Types of Project Organization

Three Types Of Organization

1. Functional
2. Project
3. Matrix
Functional Organization
 Functional 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.
 Functional Organization Advantages

1. Reduces duplication and overlap of

activities.
2. Provides specialization and functional
excellence.
 Functional Organization
Disadvantages
1. Can be insular (narrow-minded).
2. Teamwork is not emphasized.
3. Decisions may be parochial (unsophisticated).
4. Structure can slow communication, problem solving
and decision making.
5. Lack of customer focus.
6. Stronger allegiance (commitment) to function than
project.
Project Organizations
 Project Organizations
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.
 Project Organization Advantages
1. Team has full control over resources.
2. Organization is highly responsive to
customer.
 Project Organization
Disadvantages
1. Can be cost inefficient.
2. Tendency to stretch out work during slow
periods.
3. Potential for duplication on concurrent
projects.
4. Low level of knowledge transfer.
5. People may be laid off at the end of the
project.
Matrix Organization
 Matrix 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.
 Matrix 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.
 Matrix Organization Advantages
1. Allows efficient utilization of resources.
2. Individuals can be moved among projects.
3. Provides a core of functional expertise.
4. Facilitates information flow.
5. Team members can communicate with
project and functional managers.
6. Customer focused.
 Matrix Organization Disadvantages
1. Team members have a dual reporting
relationship.
2. A proper balance of power must be
established between project and functional
managers.
3. Conflicts regarding priorities can arise
between managers.