, careers and development of employees might
suffer. People jump from one project to the other and develop certain skills,
but these are all project related so it is hard to grow in your career.
On the one hand it is very suited for innovation but on the other it is very bad for learning.
What is a project?
• A project is a planned temporary endeavor undertaken to create a unique product or
service or other complete and definite outcome (deliverable) within a limited time
scale and budget.
• Can be intra- (in) or inter- (between) organizational
Project as temporary systems can be described by the 4 T’s:
1. Time→ projects have a beginning and a determined end. This has implications for
how we behave in certain projects
Which types of time do you know and how do they impact on your life?
, FPM Noor van Loon PEW 2
The experience of time is different so there is something like the subjective
experience of time. There is a difference between vacation time and work time. Clock
time is objective time.
o Objective: linear, natural, continuous
o Subjective: cyclical, socially constructed, local
o Temporal embeddedness (time-oriented markers used to demarcate and
organize activities):
▪ Chronological pacing → a deadline. the event of an exam influences
your behavior; your activity peak is before the exam.
▪ Event-based pacing → Event pacing is about creating a new product
when a promising technology comes out of the R&D laboratory,
entering a new market in response to a move by a competitor, or
making an acquisition because an attractive target becomes available.
▪ Entrainment-based pacing → when there is great urgency or
extremely short duration of a project this leads to extra coordination
as actors match their energy and contributions to external markers
o Shadow of the future= your knowledge about interaction with a certain
person in the future influences your behavior. If you know that you will meet
a person again and have to negotiate for example than you act nicer
o Shadow of the past= you know how someone works so you don’t have to
invest in getting to know him or her. If you will not meet in the future, you act
more opportunistically.
2. Task
3. Team= about the relationship of the team relative to the organization. If you do a
project you go through a cycle. Detachment is important because if you are bounded
to the organization you cannot focus.
o Legitimacy building= building trust for offshoring tasks
o Commitment building
4. Transition= focus on accomplishment & progression
Action orientation, two meanings of transition:
– Transforming input into output, change (goal);
– How to transform (process): team mental models (how do we think we can do the
job?)
Inter-organizational TO (IOTO)
