Project Management

Chapter 3
Project Organization
Sample Organization Chart
Alternate Organization Structures

• These hierarchical reporting and communication networks are reflected in the organizational structures
themselves. Reporting connections, a formal chain of command, and other forms of power make up the
management hierarchy. Hiring, firing, and promotion are all part of the official business that goes on up and
down this authority chain.
• Informal organization can exist in parallel to the official organization structure. There may be cliques and
groups of individuals that operate well together, but not so well with others outside of their subgroup in an
informal organization. Informal networks may be very strong and beneficial influences in companies with high
degrees of professionalism (such as information systems work).
• Project management may be divided into three types: functional, project, and matrix.
• An organization's purpose, job type, and operating environment all influence the best structure.
Alternate Organization Structures

Functional Organization

• Organization through specialization is achieved via Figure: Organizational elements by

functional differentiation. Formal rules, processes, and specialization
integrated plans and budgets are used more often in this kind
of organization to keep activities under control. Each
functional group leader is in charge of a segment of the
project in a project context.
• Having a functional structure means that people are more
likely to work together as a team and learn new skills more
quickly. Accountants spend their time solving accounting-
related issues, and they get extensive training in the field.
Alternate Organization Structures

Project Organization
Figure: Skills Grouping
Pure project organization involves creating a separate,
independent organization specifically for
accomplishing a particular project. The Olympic
Committees, established to ensure the success of each
Olympic Games, are one kind of illustration. The group
has no motive to continue once the project is completed
(the next round of games or elections will involve other
locations and candidates).
Project groups may be independent entities on their
own.
Alternate Organization Structures

Matrix Organization

If an organization continually operates in a project mode (many organizations do in construction, in information

systems, and in consulting), there is a need to quickly create large project groups. The matrix structure of a
conventional functional organization is a grid-like arrangement of reporting and authority connections. It's utilized by
companies who use project teams or product groups more than just a little bit.
The PMBOK uses terms like "weak matrix" and "strong matrix" to describe functional matrix structure and project
matrix form, respectively. The Project Management Institute (PMI) supporters often use these phrases.
Functional managers get reports from specialists on problems related to their specialties, whereas project managers
receive reports from specialists on particular tasks. It is common for project managers to hire functional experts who
will be stationed wherever the project is being executed.
Alternate Organization Structures

Matrix Organization Figure: Matrix Organization

As a result of the accountant's career spanning many
projects, the chief accountant at the permanent
organization typically decides on the project
accountant's advancement and increases. The chief
accountant would be the permanent supervisor of the
project accountant, although project managers have
some say in the process.
The matrix structure of an organization has several
drawbacks. Those who like a lot of organization will
be confused by the dual reporting system.
Comparison Of Organization Structures In Projects

Task Forces

Task forces are groups of people assembled for a limited time to address a specific issue. While in the military,
various kinds of troops are often combined under a temporary commander for a particular purpose.
Hybrids

Functional matrix and project matrix structures are hybrids of the three basic forms presented above.

An organizational structure based on a functional matrix is utilized when the project manager is limited to
assignments within a single functional group. Technical job assignments are the responsibility of functional
managers. Instead of being a full-fledged project manager, the project manager serves as a staff assistant who has
limited direct power to accelerate and oversee project operations.

The project managers and functional managers in a balanced matrix organization have approximately equal power
and responsibility for the project.
Levels Of Project Organization

Projects are organized in a non-traditional manner. The traditional structure of an organization is considerably more
rigid than the current one. Despite the fact that no organization is ever really permanent, conventional organizational
structures are built with the idea that they would last for a long time to come. They are not adaptable and need a long
time to adjust.

Within project organizations, integrators are often used to facilitate communication. Liaisons are used to integrate two
groups that are not part of the same organization. Liaisons are particularly beneficial when working with the project's
funders and team members. There are those whose duty it is to make sure something occurs, such as project expediters
or coordinators.

Criteria for Selection: Uncertainty, cost and time criticality, and the project's distinctiveness are all factors that
influence the project type. A matrix structure or pure project form provides greater control when the project is high-
stakes. Task forces and teams are suitable when there is a high degree of confidence since they need less effort.
Summary

• The aim of organizational structure is to achieve goals and react to challenges. People
working on projects are often grouped into project teams or matrix organizations.

• These types of organizations are more adaptable than functional structures, which are more
bureaucratic.

• Top management must understand the positive and negative characteristics of different
organizational forms and their variations in order to choose the most appropriate
organizational form for their scenario.

• It's also essential for people who work for them to understand why these forms exist. The
matrix organizational structure is particularly well suited to many large-scale initiatives.
End Of Chapter 3