Organizational Structures of Project Management

Organizational Structures of Project Management 

1. Formal Organisations
The structure that tells us the formal groupings and Specializations of activities. The groupings or activities are documented in an organisational chart to clarify the lines of authority, communication, reporting relationships, and responsibility of individuals or groups.

2. Informal Organisations
Defines the official line of authority, responsibility and reporting relationships.
Stakeholders may be individuals, groups or even organisations that have a stake or a claim, in the project’s outcome.

3. Functional Organisation
This structure is based on organising resources to perform specialised tasks or activities in order to attain the goals of the organisation.

# Hierarchical organization with vertical functional structure
# Staff are grouped and located by Speciality into Functional Departments each headed by a Functional Manager
# Each member of staff has ONE clear boss

 Advantages of Functional Organization
# Use of Home Unit
    Required technical expertise often belong to “Home” Unit and are therefore easily appropriated
    Promotes administrative continuity within and between projects
# Keeps staff located in their unit
    Allows staff to discuss project problems with Fellow Experts and thereby access and enrich an unit’s pool    of technical knowledge
    Prevents staff from being exclusively appropriated by another project. Instead a floating pool of experts can service many projects.
    Promotes technical continuity within & between projects
    Less duplication of resources and activities

Disadvantages of Functional Organization
# Authority and responsibility
   A project manager from the technical area may have knowledge and expertise of technology, but may lack critical knowledge about the business.
# Poor response time
  Projects may take longer if important decisions have to pass through several layers of management and across several functional areas.
# Client is NOT the focus
  Individuals in a functional area may act in their own best interest instead of taking a holistic view of the project.
# Duplication
  Functional units may attempt to become self-sufficient by acquiring knowledge, expertise and technology outside of its normal area of specialisation. This may increase duplication.
# Process orientation
  Getting it done within discipline approach rather than getting it done the best way it works
# Tendency to sub-optimise
  Maximise use of what you know and minimise what you don’t
# Low staff motivation towards project
  Functional areas may compete for resources and this may blur lines of responsibility.

4. Project Organizations

# Hierarchical organizations with vertical Project structure
# Staff are Grouped and located by project into project teams headed by a Project Manager (There is some inherent duplication in such a division)
  For example - Each Project must support accounting staff, facilities and resources
# Each member of staff has one clear boss

 Advantages of Project Organizations
# Clear authority and responsibility
  The project manager here is fully in-charge and has the responsibility to provide progress report to someone who has authority over all projects.
# Improved Communication
  A clear line of authority results in more effective and efficient communication
# No functional organization interfaces to manage
  No FMs to negotiate with, no function boundary protocols
# No command ambiguity
  One Boss, the Project Manager
# Project teams have high morale, commitment and task orientation
# Potential to maintain permanent specialist project team


Disadvantages of Project Organizations
# Duplication of effort
  Various projects may require resources that are duplicated on other projects.
# Project isolation
  Each project may be thought of as a self-contained unit, so the project may become isolated from other projects in the organisation
  PMs stockpile and hang on to resources “Just in Case”
# Projectitis
  Occurs when the project manager and project teams develop a strong attachment to the project and each other. These individuals may have difficult time letting it go, and the project begins to take on a life of its own with no real end in sight
# Technical experts have no professional home
  Where they can improve their skills and tap into a wider repository of knowledge and experience

5. Matrix Organization

# Hierarchical functional organization overlaid with horizontal project structure
# Staff are grouped and located by speciality into functional units headed by a Functional Manager
# Each member of staff may have TWO or more Bosses

Advantages of Matrix Organization
# High level of integration
  Cross-functional structure allows for the access and sharing of skilled people and resources from across the organisation. Less duplication.
# Improved communication
  Due to high level of integration, communication is more efficient and effective.
# Increased project focus
  Because of the above two, high level of integration and improved communication, he project team can focus on the activities of the project. This should increase the likelihood of projects being completed in time.
# Facilitates organization wide co-ordination of projects
  Discourages sub-optimisation at the project level

Disadvantages of Matrix Organization
# Power and Politics
  Confusion of authority and responsibility among project managers and functional managers.
  Project team members have more than ONE boss
# Poorer response time
  Because of confusion in command, communication can become bogged down. The project may stall and project team may begin to experience low morale, and little motivation.


6. Hybrid Matrix Organizations

Balanced Matrix - project manager focuses on defining all of the activities of the project, while functional manager
determines how those activities will be carried out.

Functional Matrix (weak matrix) - project manager focuses on coordinating the project activities of the project, while
functional managers are responsible for completing those activities that are related to their particular area.

Project Matrix (strong matrix) - project manager has most of the authority and responsibility of defining and completing
the project activities, while functional manager provide guidance and resources, as needed.