Chapter 13 Types of Project Organizations

1. Chapter 13Types of Project Organizations

2. Learning Objectives • The characteristics of the three types of organization structures: - functional - project - matrix • The advantages and disadvantages of each 2 2 2

3. Real World Example • Vignette: A Survey by Technical Pathways • Results suggest the following project-oriented corporate policies: • Establish meaningful organizational objectives • Include project responsibilities in job descriptions • Use team-based performance reviews • Establish career paths • Organize programs into projects and subprojects • Prioritize using project inventories • Optimize personnel resources • Coordinate inter-group transitions

4. Real World Example • Vignette: Office Politics • Organizational politics often play a major role in determining the outcome of a project. • People from different departments within an organization often work, think, and react very differently. • Unfortunately in many corporate systems there is often a focus on finding someone or some department to blame. • Putting personal or departmental interests ahead of corporate goals doesn’t work. • Projects go smoothly when everyone knows the goal and their part in attaining it.

5. Functional-Type Organization • Used in businesses that sell and produce standard products. • Groups consist of individuals performing the same function. • Periodically undertake in-house projects. • Team members can be assigned to the project. • Team members continue regular functional jobs. • Project manager does not have complete authority over team. 3 3 3

6. Project-Type Organization • Used in companies in the project business, not selling products. • Work on multiple projects at a time. • Project team is dedicated to one project. • Project manager has complete authority over team. • Each project team tends to be isolated. 4 4

7. Matrix-Type Organization • A mix of functional and project organization structures. • Used in companies that work on multiple projects at a time. • Provides project and customer focus. • Retains functional expertise. • Individuals can be assigned to various types of projects. 5 5

8. Matrix-Type Organization (Cont.) • Both project managers and functional managers have responsibilities. • The Project Manager is the intermediary between customer and company. • The Functional Manager decides how tasks will be accomplished. 6 6

9. Functional Organization Advantages • Reduces duplication and overlap of activities. • Provides specialization and functional excellence. 7

10. Functional Organization Disadvantages • Can be insular. • Teamwork is not emphasized. • Decisions may be parochial. • Structure can slow communication, problem solving and decision making. • Lack of customer focus. • Stronger allegiance to function than project. 8

11. Project Organization Advantages • Team has full control over resources. • Organization is highly responsive to customer. 9

12. Project Organization Disadvantages • Can be cost inefficient. • Tendency to stretch out work during slow periods. • Potential for duplication on concurrent projects. • Low level of knowledge transfer. • No functional “home”. • People may be laid off at the end of the project. 10

13. Matrix Organization Advantages • Allows efficient utilization of resources. • Individuals can be moved among projects. • Provides a core of functional expertise. • Facilitates information flow. • Team members can communicate with project and functional managers. • Customer focused. 11

14. Matrix Organization Disadvantages • Team members have a dual reporting relationship. • A proper balance of power must be established between project and functional managers. • Conflicts regarding priorities can arise between managers. 12 12