Guest lecture – Financial and Project Management (lecture 1)
Relevance of (F)PM course
• Societal relevance: projectivisation of society
• Personal relevance: professional skill development
What is project management?
Project management = the process and activity of planning, organizing, motivating, and
controlling resources, procedures and protocols to achieve specific goals.
It can be hard to achieve all the project goals, because it’s unique which causes new
problems.
Only 29% of the project are completed on time.
Combining hard and soft skills:
• Technical / hard skills: scope, WBS, schedules, resource allocation.
• Social science / soft skills: leadership, problem-solving, teamwork, negotiation.
The soft skills are becoming more and more important.
What are temporary systems?
Project based organizations (PBO’s) belong to temporary systems.
Temporary system = collaborative carefully planned to achieve a particular aim/task.
Two forms:
• Pre-defined: endpoint in time → completed in December 2025
• They end once complected
Types of temporary systems
Individual-based Organization-based
Limited Ad hoc or spontaneous TS: Hastily formed (inter)organizational
preparedness voluntary actions by individuals TS: initiated by non-temporary
and informal groups (disasters, organization (fight terrorist attacks)
rescue)
Extensive Profession-based TS: formed by Structurally prepared TS: ex-ante
preparedness contracting individual experts plan, task and resources (project,
(film industry, theatre) military deployments, PBO)
Project-based organization (PBO)
Project-based organization = an independent organizational form in which the project is the
primary organizational unit for economic or societal activities.
You can find them in legal profession, consultancy, marketing, film, advertising.
,Project-based organization:
Typical characteristics of PBO:
• Can be complex, non-routine tasks;
• Competences and capabilities build from project to project;
• Project managers have high status and control over functions, personnel and
resources;
• Flexible and reconfigurable;
• Series of projects.
Advantages of PBO:
• Well suited for innovation and learning;
• High flexibility;
• High employee loyalty due to short lines with the project manager.
Disadvantages of PBO:
• Learning from projects is very difficult, because you move on to the next project;
• Danger of resource duplication across multiple projects.
What is a project?
Inter-organizational projects = collaboration between multiple different organizations.
Constructions
Projectification = from fully intra-organizational to fully inter-organizational.
Shipbuilding, shipbuilder used to do it all by himself, now he’s the director.
Project-based = temporary
Movie productions, Amsterdam Dance Event (every year it’s an unique event)
Difference projects and organizations
• Projects are unique, temporary and have a specific beginning and end.
• Organizations do on-going, repetitive, routine work and are permanent.
,Projects can be described by the 4 T’s
• Time
• Task
• Team
• Transition
Time
Projects have an ex-ante determined start and end.
• Objective: linear, natural, continuous (clock-time)
• Subjective: synclinal, socially constructed, local (how we experience time)
• Temporal embeddedness: chronological (exams), event-based, entrainment-based
• Shadow of the future (you will never collaborate with a person again, so you care less)
• Shadow of the past (you worked in this team before, so collaboration is easier)
Task
Team
Transition
• Goal: transforming input into output → accomplishment
• Process: how to transform? → progression
, Intra- and inter-organizational projects
Inter-organizational temporary organization (IOTO) = legally autonomous, but functionally
interdependent firms that interact to coordinate their efforts for the accomplishment of a
joint outcome in a limited amount of time.
Public parking garage, shipbuilding
How are projects and financial management connected?
Organization of societally relevant production of goods and services has consequences for
their financial management (cashflow).
Financial management: manufacturing vs. construction
Manufacturing (permanent) Construction (temporary)
No designated purchaser Designated purchaser (client)
Design and production before mass sell One-off design and production after sell
Expectation of (indirect) sell Certainty of (direct) sell
Producer risk (not competitive enough) Producer risk: complexity and interests of
many
Some financial concepts
Cash flow = the movement of money in and out of a business, account, or your personal
finances over some time. The net balance of cash moving into and out of an organizational
unit at a specific point in time.
• Cash coming in: sales, salary, investments
• Cash going out: bills, rent, salaries, supplies
Liquidity = indication of the extent to which an organization can meet its short-term financial
obligations, influenced by cash flows.
Solvency = indication of the extent to which an organization can meet its obligations towards
its creditors in the event of bankruptcy (value assets > value of debts).
Relevance of (F)PM course
• Societal relevance: projectivisation of society
• Personal relevance: professional skill development
What is project management?
Project management = the process and activity of planning, organizing, motivating, and
controlling resources, procedures and protocols to achieve specific goals.
It can be hard to achieve all the project goals, because it’s unique which causes new
problems.
Only 29% of the project are completed on time.
Combining hard and soft skills:
• Technical / hard skills: scope, WBS, schedules, resource allocation.
• Social science / soft skills: leadership, problem-solving, teamwork, negotiation.
The soft skills are becoming more and more important.
What are temporary systems?
Project based organizations (PBO’s) belong to temporary systems.
Temporary system = collaborative carefully planned to achieve a particular aim/task.
Two forms:
• Pre-defined: endpoint in time → completed in December 2025
• They end once complected
Types of temporary systems
Individual-based Organization-based
Limited Ad hoc or spontaneous TS: Hastily formed (inter)organizational
preparedness voluntary actions by individuals TS: initiated by non-temporary
and informal groups (disasters, organization (fight terrorist attacks)
rescue)
Extensive Profession-based TS: formed by Structurally prepared TS: ex-ante
preparedness contracting individual experts plan, task and resources (project,
(film industry, theatre) military deployments, PBO)
Project-based organization (PBO)
Project-based organization = an independent organizational form in which the project is the
primary organizational unit for economic or societal activities.
You can find them in legal profession, consultancy, marketing, film, advertising.
,Project-based organization:
Typical characteristics of PBO:
• Can be complex, non-routine tasks;
• Competences and capabilities build from project to project;
• Project managers have high status and control over functions, personnel and
resources;
• Flexible and reconfigurable;
• Series of projects.
Advantages of PBO:
• Well suited for innovation and learning;
• High flexibility;
• High employee loyalty due to short lines with the project manager.
Disadvantages of PBO:
• Learning from projects is very difficult, because you move on to the next project;
• Danger of resource duplication across multiple projects.
What is a project?
Inter-organizational projects = collaboration between multiple different organizations.
Constructions
Projectification = from fully intra-organizational to fully inter-organizational.
Shipbuilding, shipbuilder used to do it all by himself, now he’s the director.
Project-based = temporary
Movie productions, Amsterdam Dance Event (every year it’s an unique event)
Difference projects and organizations
• Projects are unique, temporary and have a specific beginning and end.
• Organizations do on-going, repetitive, routine work and are permanent.
,Projects can be described by the 4 T’s
• Time
• Task
• Team
• Transition
Time
Projects have an ex-ante determined start and end.
• Objective: linear, natural, continuous (clock-time)
• Subjective: synclinal, socially constructed, local (how we experience time)
• Temporal embeddedness: chronological (exams), event-based, entrainment-based
• Shadow of the future (you will never collaborate with a person again, so you care less)
• Shadow of the past (you worked in this team before, so collaboration is easier)
Task
Team
Transition
• Goal: transforming input into output → accomplishment
• Process: how to transform? → progression
, Intra- and inter-organizational projects
Inter-organizational temporary organization (IOTO) = legally autonomous, but functionally
interdependent firms that interact to coordinate their efforts for the accomplishment of a
joint outcome in a limited amount of time.
Public parking garage, shipbuilding
How are projects and financial management connected?
Organization of societally relevant production of goods and services has consequences for
their financial management (cashflow).
Financial management: manufacturing vs. construction
Manufacturing (permanent) Construction (temporary)
No designated purchaser Designated purchaser (client)
Design and production before mass sell One-off design and production after sell
Expectation of (indirect) sell Certainty of (direct) sell
Producer risk (not competitive enough) Producer risk: complexity and interests of
many
Some financial concepts
Cash flow = the movement of money in and out of a business, account, or your personal
finances over some time. The net balance of cash moving into and out of an organizational
unit at a specific point in time.
• Cash coming in: sales, salary, investments
• Cash going out: bills, rent, salaries, supplies
Liquidity = indication of the extent to which an organization can meet its short-term financial
obligations, influenced by cash flows.
Solvency = indication of the extent to which an organization can meet its obligations towards
its creditors in the event of bankruptcy (value assets > value of debts).
