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Project Organizational Design

Project Organizational Design

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2.1
SECTION2
PROJECT ORGANIZATIONALDESIGN
2.1 ORGANIZING FOR PROJECT MANAGEMENT 
This section provides an examination of the organizational design usedfor the management of projects. It addresses shortcomings in the tradi-tional organization designs as well as the strengths of the project organi-zation.
2.1.1 Shortcomings of the Traditional OrganizationalDesign
Traditional organizational hierarchies tend to be slow, inflexible, and failto provide for an organizational focus of project activities.
Barriers commonly exist in the traditional organization, which stifles thehorizontal flow of activities required when projects are undertaken.
Inadequate delegation of authority and responsibility to support projectactivities is a common problem in the traditional organizations.A modification of traditional organizational design is required to sup-port project activities.
2.1.2 The Project Organization
The project organization is a temporary design used to denote an inter-organizational team pulled together for the management of the project.
Source: PROJECT MANAGER’S PORTABLE HANDBOOK
Downloaded from Digital Engineering Library @ McGraw-Hill (www.digitalengineeringlibrary.com)Copyright © 2004 The McGraw-Hill Companies. All rights reserved.Any use is subject to the Terms of Use as given at the website.
 
2.2
SECTION TWO
Project ManagerManager of Projects Functional ManagerProject ManagerProject ManagerProject ManagerProject ManagerFunctional ManagerFunctional ManagerGeneral ManagerRepresents the project functional interfaces
FIGURE2.1
A basic management matrix.
Personnel in the project organization are drawn from the supportingfunctional elements of the enterprise.When a project team is assembled and superimposed on the existingtraditional structure, a matrix organization is formed. Figure 2.1 portraysa basic project management matrix organizational design.
2.1.3 Alternative Forms of the Project Organization
Functional Organization—The project is divided and assigned to func-tional entities with project coordination being carried out by functionaland higher level managers.The Functional Matrix—The project manager is assigned with the au-thority to manage the project across the functions of the enterprise.The Balanced Matrix—A design where the project manager shares theauthority and responsibility for the project with the functional man-agers.
PROJECT ORGANIZATIONAL DESIGN
Downloaded from Digital Engineering Library @ McGraw-Hill (www.digitalengineeringlibrary.com)Copyright © 2004 The McGraw-Hill Companies. All rights reserved.Any use is subject to the Terms of Use as given at the website.
 
PROJECT ORGANIZATIONAL DESIGN
2.3
The Traditional Matrix—The project manager and the functional man-ager share complementary authority and responsibility for the manage-ment of the project.
2.1.4 Traditional Departmentalization
The most commonly used traditional means used to decentralize authority,responsibility, and accountability include the following:
Functional Departmentalization, where the decentralized organizationalunits are based on common specialties, such as finance, engineering,and manufacturing
Product Departmentalization, in which organizational units are respon-sible for a product or product lines
Customer Departmentalization, where the decentralized units are des-ignated around customer groups, such as the Department of Defense
Territorial Departmentalization, where the organizational units are basedon geographic lines; for example, Southwestern Pennsylvania marketingarea
Process Departmentalization, where the human and other resources arebased on a flow of work such as an oil refinery
2.1.5 The Matrix Organization
In the matrix organization, there is a sharing of authority, responsibility,and accountability among the project team and the supporting functionalunits of the organization. The matrix organizational unit also takes intoconsideration outside stakeholder organizations that have vested interestsin the project. The matrix organization is characterized by specific delin-eation of individual and collective roles in the management of the project.
2.1.6 The Project-Functional Interface in the MatrixOrganization
It is at this interface that the relative and complementary authority-responsibility-accountability roles of the project manager and the func-tional manager come into focus. Table 2.1 suggests a boilerplate modelthat can be used as a guide to understand the interface of relative authority,responsibility, and accountability within the matrix organization.
PROJECT ORGANIZATIONAL DESIGN
Downloaded from Digital Engineering Library @ McGraw-Hill (www.digitalengineeringlibrary.com)Copyright © 2004 The McGraw-Hill Companies. All rights reserved.Any use is subject to the Terms of Use as given at the website.

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