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The main resource of any firm is its workforce. Management itself could be defined as achieving an organisation's objectives through people. Having an efficient group of people will result in better decision making and resource handling. Systems theory emphasises the role of interactions in groups rather than individual performance. This section will concentrate on the complex structural relations in the project context and the links with the firm, the clients and other stakeholders. Figure II.4, exemplifies a typical concession agreement, which gives an idea of the complexities involved in coordinating different factions, each one of them with their own purpose.
Figure 4 Structure of a typical concession agreement
The way in which personnel participate in defining and implementing the ends and the means to achieve objectives, varies according to the organisation and management style used. In mechanistic structures, decisions are taken top-down, the objectives of the parts are irrelevant as long as the part contributes to the whole. The means are defined by higher levels in most instances. As one goes further down the structure there are less alternatives to work with, forcing little if any creativity.
In organically conceived organisations there is more concern with particular interests of the parts, such as health and safety. There is an increase in alternatives, but parts would be constrained to choose either the ends or the means, not both. This type of organisation adapts better to the environment through passive adaptation to external change.
An organisation conceived as a social system allows freedom in choice of both means and ends. This is the principle of collaborative management. By engaging in this task, there is a proactive attitude, not only a response to environmental changes. This permits the expansion of alternatives and thus the potential to generate a variety of products or services. As a result, there will be a better response to turbulent markets and uncertainty.
The participation of internal and external stakeholders depends on the nature of the project and the specific job done by the part being managed. At project level, the top management team would be formed with the principal members of the client and the project director. Figure II.5 depicts such an arrangement that starts with board 1 at the top. It is advisable to include as members of the board, other external and internal stakeholders, complemented by consultants for specific reunions. Thompson (1995: 7) suggested a similar arrangement, with the direct involvement of the project manager in a board formed by the client organisation's representatives or 'project board'. He also emphasised the need to channel client decisions through this top level board, instead of direct links between departments and project management team. This would lead to confusions and unnecessary claims.
Figure 5 Board formation in a circular organisation design, Ackoff (1994:119)
A project board at this level would be formed by representatives of the promoter, the main shareholders, the client, the operator, the constructor and the users. Some of these 'stakeholders' may not be permanent members of the board, but their input would be very important to achieve full representation which in turn, will lead to flexibility in the product or service.
The Project Management Team would belong to the next level of boards (e.g board 1.1 in figure II.5). Each team is in charge of specific projects. Each board with the exemption of the in the top, is formed by representatives of the immediate levels in the structure. This type of structure called circular organisation, conforms with all previously existing structures (eg. matrix, multidimensional), and allows the traditional division of work by specialists (e.g. design, R&D) or sub-contractual division, normally concerned with certain trades (e.g. construction, electrical engineering).
The teams in the different boards are responsible for the successful implementation of the project. If any group does not perform, then the project is very likely to fail. The team leaders have to make sure that the appropriate teams are assembled and interact efficiently. The leader should be understood to be the person in charge of promoting development of his or her personnel, acting as a facilitator of this process. An autocratic use of power is not applicable in this kind of management, where teamwork gets best results from individuals and work groups.
According to Handy (1993), the main intervening factors in the performance of teams are: leadership style; process and procedure; and motivation. Accountability has to be stressed very clearly from the beginning and should be allowed to grow based on a common set of objectives, trust and commitment. Gibson (1985:269) suggests four key areas linked to the development of the team, which must be observed:
To increase productivity it is of utmost importance to establish a better line of communication between employees and management, between working groups and individuals. Interactions and/or interpersonal relations become more important than competence. Cultural differences, social affiliation, power, and influence are important components of group performance. Group structure and functioning, defines in part how the group and the individual affect one another, including leadership styles, effectiveness and conflict resolution through cooperation. John D. Rockefeller, a successful American industrialist said, "The ability to deal with people is as purchasable a commodity as sugar or coffee. And I pay more for that ability than for any other under the sun."
The failures of the mechanistic concepts based on stimulus - response in social systems, forces managers to focus on interactions in human behaviour and levels of motivation. By grasping this concept it will be possible to achieve better results although it is an area which needs more research by a whole range of specialists from sociologists to psychologists.
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