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Project Management Structure

Organizational Structure
 OS consists of activities such as task
allocation, coordination & supervision,
directed towards organizational aims.
 An organization can be structured in
many different ways, depending on their
 The structure of an organization will
determine the modes in which it operates
and performs.
Organizational Structure
 OS provides the foundation on which
standard operating procedures and
routines rest.
 It determines which individuals get to
participate in which decision-making
processes, and thus to what extent their
views shape the organization’s actions.
 Project Management Structure provides a
framework for launching and implementing
project activities within a parent
 A good structure appropriately balances the
needs of both the parent organization and
the project by defining the interface between
the project and parent organization in terms
of authority, allocation of resources, and
eventual integration of project outcomes
into mainstream operations.
Organizing Projects within the
Functional Organization
 Employees within the functional divisions of an organization
tend to perform a specialized set of tasks.
 This leads to operational efficiencies within that group.
 However it could also lead to a lack of communication
between the functional groups within an organization, making
the organization slow and inflexible.
 As a whole, a functional organization is best suited as a
producer of standardized goods and services at large volume
and low cost.
 However, once management decides to implement a project,
the different segments of the projects are delegated to the
respective functional units with each unit responsible for
completing its segment of the project.

 No change in the design and operation of

parent organization.
 Maximum flexibility in the use of staff.
 In-depth expertise of the functional
department can be used for projects
 Post-project transition is easy.

 Lack of focus on the part of functional

departments as they have their own routine
 Integration across functional units is very
 Projects may take longer time due to slow
response by functional departments.
 Motivation level among the people assigned
to the project is very weak as they lack
Organizing Projects as Dedicated
 In this structure, a dedicated independent project
teams are created.
 These teams operate as separate units from the
rest of the parent organization.
 Usually, a full time project manager is designated
to pull together a core group of specialists who
work full time on the project.
 The project manager recruits necessary
personnel from both within and outside the
parent company
 Project managers get maximum freedom in this

 It is very simple to establish.

 Fast completion of the projects is
 High level cohesiveness would emerge.
 Cross functional integration is possible.
 It is expensive
 It creates internal strife in the organization. It is
referred as Projectitis (a gap gets created between
the project teams and the people in the parent
organization and project members feel they are only
important for the organization).

 Sometimes, the technological expertise of the

specialized project teams may be very limited and
that will affect the project outcomes.
 Post project transition is very difficult as after the
completion of the project, a dilemma of what to do
with personnel arises.
Organizing Projects within a
Matrix Structure
 Matrix management is a hybrid organizational form in
which a horizontal project management structure is
overlaid on the normal functional hierarchy.
 In matrix system, there are two chains of command,
one along functional lines and the other along project
 Instead of delegating segments of a project to
different units or creating an autonomous team,
project participants report simultaneously to both
functional and project managers.
 Matrix structure is designed to optimally utilize
resources by having individuals work on multiple
projects as well as being capable of performing
normal functional duties.
 Efficient allocation of resources to
multiple projects is possible
 Strong project focus can be ensured.
 Post project transition is relatively easier.
 Flexibility in utilization of resources and
expertise is possible.

 Dysfunctional conflict may arise between function

managers and project managers.
 Infighting may occur among project managers
who are primarily interested in what is best for
their project.

 As the management principle unity of command is

violated, project participants have two bosses at
the least and hence it will create stressful
 In case of balanced matrix form, the projects get
slow down.
Organizing projects within
network organizations
 Network organization is an alliance of
several organizations for the purpose of
creating products or services for
 This collaborative structure typically
consists of several satellite organizations
bee hived around a hub or core firm.
 Corporate downsizing and cost control
have combined to provide what we call
network organizations.

 It reduces cost as overhead costs are

dramatically cut.
 High level of expertise and technology can
be brought by outsourcing and it will have
positive impact on the project.
 Lot of flexibility is there as the organizations
are no longer constrained by their own
resources but can pursue a wide range of
projects by combining their resources with
talents of other companies.

 Coordination breakdown may result when

coordinating professionals from different
 Control may be lost on the projects as the
core team depends on other organizations
on which they do not have direct authority.
 Interpersonal conflicts may arise as project
participants do not share the same values,
priorities, and culture.
relationship b/w project
characteristics and organizational
Functional Weak Balanced Strong Network
Matrix Matrix Matrix
Project Little/None

controls the