First Security Bank of Cleveland The growth rate of First Security of Cleveland had caused several executives to do some serious thinking about whether the present organizational structure was adequate for future operations. The big question was whether the banking community could adapt to a project management structure. Tom Hood had been the president of first Security for the past ten years. He had been a pioneer in bringing computer technology into the banking industry. Unfortunately, the size and complexity of the new computer project created severe integration problems, problems with which the present traditional organization was unable to cope. What was needed was a project manager who could drive the project to success and handle the integration of work across functional lines. Tom Hood met with Ray Dallas, one of the bank's vice presidents, to discuss possible organizational restructuring: Tom Hood: I've looked at the size and complexity of some 20 projects that First Security did last year. Over 50 percent of these projects required interaction between four or more departments. Ray Dallas: What's wrong with that? We're growing and our problems are likewise becoming more complex. Hood: It's the other 50 percent that worry me. We can change our organizational structure to adapt to complex problem-solving and integration. But what happens when we have a project that stays in one functional department? Who's going to drive it home? I don't see how we can tell a functional manager that he or she is a support group in one organizational form and a project manager in the other and have both organizational forms going on at the same time. We can have either large, complex projects or small ones. The small ones will be the problem. They can exist in one department or be special projects assigned to one person or a task force team. This means that if we incorporate project management, we'll have to live with a variety of structures. This can become a bad situation. I'm not sure that our people will be able to adapt to this changing environment. Dallas: I don't think it will be as bad as you make it. As Jong as we clearly define each person's authority and responsibility, we'll be all right. Other industries have done this successfully. Why can't we? Hood: There are several questions that need answering. Should each project head be called a project manager, even if the project requires only one person? I can see our people suddenly becoming title-oriented. Should all project managers report to the same boss, even if one manager has 30 people working on the project and the other manager has none? This could lead to power struggles. I want to avoid that because it can easily disrupt our organization. Dallas: The problem you mentioned earlier concerns me. If we have a project that belongs in one functional department, the ideal solution is to let the department manager wear two hats, the second one being project manager. Disregarding for the moment the problem that this manager will have in determining priorities, to whom should he or she report to as to the status of the work? Obviously, not to the director of project management. Hood: I think the solution must be that all project managers report to one person. Therefore, even if the project stays in one functional department, we'll still have to assign a project manager. Under project management organizational forms, functional managers become synonymous with resource managers. It is very dangerous to permit a resource manager to act also as a project manager. The resource manager might consider the project as being so important that he or she will commit all the department's best people to it and make it into a success at the expense of all the department's other work. That would be like winning a battle but losing the war. Dallas: You realize that we'll need to revamp our wage and salary administration program if we go to project management. Evaluating project managers might prove difficult. Regardless of what policies we establish, there are still going to be project managers who try to build empires, thinking that their progress is dependent upon the number of people they control. Project management will definitely give some people the opportunity to build an empire. We'll have to watch that closely. Hood: Ray, I'm a little worried that we might not be able to get good project managers. We can't compete with the salaries the project managers get in other industries such as engineering, construction, or computers. Project management cannot be successful unless we have good managers at the controls. What's your feeling on this? Dallas: We'll have to promote from within. That's the only viable solution. If we try to make project management salaries overly attractive, we'll end up throwing the organization into chaos. We must maintain an adequate salary structure so that people feel that they have the same opportunities in both project management and the functional organization. Of course, we' II still have some people who will be more title-oriented than money-oriented, but at least each person will have the same opportunity for salary advancement. Hood: See if you can get some information from our personnel people on how we could modify our salary structure and what salary levels we can pay our project managers. Also, check with other banks and see what they're paying their project managers. I don't want to go into this blind and then find out that we're setting the trend for project management salaries. Everyone would hate us. I'd rather be a follower than a leader in this regard.

Question:

Analyse the case and create a SWOT analysis