Challenges

Human error has been documented as a primary contributor to more than 70 percent of commercial airplane hull-loss accidents. While typically associated with flight operations, human error has also recently become a major concern in maintenance practices and air traffic management [1].

Human factors

The term “human factors” is often considered synonymous with crew resource management (CRM) or maintenance resource management (MRM).  Human factors involves gathering information about human abilities, limitations, and other characteristics and applying it to tools, machines, systems, tasks, jobs, and environments to produce safe, comfortable, and effective human use [1].

Human factor specialists study each factor which can influence on the human activity on the cockpit. The job of an aviation psychologist is to reduce human error during flight. The main and most general objective of their work is optimisation of the human-computer interaction. From the one side electronic equipment should provide the full control of the flight and make easier pilot job. But just one error of board computer may be the cause of the disaster.

Therefore crew should be aware and control all situation along with computer program to be able correct its mistake.  Because of high level of system automation often pilots even do not know what it is doing and why. Despite rapid gains in technology, humans are ultimately responsible for ensuring the success and safety of the aviation industry. They must continue to be knowledgeable, flexible, dedicated, and efficient while exercising good judgment [2].

Events of aviation human factors

Since the world’s first airplane was invented in 1903 by Wilbur and Orville Wright people studied human factors in aviation and tried to make easier pilot work by all known methods. The first navigation aid was introduced in the USA in the late 1920s.

It was airfield lighting to assist pilots to make landings in poor weather or after dark. The concept of approach lightning was developed from this in the 1930s, indicating to the pilot the angle of descent to the airfield, which later became adopted internationally through the standards of the International Civil Aviation Organization (ICAO).

With the spread of radio technology, several experimental radio based navigation aids were developed from the late 20s onwards. These were most successfully used in conjunction with instruments in the cockpit in the form of Instrument Landing Systems (ILS), first used by a scheduled flight to make a landing in a snowstorm at Pittsburgh in 1938.

A form of ILS was adopted by the ICAO for international use in 1949. Following the development of radar in World War II, it was deployed as a landing aid for civil aviation in the form of Ground Control Approach (GCA) systems, joined in 1948 by Distance Measuring Equipment (DME), and in the 1950s by airport surveillance radar as an aid to air traffic control [3].

After numerous air incidents and accidents were also solved (or minimized a danger of) a lot of technical problems like positive lightning, engine failure, metal fatigue, delamination, stalling, fire, bird strike, volcanic ash, etc.

Much progress in applying human factors to improving aviation safety was made around the time of World War II by people such as Paul Fitts and Alphonse Chapanis. However, there has been progress in safety throughout the history of aviation, such as the development of the pilot’s checklist in 1937. The ability of the flight crew to continually maintain situation awareness is a critical human factor in air safety [3].

During WWII, psychologist Norman Mackworth studied performance of radar operations as he watched for German aircrafts to cross the English Channel. He noted the difficulty of attending to the radar operations for more than a few minutes.

After WWII, Paul Fitts studied selective attention and how pilot’s eyes scanned an aircraft’s instrumental pattern. He questioned how the brain knows what is important in the environment and how much information can the eye take before moving to another fixation point [4].

Decades after WWII, the focus of research was on aircraft flight design, layout of instrument displays, and basic tasks of flying. Flight simulators were invented for pilot training and would allow for teaching of skills in a safe environment on ground which would transfer into performance in the real task. In the 1950’s jet aircrafts were invented with faster speed and less stability.

In the 1970’s, the focus was on the mental workload and limits of human attention in performing several tasks at once. Finally, in the 1980’s a focus on on-board computer power changed the pilot’s task from an active pilot to more of a monitoring role [4].

To reduce the commercial aviation accident rate modern aircraft companies establish human factors departments. Human factors specialists work closely with engineers, safety experts, test and training pilots, mechanics, and cabin crews to properly integrate human factors into the design of airplanes. Their areas of responsibility include addressing human factors in

Flight deck design.
Design for maintainability and in-service support.
Error management.
Passenger cabin design.

Flight deck design should satisfy such validated requirements as customer input, appropriate degree of automation, crew interaction capability, communication, navigation and surveillance traffic management. For instance Boeing commercial airplanes propose flight decks which are designed to provide automation to assist, but not replace, the flight crew member responsible for safe operation of the airplane.

These systems support instrument displays with visual and tactile motion cues to minimize potential confusion about what functions are automated. Flight crew communication relies on the use of audio, visual, and tactile methods. This includes crewmember-to-airplane, crewmember-to-crewmember, and airplane-to-crewmember communication.

Design for maintainability and in-service support includes chief mechanic participation, computer-based maintainability design tools, and fault information team and customer support processes [1].

Boeing has developed human factors tools to help understand why the errors occur and develop suggestions for systematic improvements. The tools are: Procedural Event Analysis Tool (PEAT) and Maintenance Error Decision Aid (MEDA). PEAT is an analytic tool created to help the airline industry effectively manage the risks associated with flight crew procedural deviations.

MEDA began as an effort to collect more information about maintenance errors. Three other tools that assist in managing error are: Crew information requirements analysis (CIRA), Training aids, and improved use of automation. CIRA provides a way to analyze how crews acquire, interpret, and integrate data into information upon which to base their actions.

The passenger cabin represents a significant human factors challenge related to both passengers and cabin crews. Human factors principles usually associated with the flight deck are now being applied to examine human performance functions and ensure that cabin crews and passengers are able to do what they need or want to do. Some recent examples illustrate how the passenger cabin can benefit from human factors expertise applied during design.

These include: automatic over wing exit and other cabin applications. The improved version of the over wing emergency exit opens automatically when activated by a passenger or cabin or flight crew member [1].

Conclusion

The list of events in the history of aviation can be endless as the list of events of aviation human factors. However the number of aircraft accidents had not been reduced to zero. Along with legacy achievements should be provide more efficient and modern ones. Therefore aviation industry is an extensive field for specialists of various directions.

Bibliography

Curt Graeber, Human factor engineering, Boeing commercial airplanes, July, 2005

Robert R. Tyler, An interesting career in psychology: aviation human factors practitioner, October, 2000

Wikipedia (free encyclopedia), 6 July 2005. History of human factors, Human performance training institute, July, 2005

What Are Three 21st Century Challenges in Strategic Management? Answer Many challenges face a manager in the 21st century. A looming challenge in strategic management right now is globalization. Another is a volatile world economy. A third challenge in 21st century strategic management is the ever changing environment of government regulations, both domestically and internationally. Globalization Globalization is the international integration of intercultural ideas, perspectives, products/services, culture, and technology.

Ethics and Governance

Ethics is at the core of corporate governance, and management must reflect accountability for their actions on global community scale. Diversity Globalization demands a diverse work force, and assimilating varying cultures, genders, ages, and dispositions is of high value. Career Success and Personal Fulfillment Career success and fulfillment hinges on effective human resource management, the practice of empowering employees with the necessary tools and skills. Technology Technology management is crucial in offsetting the risks of new technology while acquiring the operational benefits the technology provides.

Competition Managers must understand a company’s competitive advantage, and translate this into a strategy that incorporates the competitive landscape. A Framework for Considering Challenges: PESTEL The PESTEL framework highlights six critical factors for management to consider when approaching the general business environment. A Look at the Managers of Tomorrow Posted on August 25, 2009by greatworkplace Randstad recently published an excellent report on the Managers of Tomorrow, including some fascinating statistics and observations on what our managerial landscape might look like in the future.

In his book, “The Future of Management,” Gary Hamel argues that the secret to long-term business success is “not operational excellence, technology breakthroughs, or new business models, but management innovation–new ways of mobilizing talent, allocating resources, and formulating strategies. ” We’ll take a look at some predictions for the future and how we might be able to influence them. Who wants to be a supervisor? According to Randstad’s report, current employees have mixed feelings about the quality of managers currently, but their outlook of future supervisors looks somewhat bleak.

The report goes on to suggest that “It’s clear that finding and preparing the next generation of managers is rapidly becoming one of the most critical business needs in the modern workplace. ” The problem: future generations of employees aren’t embracing the role of a manager. “Employees watch their managers and see long hours, loads of new responsibilities and not much more money. Increased stress is the number one reason employees don’t want to become managers. ” What attracts employees to a manager role?

We’ve established that future generations might not currently embrace the role of a manager, but Ranstad’s report does provide some insight on what employees do find attractive about being a manager. So what makes management more attractive? “Maybe it begins with rethinking management. When we asked employees to list the reasons why they would want to be a manager, the answers were surprising. Power, status and money didn’t even make the list. The number one reason was being able to share my knowledge with others. Number two was being responsible for the success of an organization. And, number three was being able to influence decisions.”

Some Goals for the Future In February, the Harvard Business Journal published an article featuring 25 Stretch Goals for Management in the 21st Century. Here are a couple interesting points from the article: Redefine the work of leadership. The notion of the leader as a heroic decision maker is untenable. Leaders must be recast as social-systems architects who enable innovation and collaboration. Create internal markets for ideas, talent, and resources. Markets are better than hierarchies at allocating resources, and companies’ resource allocation processes need to reflect this fact.

Depoliticize decision-making. Decision processes must be free of positional biases and should exploit the collective wisdom of the entire organization. Retrain managerial minds. Managers’ traditional deductive and analytical skills must be complemented by conceptual and systems-thinking skills. (Source: “25 Stretch Goals for Management“, Harvard Business Journal) Supervisory Training for Tomorrow’s Supervisor Today’s work environment demands highly skilled frontline supervisors different from the command-and-control leaders of the past.

People are not interested in working for someone who just gives orders daily and conducts evaluations annually. Today’s employees are looking for leaders who develop, support and coach them and keep them engaged. In ERC’s popular Supervisory Series I, beginning September 8, participants learn the managerial and interpersonal skills necessary to handle all leadership interactions—including those that are emotionally charged—along with the ability to apply both of these skill sets in any leadership setting or interaction. Organizational Promotions – The Managers of Tomorrow

SEPTEMBER 1, 2010 BY JORRIAN GELINK 1 COMMENT The people decision process is the control an organization has in whether its vision is being executed as well as achieving high performance. Having mission statements and core values posted across the walls is irrelevant unless the actions towards the people align with the organization’s core vision. Delivering a message emphasizing the importance of attaining new markets falls short when the company promotes an associate that is focused on retaining older clients but moves up due to “long tenure”.

Every decision that is made in regards to people movement up, down or sideways is viewed on carefully not only by those within the department or division; but as well with others that do a “temperature check” of what it takes to stay/move up within the organization. The management of today need to follow two core steps in order to promote the management of tomorrow. Integrity of character. The start of any promotion should be on an individual’s integrity; for without that the organization is compromised. Integrity is not something learned in an organization, it is a trait brought into the organization and is easily judged by others.

Integrity is always worn on a manager and is the fabric that can never come off; whether the integrity is strong or weak, all can see it and will respond to it accordingly. Lack of management integrity will show up in less than one month, but be rest assured the damage will show up the same time that integrity of character is breached. Many examples plague a manager’s strength of integrity: favoritism, fear of dealing with strong subordinates, placing blame on others, fear of performance communication, and promoting others “like me” are some of the main issues that plague poor management today.

The people of the organization will forgive upper management promoting someone new to role, but they will never forgive a promotion of one with a lack of integrity. Organizational Performance. The organization has to promote based on performance: clear results achieved by executing tangible goals of the organization. Behavior leading to results needs to be looked at, any manager promoting one based on performing the right behaviors but not achieving results shows a lack of ignorance to the organization’s goals. Others will look upon this type of poor promotion it as “as long as I do what my manager tells me, who cares if I need to perform”.

Not only will you damage your business, you also shun others from wanting to move up the organizational ladder. Another result of poor promotion planning are the “opinions” of whether one can be handle a new role: what needs to be there is factual evidence of performance. The worst damage that can be done is not only average performance of a candidate, but under-performance, as any objectives and goals leading to results will not be taken seriously by co-workers and upper management will be looked upon as “the promoter of friends”.

Continuous poor promotions with this method result in sub-ordinates leaving the organization due to favoritism or even worse, destroy the organizations objectives by trying to be-friend their superior in place of achieving results. The managers of tomorrow require high integrity of character as well of results of organizational performance. Focusing on these two requirements helps the organization be fair and accountable to what it needs from its teams. Missing even one of these requirements not only threatens the performance of the organization, but also detracts others from looking to be promoted.

This is the true control of the organization: moving the right people into the right places for the right reasons. Jorrian Gelink Management Architect 5 Key Roles for HR Managers of Tomorrow What wlll the HR directors of tomorrow look like and what will their roles be? If we listen to theorists and academics, they might not look like much at all — in fact, they might already be extinct. This isn’t news: mandates for change in the profession have been prolific since the ’90s. Remember Fast Company’s 2005 article “Why We Hate HR“? That certainly got our attention: attacking HR’s intelligence and value.

Still today, noted practitioners like Jacques Fitz-Enz advocate breaking up HR, suggesting that the competencies needed for each area of the HR practice be allocated to other capable departments within a company. I, naturally, wholeheartedly disagree with Fitz-Enz and other HR-killing proponents. Why? There is absolutely nothing in any organization that does not require people. People are an organization’s greatest asset — they are the human capital. So why should there not be a talented team of professionals focused on all things people?

I think there is hope for HR, but it will require a dramatic paradigm shift and a deliberate refocus on what’s important to an organization in order to drive the performance and development of the workforce. If HR is to survive, it must think and act as if the organization was paying for its services — and could pull the plug at any time. Here are five roles that the HR Leader of tomorrow will have to play in order to shift the paradigm and add true value to an organization: Strategic Investor Today’s HR team is overwhelmed, overly busy and stretched beyond capacity.

With multiple customers having exponential number of needs, run from one project to the next, without stopping to understand why we are doing it, what the end result should be and whether or not we met the end results. Think about that. If HR were a business with services and products for an organization, would we not have to think about our business as a strategic investor, providing the right products and services for a cost that the customer will pay? We cannot be everything, and do everything. We need to learn to deliver our work where it adds value, and continuously measure that delivery.

Relationship Facilitator Sticking with the concept of Human Resources as “all things people” for a minute, it goes without saying that a huge element of that role is facilitating relationships throughout (and outside) the organization. I see “building relationships” as being part of this, but not all. Yes, HR needs trusted relationships with executives, peers, the HR team, and the employees. But Human Resources cannot stop there; they must facilitate relationship building up and down levels, across business units, and with the community at large.

Relationships are the biggest derailers of organizational success, and HR is poised to be the trusted facilitator bring people, teams and the organization together to drive business success. Developer of People Human Resources tends to be the “cobbler’s children”, going without shoes while the cobbler provides shoes to everyone else. Developing the skill and talent of the workforce goes without saying on the HR job description (at least in my mind), but we cannot forget our own team. How can we expect to influence and facilitate if our own team is in disarray?

How can we facilitate trust, if our HR team is not trusted? Risk Manager There is no getting around it; there are tremendous risks related to people in an organization, and it is the role of HR to manage those risks. That doesn’t mean providing policies and procedures to ensure no one steps out of line, but building capability in the leadership team and engagement and commitment in the workforce. Technology Geek The Human Resources Director of Tomorrow cannot survive on inference and buzzwords; they must provide credible business intelligence.

Anyone stepping into HR leadership must have broad knowledge of technology systems, data integrity, process improvement and analytics. We must be able to critically analyze our processes to ensure that the business intelligence that we provide to our customers is credible. With the complexity of today’s HR systems, HR has to have to “geek-y curiosity,” asking, “how can we do this better and more efficiently using technology? ” Can We Shift the Paradigm? Not only can we, but we must, not only for our survival, but for the organizations we serve.

The people of the organization make it or break it, and need the talent and skills to make it. That’s where HR can shine. A Word from the Associate Dean: VUCA and the managers of tomorrow Posted on July 4, 2013 by GMBA Community Change is occurring faster than ever before, the world is more and more unpredictable. More players, more issues, and more voices means chaos and complexity and the “realities” of doing business are not so hard and fast as we may have once assumed it to be. Organizations operating under these forces face unique challenges and opportunities in decision-making, problem-solving, and planning.

VUCA, an acronym standing for volatility, uncertainty, complexity, and ambiguity is a term derived from military vocabulary that is increasingly relevant for describing how managers should take into account the external environment. Being aware, being prepared, and anticipating the complications arising from VUCA are essential characteristics of a global manager today. As companies understand (or more likely, fail to understand) this operational chaos, they seek a new kind of leader, a talent that is prepared, aware, and capable of foreseeable strategy and informed action.

These are the kinds of leaders the Global MBA seeks to train, to help provide companies with the talent they need to stay ahead of the trends. The companies that fail to perform today are the ones that are still operating under the talent acquisition, talent management, and workforce planning processes of yesterday. But this chaos is here to stay, so businesses and business leaders not only need to get up to speed but to start finding the relevant talent that can perform and remain agile in this environment.

Agility is a term we stress in our program. In the age of innovation, disruption, and globalization, sticking with the tried and true won’t necessarily cut it. Unique challenges require unique solutions, and the demands placed on business leaders in this setting are diverse, varied, and in constant flux. As new markets emerge, new opportunities and obstacles arise. At a faster pace, the future is upon us before we can anticipate it. And with disruptive innovation the rule rather than the exception, competition is breakneck.

Traditional leadership styles don’t work in this sort of dynamism. The leadership must mirror the environment and focus on VUCA preparedness, anticipation and evolution. And that doesn’t mean that there’s a one size fits all model for management; complex problems require complex solutions and equally complex strategies. Tomorrow’s leaders must be able to thrive in multiple, multi-faceted environments, keeping a finger on the pulse of emerging markets, mature markets, entrepreneurship and innovation, and efficiency and optimization.

Embracing chaos, taking risks, being capable of rapid strategy changes in response to changing markets: all of these characteristics must also be balanced by pragmatism and commitment and underscored by a passion to bring employees along on the adventure. The skills gained through interacting with a diverse cohort, traveling and working internationally, exposure to emerging markets, studying in a mature market, learning from the best professors from around the world are all hardwired into the design of the Global MBA to respond to these needs.

Studying a variety of cases of multiple situations and from diverse industries helps students examine strategy and learn from failure. Extensive teamwork helps them learn to collaborate, share strengths and compensate weaknesses, and adapt collectively in response to the VUCA microcosm of a rigorous, 12-month MBA. How should companies respond to these complex external environment? In kind. Agile leadership means harvesting the best of skills, styles, and experience to meet specific, unique needs.

In July, the Global MBA students will take off around the world for their International Immersion Projects. Each team consists of students of different nationalities, with different linguistic capabilities, with different professional expertise and different academic strengths. They would be working in for a Lifestyle brand in China, agri-business in Bolivia, energy and bottom-of-the-pyramid issues in India, eco-tourism in Morocco, small and medium size sector development in Djibouti and wine industry in S.

Africa. To tackle these diverse projects in challenging external environment requires diversified skill set. The teams will work in environments ranging from -20 degree C to +50 degree C! It also means that the teams are uniquely equipped to respond to the shifts and demands of their different projects in different locations through practiced collaboration and constructive conflict. The successful companies of the future will harness resources like these and use them to become leaders in a VUCA-fueled world.

Introduction

Late adulthood is the term describing the period in an individual’s life beginning at ages sixty or seventy and ending in death. This life period is one of continuing change and adjustment in physical and psychological realms.

Major concepts and distinctive features of various social roles

Socialization

The family is the first social institution for the children. They are taught how to fit into the community and the various social institutions. The children learn the society’s social values and culture. This in the long run helps in creating a cultural identity for the children (Russell, 2004).

Education

Children start their education the moment they are born. This includes both formal and informal. They are taught basic survival skills such as speech, interaction and hygiene. They later proceed to formal schools where they expand their knowledge on a wide variety of areas which later ends up in career specialization.

Discipline

The child is taught respect, and performing of household chores. This helps them to grow into mature and responsible adults. Discipline should be taught with compassion, reason and patience without argument, yelling and pking. The parents should learn to respect the children’s growing independence in order to build self esteem.

Protection

The family offers protection and security to the children. They should be made to feel safe both within the home and without. They should be protected from any form of physical or psychological abuse.

Clothing

Clothing is one of the basic needs that the family provides alongside food and shelter. Children should be provided with adequate and the right clothing depending on the environment.

Nutrition and food security

It is the responsibility of the family to provide nutritional requirements for the children. They should always ensure that the meals are balanced and meet the various needs of the children.

Shelter

The family provides a warm and secure place for the children’s development. It should protect the children from any harsh environmental conditions that may affect their development.

Emotional stability

The family should satisfy the child’s emotional needs thus enhancing their emotional stability. The parents and children should become friends. The parents should create an atmosphere where the children can confide in them.

Health

The family should ensure the children are healthy through proper nutrition and medication.

Contribution and influence of social roles and how they influence individuals and families in the situation

In our case study, the social roles above are not adequately met due to various inadequacies on the part of the grandparents.

The grandchildren’s socialization needs were not fully met. The grandparents generally had little interest in developing the children into a whole person. There was distance between them mainly due to the generation gap.

There grandchildren’s education was also inhibited. This is because the grandparents did not value formal education so much since they did not have any of it themselves. They had limited resources since they are not working. They were therefore unable to give their grandchildren good quality education.

The grandparents were found to be lax in terms of instilling discipline in their grandchildren. They did not have the necessary energy to follow up on their grandchildren’s activities.

The grandparents were frail and sickly and could not offer enough protection to their grandchildren. There were various cases of attacks on their homestead.

Clothing is one of the basic needs that the family provides alongside food and shelter. This was mainly due to financial constraints since the grandparents we

Food and nutrition needs of the grandchildren were not adequately taken care of due to limited resources of the grandchildren. They were also not very keen to ensure a balanced diet.

The grandchildren’s medical needs were not given to their due seriousness since the grandparents had to take care of their own.

The large age difference made it hard for the grandchildren and the grandparents to form a bond necessary in a normal family setting. The grandchildren could therefore not confide in their grandparents and share their emotional needs (Gilbert and Kristin, 2005)

References

Russell, R. (2004). Social Networks Among Elderly Men Caregivers; Journal of Men’s     Studies 13(1): 121

Gilbert, R. & Kristin C. (2005): When Strength Can’t Last a Lifetime: Vocational Challenges of Male Workers in Early and Middle Adulthood. Men and Masculinities, 7(4), April, pp. 424-433.

Spector-Mersel, G. (2006). Never-aging Stories: Western Hegemonic Masculinity Scripts. Journal of Gender Studies, Volume 15, Number 1, March, pp. 67-82.

Introduction

In addition to introduction (section I) and conclusion (section VI), the paper includes four sections.

• Section II addresses the definition and current situation of e-banking.
• Then, section III addresses the impact of e-banking on banking business.
• After that, section IV addresses the major application of e-banking. That is also the bottom line whether e-banking can be viable in a country.
• Section V addresses the new challenges e-banking has brought and policy implications from the perspectives of society, banks, and regulatory authority as well as government.

Definition

• The Internet includes all related web-enabling technologies and open telecommunication networks ranging from direct dial- up, the public World Wide Web, cable, and virtual private networks. (BIS-EBG, 2003)

• Internet banking (e-banking) is defined to include the provision of retail and small value banking products and services through electronic channels as well as large value electronic payments and other wholesale banking services delivered electronically. (BIS-EBG, 2003)

Fundamental characteristics

Comparison between the current round financial innovation (e-banking) and past financial innovations The current innovation (ebanking) Content Delivery channel innovation-deliver banking business via internet. Impact Wider Past financial innovations Products and services, i.e. , delivery, swap Narrow

Levels/Scope of e-banking business

Basic information e-banking/web sites that just disseminate information on banking products and services offered to bank customers and the general public; Simple transactional e-banking /web sites that allow bank customers o submit applications for different services, make queries on their account balances, and submit instructions to the bank, but do no permit any account transfers;  Advanced transactional e-banking/web sites that allow bank customers to electronically transfer funds to/from their accounts pay bills, and conduct other banking transaction online. Usually, e-banking refers to types II and III.

Current development situations (in industrial countries)

E-banking products and services are getting more and more advanced and increasing in variety. From providing information at the early stage to providing transactional activities. Both volume and share in the total banking business are getting bigger and bigger very fast (Graph, Europe) E-banking customer base is getting bigger quickly.

Status in developing countries

Developing countries are in catching up in e-banking: The average e-banking penetration for developing countries by the end of 1999 was close to 5% (World Bank Survey, 2001). In Brazil, the number of e-banking users reached 8 million in 2000.

In Mexico, the number of e-banking users reached 1. 5 million in 2000. In India, over 50 banks are offering online banking services. ICICI Bank’s e-banking is very impressing. E-banking in Korea, Thailand, Malaysia, and Singapore, Hong Kong and Taiwan (China) is thriving. In Ghana and some other African countries, smart cards based on Visa Horizon proximately technologies are getting started.

Prospects

Impact of E-banking on traditional banking. The early conventional wisdom:

• Internet banking would destroy the traditional banking business model and promote the entry of newcomers from the outside of the banking industry.
• Developing countries could have the “opportunities to leapfrog” in the adoption of efinance on a large scale.
• In reality, e-banking develops fast, but not damaging as conventional wisdom projected.

The notion of leapfrog has not worked in many developing countries due to various impediments. This can be verified by UNCTAD report. “Some positive signs are 3 already visible, including a high level of acceptance of technology by customers and financial institutions…. However, most projects have not yet been deployed on a large scale. ” (UNCTAD 2002. It provides a comprehensive look at the status of efinance in developing countries.It covers arrange of areas related to e- finance including e-banking, e-payments, e-trades, and e-credit information).

Even in industrial countries, e-banking is still a complementary tools to traditional banking. Lots of pure e-banking businesses have been forced out of market. Internet-only banks have been substantially less profitable. They generate lower business volumes and any savings generated by lower physical overheads appear to be offset by other types of non-interest expenditures, notably marketing to attract new customers. (De Young 2001).

Prevailing vision .The prevailing view today is that Internet banking can only succeed if it is thoroughly integrated within the existing banking infrastructure, which should combine “click” (e-banking) with “mortar” (physical branches) due to the importance of public trust in banks, the value of an established brand name, and the desire of customers to do something physically.

According to this view, Internet is regarded simply as another distribution channel as a complement to physical braches, phone banking and ATM networks. The dominance of the so-called “click and mortar” model can be explained by its success on the ground. Two good examples are Wells Fargo in the US and Nordea in Scandinavia.

Nordea (Scandinavia), has 2. 3 million online customers, representing over 20% of its total customer base. It has the highest share of online customers. They share the following common elements:  Both are leaders in their traditional markets and thus can capitalize on a sizable customer base. Furthermore, their customer base is technologically sophisticated. California and Scandinavia have extremely high rates of Internet use. Both are technologically advanced and started early in Internet deployment.

Wells Fargo started e-banking business as early as in 1989. Both have tightly integrated Internet in their operations and their existing infrastructure. Both have large number of SME customer base.

Prospects Bottom line

the ability to mainstream SME and individuals into E-banking.

Trend

The major application of e-banking—SME finance E-banking is used more and more for improving access to finance. Financial constraints for SMEs have never been effectively solved and have been thought inevitable. This section will cover the advantages of e-banking on this aspect.

Obstacles to SME’s access to finance

• from banks’ perspective

High costs and low profitability of SME loans because of the small loan size. High risks of SME loans due to lack of business track record, credit history, and transparent information. Evaluating SME risk is “too labor- intensive” to be profitable. Many banks lack strategies and skills to tackle impediments associated with SME finance. In many developing countries, the staff of banks lack necessary skills to appropriately assess credit risks of SMEs

• from SME’s perspective

Inappropriate products and services, which are rigidly supply-driven instead of demand-driven. Commercial bank products are usually designed to meet the needs of large corporations; few products and service are specifically tailored to the needs of SMEs. SME sector is usually underserved.

High interest rates. SMEs usually require much smaller loans than large enterprises. banks, therefore, usually charge high margins to cover the costs.

Over insistence on collaterals and guarantees. SMEs usually have low- level of fixed assets and relatively high- level of working capital. Therefore, when lending to an SME, a bank needs to assess the SME’s economic viability and future cash flows instead of collaterals. However, in many developing countries, banks are still in the very early stage of mastering sound lending policies and good credit practices. Their lending appears to simply rely on collateral rather than cash- flow projections. banks’ lack of capacity of non-collateral credit assessment has caused them unable to provide lending services to SMEs.

New Technology, New Hope for SME Finance

From bank’s side, new technology (e-banking) makes SME finance economically possible lower operational costs of banks

• Automated process
• Accelerated credit decisions
• Lowered minimum loan size to be profitable potentially lower margins
• Lower cost of entry Expanded financing reach Increased transparency  expand reach through self-service Lower transaction cost Make some corporate services economically feasible for SMEs Make anytime access to accounts and loan information possible.

From SMEs’ perspective E-banking business makes access to finance from banks attractive. SMEs have benefited from the development of E- finance and gradually stepped out of the informal sector. In particular, E- finance offers the following attractive benefits for SMEs: Ease of use Lower costs of financing Convenience Time savings Operational efficienc

From the government’s perspective New technologies have provided the incentives/benefits for the government to improve SME finance by

• Increasing employment.
• Contributing to poverty reduction.
• Contributing to economic development.
• Reducing the informal sector and cash economy.

Challenges and policy implications

Cross-border e-banking is defined as the provision of transactional on- line banking products or service by a bank in one country to residents of another country. BIS, 2003)

• A note on the definition: A bank delivering its e-banking activities via its physical branches/ subsidiaries in a host country does count into cross-border e-banking.

A further note: banks can use the new delivery channel (e-banking) reach customers in another country without as much reliance on physical presence and the significant investment that it entails (example).

Two scenarios

The in-out scenario — In-country institutions providing banking services to customers outside the home country.The out- in scenario—institutions based outside the home country providing banking services to parties within the home country.

Raised many challenges and questions for banking regulatory authorities (both home and host)

• Who should take the supervision responsibility? The borderless nature of e-banking increase the potential for jurisdictional ambiguities with respect to the supervisory responsibilities of different national authorities. Such situations could lead to of cross-border e-banking activities.
• Does it need to be licensed? Banks that engage in cross-border e-banking may face increased legal risk. Specifically, unless banks conduct adequate due diligence they run the risk of potential non-compliance with different national laws and regulations, including 8 applicable consumer protection laws, record-keeping and reporting requirements, privacy rules, AML rules.
• Non-banks may offer with greater facility bank- like services without any type of supervisory approval or oversight due to definitional ambiguities that may exist wit regard to what constitutes a bank (or banking services).
• Which country’s law applies to cross-border e-banking activities. Role and responsibilities of the home country banking supervisor and local supervisor. Supervisors need to recognize that the Internet allows for the provision of e-banking services that can p geographic borders and potentially call into question existing jurisdictional authorization requirements and the regulatory processes;
• Supervisors need to recognize the implications of taking a restrictive approach toward currently regulated banks without an even-handed treatment of foreign organizations that may conduct identical or nearly identical activities via the Internet in the local jurisdiction. Supervisors should ensure that banks appropriately manage the legal uncertainty during the period while the legal infrastructure for cross-border e-banking remains under construction.

Policy goal

The objective of both the host and home supervisors should be to avoid or minimize legal risks stemming from jurisdictional ambiguities, and to ensure that e-banking activities are adequately supervised with clearly defined supervisory responsibilities.

Basic principle

Focus attention on the need for effective home country supervision of cross-border e-banking activities on a consolidated basis as well as continued international cooperation between home and local banking supervisors regarding such activities given the possible absence of a physical banking presence in local jurisdiction. Such as focus is essential to promote safe and sound cross-border e- 9 banking without creating undue regulatory burden or impediments to banks’ use of the internet delivery channel to meet customer needs.

Complementary principle

Home supervisors should provide host supervisors with clear information on how they oversee a bank’s e-banking activities on a consolidated level. Host supervisor would generally rely on the home supervisor to effectively carry out its supervisory program. Where there are concerns about the effectiveness of a home supervisor’s oversight program, the host would approach the home supervisor on a bilateral basis. The host supervisor will need to consider what actions may be appropriate to protect local residents and their banking system.

Cooperation among national supervisors . Rapid pace of development of e-banking and the associated risks will require supervisory agility, resources and, in the crossborder context, cooperation between home and host supervisors.

Challenges

1. Theft of personal identity
2. Privacy issues
3. Who take the responsibility in case of fraud

Essential are efforts to define the privacy framework and to use technology to solve contract enforcement problems.

This intensifies challenges to the management to ensure that adequate strategic assessment, risk 10 analysis and securities reviews are conducted prior to implementing new e-banking applications.

Outsourcing issue

E-banking increase banks’ ependence on information technology, thereby increasing the technical complexity of many operational and security issues and furthering a trend towards more partnerships, alliances and outsourcing arrangements with third parties, many of whom are unregulated.

E-security issue

The internet is ubiquitous and global by nature. It is an open network accessible from anywhere in the world by unknown parties, with routing of messages through unknown locations and via fast evolving wireless devices.Therefore, it raises significant challenges on security controls, customer authentication techniques, data protection, audit trail procedures, and customer privacy standards. § While companies have been keen to embrace the potential offered by these technologies, few understand the inherent vulnerability and risks associated with e- finance. Since 1999, Brazil has seen a 418% increase in electronic security incidents; Korea has seen a 932% increase and Japan has seen over 1000% increase in malicious electronic security incidents (Tom Glaessner et al, 2003).

Authentication of e-banking customers

• Appropriate measures to ensure segregation of duties
• Establishment of clear audit trails for e-banking transactions
• Non-repudiation and accountability for e-banking transactions
• Centralized-back office to free staff time in sales and services areas and to consolidate process consistently across the organization.

Develop automated credit authorization system by developing appropriate credit scoring system and cash- flow scoring system to reduce operating costs, improve asset quality, and increase client profitability.One of the major benefits of credit scoring system is that lenders can make credit decisions without necessarily obtaining financial statement, credit reports, or other time-consuming and hard-to-get information. In particular, the financial statements of SMEs are often not complete and difficult to get.

Legal and reputational risk management

• Appropriate disclosures for e-banking services
• Privacy of customer information
• Capacity, business continuity and contingency planning to ensure availability of e-banking systems and services
• Incident response planning.

Policy implications/recommendations

• Improve system infrastructure environment for e-banking business Strengthen payment system (including RTGS, bulk/low value payment system).
• Improve the settlement system (e. g. , for credit cards and other forms of electronic transactions).
• Build-up transaction reporting/reconciliation services.
• Establish credit information registry and disseminating system.
• Credit information registries, commonly known as credit bureaus in many countries, can reduce the extent of asymmetric information by making a borrower’s credit history available to 3 potential lenders.
• Lenders armed with this data can avoid making loans to high risk customers, with poor repayment histories, defaults, or bankruptcies.
• Once a lender makes a loan, the borrower knows that their performance will be reported to the credit bureau.
• The information contained in a credit registry becomes part of the borrower’s “reputation collateral”; late payments or defaults reduce the value of this “collateral” providing an additional incentive for timely repayment.
• At the same time, by reducing the information monopoly that banks have over their existing borrowers,

International carriage by air is one of the greatest marvels of this remarkable age of science and technology and India has emerged as one of the most promising and fastest growing aviation markets in the world.

To keep pace with this growth, large orders for aircraft acquisition have been placed by almost all airlines in India.Thus, finding enough capital for their ambitious fleet expansion programme is one of the key concerns of all Indian Airlines. Before discussing on the phrase ‘Aircraft Leasing’, it is pertinent to note that an aircraft cannot be leased but can be bailed. Under Transfer of Property Act, 1882 a lease is defined under Section 107 but relates only to immoveable property but not to movable property. So the appropriate word to be used is ‘Bailment of an Aircraft’ defined under Section 148 of the Indian Contract Act, 1872. Generally in common parlance it is used as ‘Leasing of Aircraft’.Aircraft Leasing has become a common technique to acquire an aircraft, since this asset has become expensive and always subject to a variety of laws and regulations.

One of its main advantages is that it assists to settle cost considerably. The players in Airline industry can be categorized in three groups like Public Players, Private Players and Startup Players. Owning an aircraft is an expensive affair. An Airliner’s decision to acquire an aircraft is invariably accompanied by the question of whether the aircraft is to be taken on lease or to be purchased.The answer largely depends on the airline’s requirements, cost of the aircraft, availability of capital, legal constraints and taxation issues. Prior to the 1980’s purchasing an aircraft was the primary choice for the airlines – but new aircrafts were becoming an unattractive proposition for airline operators to buy aircrafts. Therefore, it is a common practice in the airline business to take aircrafts on lease.

Leasing not only helps in increasing the fleet size at a fairly quick rate but also, and more importantly, reduces the cost of airline operators.There are different types of leases depending on the terms and conditions of the agreement like (i) Finance Lease and Operating Lease, (ii) Leveraged Lease, (iii) Sale and Leaseback, (iv) Wet Lease and (v) Dry Lease. In order to tap the more conventional and cost effective sources of aircraft financing, it is essential that the Indian legal system be able to generate sufficient confidence in Bankers, Financiers and Aircraft Lessors as being protective of their ownership rights and being clear and transparent so that there are no ambiguities regarding applicable laws.The criteria for leasing of aircrafts by Indian Operators are mainly based upon the permission from the Director General of Civil Aviation (DGCA). DGCA’s permission is mandatory before leasing an aircraft in India. An Indian operator can either take an aircraft on lease from a foreign operator or another Indian operator but for an acquisition of an aircraft permission is required from the Ministry of Civil Aviation and also from Reserve Bank of India (RBI).The most widely used method of aircraft acquisition in India is leasing, out of which operating lease is the most popular.

The advantages of leasing to airlines are volume discounts for aircraft purchase can be passed on to airline, the conversion of an airline’s working capital and credit capacity, the provision of up to 100% of finance, with no deposits or pre-payments, the possibility of excluding lease finance from the balance sheet etc.The possible disadvantages could be a higher cost than, say, debt finance for purchase, the profit from eventual sale of the aircraft going to the lessor (as a title holder), aircraft specifications not tailor-made for lessee airline (short term leases) etc. The important issues involves requirement at lease commencement and termination (i. e. lessee payment obligations and security, subleasing, repossession, governing law and jurisdiction, delivery conditions, date of elivery, acceptance and inspection of flights, registration formalities, and return conditions), Lessee Payment Obligations and Security (i. e. Lease rent, security deposit, maintenance reserves), Repossession and Tax issues etc.

In conclusion, if the Indian Airline Operators enter into agreements on Leasing of Aircraft from a foreign company then the issues at international front will multiply like that of conflict of laws, international instrument to bring uniformity in asset-based financing etc.

Introduction

Developed and developing economies depend on banking sector for all the financial transactions, be it government or corporate or even citizen. Banking sectors of many developing countries was recently liberalised. One such country is India. The Indian liberalisation took place due to the ineffectiveness of the banking sector. The liberalisation leads to cut throat competition. India has a huge population and the massive development results in opportunity. In order to compete and survive in this competition there is a need for a strong concrete base with loyal customers. This group of customers can be gained through retention programs. Customer retention in Indian banking sector is proving vital with time. There are recent problems like the financial recession, where the banks can rely only on these customers. Many banks in the Indian sector have already experienced the importance of customer retention and are improving in the customer retention activities by increased investments. Bank of India was the 1st bank to introduce the 1st online banking facility to more than 100-Thousand customers. The most important factor of any firm is the customer. Without customers, a firm cannot do business, as they are the end users of the products. Peter Drucker in his book ‘The Practice of Management ‘ has stated that, ‘the customer is the force who decides the business, the production, and the profitability of the firm (Parasuraman et al., 2006).

In today’s world customers are regarded as the king with the status equal to The God. They are not just local but they are all over the world. Banking companies in this era do not just concentrate on the local or host country markets but also the cross border business. For instance ICICI has 25% of its investors who are NRI (ICICI Bank Ltd., 1999). This revolution is due to the major change and development in the field of communication, technologies, privatisation and deregulations in the economies. As a result of this there is a creation of new market and also rise to competition. The competition is intense even for the survival, and this can be met up by only having good customer relationship. The work does not stop at acquiring customers. The real efforts starts after the customer has been acquired, it is crucial for a company to offer them unique products and maintain a friendly relationship and proper communication channel with the customers in order to make sure that the business is not lost. A healthy and long term business relation will provide a great benefit to banks. It is less costly to maintain any relationship with any existing customer. At the same time, a loyal customer will also gain much more benefits in return such as low rate of interest on loans and credit cards. Businesses use the tool of CRM (Customer Relationship Management) to retain their customers in today’s business. According to Bejou et al, CRM is a process in which companies identify its profitable customers and then shapes its interaction with the customers in a way that increases the current and future prospective of business. (Bejou et al., 2006).

The Banking sector is facing rapid changes as a result of the economic reform brought about by the Government of India a decade ago (Kamath et al., 2003). This reform is a result of inefficient way of working in the banking systems (Turner and Arun, 2003). As a result of this everything in relation to banking is changing, right from the ownership patterns, the funding its cost and availability to the prospects of earning. There is a big change in the type of services offered. The reform program also includes the implementation of a prudential approach to bank regulation, which focuses on minimum capital adequacy requirements and supervisory control via on-site and offsite monitoring (Turner and Arun, 2003). Thus there is a feel of control of power, this is a post-modernist view. Apart from all these the banking regulators in India are struggling not because of the slow failure of Indian banks but also due to the rapid growth of the sector. As there is a rapid growth in the Indian banks lending pattern. Apart from this there is a continued increase in the consumer credit card sector. The growth of the Indian companies, their expansion and overseas acquisition is resulting in the rapid growth of corporate banking. The next section is the investment banking which is also increasing at a higher pace. These things are resulting in more and more demand for banking products. Banks like ICICI has been growing at very rapid face. Its profit growth in the year ended March 2007 is 22% (Bukoveczky, 2007).

There is massive change in this sector in regards to the development caused due to the change or advancement of technology, which has also erased the traditional boundaries of banking and also increased the business geographically. For instance, due to the net banking facilities a customer can view and print its account statement at home and also transfer the money at the same time. There is no need to physically go at the bank. Not only the companies but also the governments are seeking better banking services for their organisational efficiency. SBI has the largest ATM machines; in 1994 it had 200 which rose to 3400 in 2004 (Joydeep and Renny, 2005). The change in the income levels and the cultural change, in regards to westernised lifestyle are increasing day by day. Indian consumers seek more and more finance and are generate more asset creation. This has lead to massive growth in the Indian retail-banking sector. The backbone to serve all these segment of customers is a strong back up of technologies. This offers the bank convenience in managing the retail, corporate and government clients efficiently and effectively (Kamath et al., 2003). In some Indian commercial banks like ICICI, Bank of India the stress is more on relationship building with the existing customers. Bank of India advertises as their main mission is to build relationship beyond banking (Bank of India, 2003). Thus in this excessive competition in the banking sector is seen increasing day by day with the advent of various foreign banks like the Duetche, Barclays have brought about a revolution in the customer service, since then not only creation of customer but also retention of customer through customer relationship models have taken pace (Sureshchander, Rajendran and Anantharaman, 2003).

Customer retention is a structure of act ions carried out by a firm to augment their process, depending upon the positive position of the customers that result in success through customer purchase. Another definition for customer retentions stresses more on the firm’s commitment in case of customer retention. The companies’ processes should enhance, the constructive outline to shape the behaviour of the customers with the existing pat terns keeping the future objectives of the customers mind set of business with the firm. This is to establish the future relationship with the customer. The banking growth became the heart of the economical growth in India (Prasad, Bhide and Ghosh, 2002).These reform brought a massive growth in this sector and also increased the competition by two fold, this has also brought about a huge pressure to the Indian banking sector (Pauchant and Roux-Dufort, 1993).

Challenges for Survival based in different factors of Environment

Each bank need’s to provide something which is unique to its customer, so that the customer expectation can be full filled. It’s very important for a bank to keep a continues update in their technology. This will help to retain the old customer at the same time attract and upgrade new customers. With the help of new companies which deal in keeping a track and data base of customers, banks can always take advantages. They can use such technology to keep in touch with the customers and help them to achieve satisfaction. Finlay this is what a bank has to deal with. This will help the bank to retain the customer and achieve huge profit at the same time it helps to get new customers with the help of referring. With the use of technology such as Telecom and Internet Access the world is becoming a smaller place to live in, which results in tuff competition. Work done by Parasuraman, Zeithaml, and berry between 1985 – 1988 gave us a new tool called SERVQUAL which gives us an exact graph of what a customer expectation of performance and what has been delivered to them (Parasuraman, Berry and Zeithaml, 1991).

Economic and Market plays a key role in making the profit for the bank. There is a direct pressure on the margin of profit due to ever increasing competitor in the market who may have a strong base in other country and strong brand name also. For instance HSBC and Barclays have strong base in Asia and Europe respectively, thus when they had entered in India they had kept very low margin of profit to cut out competition and enter the market. This move has helped them to grow the customer’s up to 120% from 2000 to 2010. This is causing a bad strain on tradition banks that are located within India’s geographical boundaries. To react this, now days Indian banks are opening their branches in abroad market like China, Japan, Hong Kong, UK, USA, Canada and other countries. These banks have now reengineered there way of process and have reduced the cost of operation with the use of technology (Howcroft and Durkin, 2003). A drastic reduction of transaction cost has pressured old traditional banks to undergo a change which also deals in ownership of the banks. (Prasad, Bhide and Ghosh, 2002). Economic deregulation in economy has caused free way for banks. Now the other main drawback in traditional Indian banking sector is due to the ownership Government of India owes the most part of banking sector. The Basel Committee on Banking Supervision (1993) argues that government ownership of a bank has the potential to alter the strategies and objectives of the bank as well as the internal structure of governance (Basel Committe on Banking Supervision, 1999). It is suggested that the development of banks can be done by divestment practices in Indian banking sector. (Turner and Arun, 2003). Every bank’s need to always consider the important of market they dealing in. For instance, Indian customers always want to get higher interest rate in there saving account. As a result bank has to compete against each other in this. Whereas, westerners want better service management instead of higher interest rate.

The Customer data collection plays a significant role in regards to privacy of the customer. International difference in legal framework are a great challenge and treat for global companies seeking to use CRM to tailor and alter the products as per each customer (McKenzie, 2002).The firms in India don’t feel comfortable in exchanging the customer data with other companies. Where as in US, firm have considerable latitude to collect, store and even exchange sell and buy data on individual customers. The use of direct marketing in USA sometime selling of data can cause a huge penalty (Petter and Rogers, 1993).According to most modernist authors, the legal framework has some limitation’s to the working of the society. Though Indian banking is subjective to sever criticism for its high amount of bad debts and low profit, against this is the glittering contribution to the development and diversification in Indian economy which is witness in the last 3 decade (Prasad, 1997). Banking is no longer regarded as a business dealing with money transactions alone, but it’s regarded as a business related to information on financial transaction (Padwal, 1995). Although the Reserve Bank of India, the country’s central regulatory is trying to ease the legal frame work and is moving towards liberalization and globalization thus helping the nationalized banks to compete against the new foreign banks in the country (Angur, Nataraajan and Jahera, 1997).

Conclusion

The role of society plays an important role in working of the firm. Different value system such as culture, language, religion plays a significant role in person’s life style and habit. For instance in Islam, excepting any type of interest in form of money is banned under the religious law. As a result bank, have to keep in mind such a strong point. In India, majority of the people believe in keeping money at their home, and if want to keep it in the banks they will always prefer nationalized banks. This could lead to strong competition and can cause a major failure also.

1. INTRODUCTION

Organisational structure refers to the pattern of relationships among the various components exiting in an organisation. It establishes the relationship between individual occupying various positions in the organisations. The report describes the challenges faced by the project manager when dealing with different kind of organisational structure. The study starts with a discussion on the various types of organisation structure. It further analyses the characteristics of each organisational structure and tries to find out the challenges faced by the project manager for executing the project under different organisational structure.

2. TYPES OF ORGANIATIONAL STRUCTURE

The structure of an organisation depends on various factors. It can be seen that in most of the oganisations the structure is not predetermined but it is evolved with time. The study carried out by Pearson, 2010 states that the external environment of the organisation plays an important role in deciding the structure of any organisation. Factors like customer mix, competitor actions, government regulations and policies, economic conditions, availability of resources and technology plays pivotal role in formulating the organisational structure (EGPL, 2004). The structuring of organisations can be carried out based on functions, projects or combining both. The different types of organisational structure are given below.

a. Functional organisation

Functional organisations are structured by grouping people performing similar activities (Pearson, 2010). All activities connected to a particular function are placed under one unit. Sub units are created under units to cater to the different activities coming under one unit. This results in the organisational structure to look like a pyramid as shown in Figure 1. The functional organisational structure offers the maximum flexibility and efficiency in the usage of staff (Bobera, 2008). The allotment of an individual for a particular function increases the efficiency in the long run which helps to maintain the intellectual of the organisation. The formation of structure in terms of structure helps to avoid duplication of activity.

Figure 1 Functional organisational structure (Bobera, 2008)

b. Project organisation

Project organisation is structured by grouping people into teams to achieve a common mission (Pearson, 2010). This type of organisational structure combines a team of experts from different disciplines to achieve a common goal within a given amount time and resources. Organisations which adopt project organisational structure also have some staff position to cater to the requirements of different projects (Shtub and Karni, 2010). The main advantage of the structure is that the main focus of the team is on the mission or the clients for whom the project is carried out. The structure of a project organisation is given in Figure 2.Bobera (2008) states that project manager play a crucial role in project organisational structure. He functions as the central authority for implementing the necessary actions to achieve the goal of the project within the given time.

Figure 2 Project organisational structure (Shtub and Karni, 2010)

C. Matrix organisation

Matrix organisation tries to find a balance between project and functional organisational structure. The matrix structure creates a dual hierarchy in which there is a balance of authority between the project emphasis and the firm’s functional departmentalization (Pearson, 2010). Matrix organisations help to achieve quick response to external requirements as well as good operating efficiency. The structure of a matrix organisation is given in Figure 3.

Figure 3 Matrix organisational structure (Pearson, 2010)

3. CHALLENGES FACED BY PROJECT MANAGER

This section discusses the challenges faced by the project manager in dealing with different types of organisational structure.

a. Challenges in functional organisation structure

The staff in a functional organisation is structure based on function and has a clear superior. One of the advantages of this type of structure is that it is easy to find out experts required to work in a project due to the availability of experienced staff in the structure. This will help the project manager to identify required resources at lower cost and time (University of Utah, 2009).

The project manager has to face many challenges in functional organisational structure due to the simple fact that this structure is not designed for executing a project. The project scope of this structure is limited to the boundaries offered by the function assigned to each team. It can be seen that even though the project manager guides the project based on client requirements, the interests of client is getting only secondary importance in this type of structure. The staff in the functional structure is more oriented towards one type of function. The job orientation of staff acts like a hurdle for Project manager due to the fact that multidisciplinary job capability of staff is highly essential for the successful implementation of project. Bobera (2008) states that even though authority and responsibility of project are clearly defined for the project manager, it is not explicit for his team members due to the functional structure of organisation. This creates lack of commitment and reduced feeling of responsibility and affects the successful completion of the project (Impacto4dev, 2007). The motivational opportunity of the project manager on his team members is also limited due to the reduced control.

The resources and budget in the functional organisational structure is controlled by the functional manger. This acts like a hindrance to the smooth functioning of project manager because of the non-availability of human and financial resources at the correct time and place which is highly essential for the management of the project.

b. Challenges in project organisation structure

Project organisation structure can be considered as the other extreme of functional organisation structure. Studies by University of Utah (2009) points out that even though the project organisation structure offers great flexibility in terms of managing a project, project manager has to face some challenges for the execution of the project.

Shtub and Karni (2010) states that a project organisation deals with a number of projects at the same time which call for the requirement of highly specialized expertise in different project at the same time. This creates a challenge for the Project manager to ensure the availability of the right kind of person for his project. It is also seen that some projects appoints experts on full time basis even though the full time participation of the person is not required. Under these circumstances Project manager finds it difficult to divide the job equally among his team members.It is also found the scope of individual learning is very limited in project organisation structure due to the non-availability of repetitive jobs. Studies by Flannes (2004) show that individual learning skills is one of the important factor for the success of a project. The lack of learning opportunity also stands as a hurdle for project manager in terms of availability of experienced man power.

Studies by Techrepublic (2001) shows that Project manager can easily justify and manage the resources in long duration of projects while it will be difficult in small duration projects. It is found that the requirement of resources like people, technology etc. will be between projects. The execution of small duration projects can cause wastage of human and technological resources which can cause challenges for the project manager in terms of the viability of the project.

c. Challenges in Matrix organisation structure

Matrix is a grid like organisational structure that allows a company to address multiple business dimensions using multiple command structures Studies show that in matrix organisation project manager is a part of functional organisation structure and he will change to project organisation structure as and when required. Project manager may devote only part of his time for small projects while he will be fully engaged in complex projects. The organisational structure of matrix organisation ensures that project manager is the single contact point for the customer (Thomas and Laura, 2004).

Project manger has got certain advantages in matrix organisation like quick and easy transfer of resources, increased information flow through lateral communication channels and innovative solutions to complex problems. It is found that project manager has to face some challenges in Matrix organisation along with the mentioned advantages. Studies by Bobera (2008) shows that good clarity is existing for the power of decision making in functional and project organisational structure.The decision making authority is very balanced in Matrix organisation and any ambiguity in it can cause chaos which leads to difficulty for the project manager to lead the project.

Matrix organisation is having the opportunity to share resources among projects. This may cause shortage of resources in projects when a number of projects are dealt at the same time. It will lead to conflict among project managers and can affect there morale. The definition of organisation structure as stated by Bobera (2008) brings out that in matrix organisation the administrative decisions are taken by the project manager while the technical decisions are controlled by the manager in the functional department. The capability of the project manager to negotiate for the technical resources at the correct time is a key issue for the success of the project.

4. CONCLUSION

The study analysed the different forms of organisational structure and the challenges faced by project manager under each structure of organisation. It is found that in functional organisational structure the control of project manager on his team employees is less due to the functional nature of working of this structure. The study also revealed that the client’s requirements are getting only secondary importance in this structure which is acting as a hurdle for project manager for the successful completion of the project. The research also points out that even tough project organisational structure is designed for managing projects, project manager faces the challenge of getting the right kind people for carrying out the job at the right time. He also finds difficulty in promoting individual learning. The study also show that managing small projects is difficult due to the ambiguity in the allocation of resources for the project. The problem of lack of clarity in decision making can cause chaos in matrix organisation which can hinder the smooth flow of project activities. The study concludes that the management of project under any organisational structure is a big challenge. The ability of project manager to negotiate and communicate with people plays a big role to overcome the challenges and to handle the project in a smooth and successful way.

a. Type of organisation structure which is most effective for managing projects in a small to medium sized enterprise with 150 employees.

Small and medium sized enterprise are either in the emerging or growth stage. The enterprise in the emerging stage is usually controlled by the founder. He makes all decisions and employees under him execute his decisions. The simple organisational structure for an emerging organisation is given in Figure 4.

Figure 4 Simple organisational structure (Craig and Cole, 2010)

The organisation slowly transforms from emerging stage to the growth stage. During this stage owner realizes that he will not be able to handle the entire functions of the company. He starts inducting new people to the organisational structure to perform various functions. The function includes activities like marketing, sales, human resources and accounts. The organisational structure for a medium sized organisation is given in Figure 5. It can be seen that the structure represents a functional organisation where individual teams are made to perform each function. The study also shows an enterprise with 150 employees cannot handle more number of projects simultaneously. This also justifies the adaptability of functional organisational structure for small and medium sized enterprise for managing projects.

Figure 5 Organisational structure for medium sized enterprize (Jones International, 2010)

PART – B

The Gantt chart for the advertising campaign of PM computers is given in Figure 6. The start time, finish time and slack of each activity is given in Figure 7.

Figure 6 Gantt chart for the advertising campaign of PM computers

Figure 7 Start time, finish time and slack of each activity

Figure 8 Network diagram for the advertising campaign of PM computers

It can be seen that the project starts on August 4, 2014 and ends on November 14, 2014. The present project is having two critical paths based on the given schedule. They are 1-3—8-12-15-17 and 1-3-4-10-11-14-17. The specified starting date in question is shifted by one day since August 3, 2014 is a Sunday. The project analysis shows that the slack of activity ‘developing print advertising layout with agency’ is zero. This means that the activity forms part of critical activity. Delay of four days in the activity delays the project by four days. The delay in the activity makes 1-3-4-10-11-14-17 as the critical path. The early finishing of design training course by two days will not affect the project schedule as this activity is not part of critical path. A delay of two days for activity ‘review and print of in-house material’ will not affect the project schedule as the slack of the activity is 11 days.

REFERENCE LIST

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Craig, D. and Cole, E. (2010) Principles for structuring small business and farms. Purdue: Purdue University. Available at: [Accessed 22 April 2014].

FEGPL (2004) ‘Project management Key tool for implementing strategy’, Journal of Business Strategy, 25(5): pp. 55-60.

Flannes, S. (2004) Effective People Skills for the Project Manager: A Requirement for Project Success and Career Advancement. Oakland: Flannes Associates. Available at: < www.sas.com/proceedings/sugi29/131-29.pdf> [Accessed 22 April 2014].

Jones International University (2010) ‘Organisational structure and change’,Principles of Management, v 1.1: pp. 182-202.

Pearson (2010) ‘The organizational context’, Journal of Project Management, (2): pp. 30-69.

PM4DEV (2007) ‘Project management organizational structure’, Project Management for developmental organisations, 3(8): pp. 9-15.

Shtub, A. and Carni, R. (2010) ‘Organization and Organizational structures’, The dynamics of supply chain and process management, XIII: pp. 20-30.

TechRepublic (2004) Project Management Best practices. Texas: TechRepublic. Available at: [Accessed 22 April 2014].

Thomas, S. and Laura, S.D. (2004) ‘Challenges and strategies of Matrix organisations’, Human Resource Planning, 28.1: pp. 39-48.