INSTITUTE – University School of Business

DEPARTMENT - Management
M.B.A.
Project Management - BAT 783

UNIT-2 Lecture 2.4 DISCOVER . LEARN . EMPOWER

Project Organization Structure
1
LEARNING OBJECTIVES & LEARNING OUTCOMES
After studying this chapter, you should be able to have a basic
understanding of :

 Project Organization Structure

 Project Management
BAT-783

Course Outcomes

CO Will be covered in
Title Level Will be covered
Number this lecture
To describe the basics of project management
Understand
in this lecture
CO1 and project planning
 
To apply project evaluation techniques on real Apply
CO2 life business proposals  
To analyze the risk involved in the internal and
CO3 external project control management Analyze

To enable students in evaluating the

CO4 performance of the project through project Evaluate
information management system
To create network diagrams for project
CO5 Create
planning and scheduling 3
 Topic – 2.4
Project Organization Structure

Source : www.knowledgehut.com
 Project Organization Structure

The project organizational structure is an essential configuration

for determining the hierarchy of people, their function, workflow and
reporting system.

It is a factor in business that plays a fundamental role in guiding

and defining the way in which the organization carries out its
operations.

There are different project organizational structures defined

according to the area in which the organization operates and activities
related to the core business.
 Project Organization Structure

• If an organization is dealing with temporary jobs, for example, the

structure will probably better manage the recruitment and
dismissal of employees as needed.

• On the other hand, if the organization is involved in a production

chain that requires continuous operation, it will have a different
structure. In this case, the task assigned, will be in order to
support employees for a longer time to achieve the goals of the
organization.

• As organizations grow or their needs change, the organizational

structure must adapt to support the new goals.
Project Organization Structure
 Why it is necessary?

• Every organization must have a well-defined organizational structure in

order to work efficiently and achieve its goals with fewer risks and obstacles.

• In the modern market, organizations must be very competitive, efficient, and

dynamic in order to survive and grow.

• Stakeholders  become, in fact, more and more aware and demanding and

want quick answers.

• Therefore, in order to meet the needs of the client and survive in the market,
each organization must build an organizational structure capable of best
supporting its goals.
 Types of project organizational structure

The PMBOK orders, organizational structures into eight types:

Organic or Simple Organization

•Functional or Centralized Organization

•Multi-divisional Organization

•Matrix Organization – strong, weak or balanced

•Project Oriented (composite or hybrid) Organization

•Virtual OrganizationHybrid

•PMO
Functions and Characteristics
 Organic or Simple Organization

•This type of organizational structure is the simplest. Businesses

composed of only one person are also included in this category.

•In this type of organization also freelancers are included. Of course,

the role of the project manager is partly covered by the owner or the
professional, who personally manage the workflows.
 Functional or Centralized Organization

• This type of organizational structure is the most commonly used.

• In a functional organizational structure, the organization is divided

into various departments where people with similar skills gather
together.

• It is the classic configuration in which the staff is structured in

areas and departments such as the sales department, marketing
department, finance department, etc.

• This structure is functional as it improves the efficiency of each

working group.
 Multi-divisional Organization

• In an organization of this kind, you can have many functional

divisions with a small centralization.

• Most of the time these divisions are independent of each other.

• Here, an organization is structured in various divisions in which

people, with different skills, are held together according to a
similar product, service or geographic location.

• Each division has the resources necessary in order to work and

can carry out the task autonomously.
 Matrix Organization

• A matrix organizational structure is a hybrid between the functional

organization and the project oriented organization.

• In a matrix organization, there can be two main structures: vertical and

horizontal.

• Here, an employee can be part of a functional group, but can also work on a
project.

• In turn, a matrix organization can be of three types:

 A strong matrix
 A weak matrix
 A balanced matrix
 Matrix Organization…

• Stronger organizations are closer to a project oriented organization and here

the project manager has most of the authority and has a full-time team.

• On the other hand, weak matrix organizations are closer to a functional

structure. In this case, the project manager has low authority, no budget
control, and often runs a part-time project team.

• Instead, balanced matrix organizations unifies the properties of both previous

types.

• Here, the project manager has a medium-low authority and a part-time team,
while the budget, is managed both directly by him and by the functional
manager.
 Project oriented Organization

Composite or Hybrid

An organization of this type considers every job as a project. Here,

the project manager has full authority to complete the project
successfully, has a full-time role, budget control, and a full time team
available.

A team-based organization is another name for a project oriented

organization.
 Virtual Organization
• This structure is also known as virtual society. Here, the central organization is
connected to external companies (such as vendors, customers, associates)
with a network connection that allows to achieve business growth and
profitability. This structure allows the organization to work as a unit.

• In a virtual structure, the organization maintains its core business, while the
rest of the process is outsourced. Sometimes, this type of organization is also
known as an empty organization.

• Here, the project manager has a low-moderate authority and mixed power
over the budget. The project team can be full or part-time depending on the
situation.
 Hybrid and PMO

Hybrid
•In a hybrid organization, a combination of the above-mentioned structure types
can be used.

•Responsibility, authority, and other factors are also mixed depending on the
structure.

PMO
•The PMO is also a mixed type of organizational structure, but here the project
manager has the highest authority, controls the budget, and has a team
completely at his disposal.
 Advantages of effective organizational structure

• An organizational structure is a framework that helps an organization effectively

manage its operations and achieve its goals with minimal effort.

• This structure defines the relationship between the various departments and
teams of the organization. Moreover, it helps organizations to delegate
authority, power, and responsibility.

• But the project organizational structure also defines how the employees relate

to their superiors or to the Project Manager; therefore, it becomes something
strategic for coordination and cooperation within the group members.

• The main advantage of having an effective organizational structure is the

reduction of friction and discussions among the employees since the roles,
responsibilities, and reporting structure are very clear.
 Advantages…
Having an appropriate organizational model can bring huge benefits to any
organization. Some of these advantages are:

Allowing an organization to grow.

Keeping attention on strategic goals, instead of having each department focused

and limited on its agenda.

Joining a group of people and directing them towards a common goal.

Allowing employees to improve their skills.

Making the decision-making process more efficient, smoother, and faster.

Facilitating employee specialization.

 Advantages…
• Allowing better control and use of resources.

• Enabling easier and better communication, which helps reducing

conflicts.

• Allowing employees to behave better.

• Helping employees to grow professionally, to make a career and

to simplify the inclusion of new colleagues.

• Helping identifying roles and responsibilities in a clear and precise

way.
 THANK YOU

For queries, Email: pardeep.e8925@cumail.in 31