Challenges of Project Management for Small Companies

Smaller organizations, such as emerging companies in their early stages of development, typically lack the resources to fund a full-time project manager position for the entire length of a particular project.  In most cases, the project manager has multiple responsibilities and also must discharge line management responsibilities at the same time he or she is coordinating a project.  Obviously this creates a substantial risk of conflicts with respect to the time that the manager devotes to the project and how resources under the manager’s control are allocated between a project and the day-to-day activities that the manager normally oversees.  If possible, the responsibilities of the project manager should be limited to horizontal coordination of the activities necessary for completion of the project and  line managers would remain focused on their vertical (i.e., functional) duties and lending the requisite support necessary for completion of the project.

Due to the lack of resources, project managers in small companies are forced to juggle several projects at once and may encounter difficulties in planning and scheduling when there are significant differences in priorities among the projects.  Resource limitations are also an issue with respect to what the project manager can expect to obtain from the functional managers in a smaller organization.  Unlike a larger company where the project manager can negotiate with functional managers during the course of a project to obtain more resources, smaller companies generally do not have any resources in reserve that can be redeployed to a project once it has been launched.  Another resource-related issue is the lack of administrative support for project managers in smaller companies.  Smaller companies generally do not have a separate project office while larger companies, particularly in industries where projects are commonplace (e.g., aerospace or construction), may have a separate project support office or department with several full-time project managers and full-time administrative personnel to collect and organize information about the activities and procedures of the company that can be used in the project management process.  Without this type of support the project manager in a small company must invest additional personal time in collecting information on top of the activities necessary to simply manage the project.

For smaller companies projects are generally much more mission critical for the success and growth of the business simply because smaller companies typically have fewer projects and each of them represents a significant percentage of the company’s business.  Therefore, the consequences of failure on a project are much greater for smaller companies than for larger organizations that are able to spread their risk over a larger number of projects and customers.  While success with a large project can vault the business of a smaller company forward much more rapidly, senior management must be rightly concerned about whether it will need to invest in additional resources or jettison smaller customers in order to take a chance on the large project.  For these reasons, plus the fact that smaller companies are often slow to engage in wholesale delegation of authority, project managers in smaller companies can expect a higher degree of interference in the management of the project from senior management than is normally the case in larger companies.


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