Chapter # 3 Project & Organizational Structure

ORGANIZATIONAL STRUCTURE Three Basic Organization Structure Functional Structure Project Structure Matrix Structure

FUNCTIONAL ORGANIZATIONAL STRUCTURE Functional organization structure in which authority rests with the functional heads; the structure is sectioned by departmental groups.  Most Common & Traditional Activities are assigned based on expertise  

FUNCTIONAL ORGANIZATIONAL STRUCTURE C.E.O VP Finance VP Marketing VP Manufacturing VP Personnel

FUNCTIONAL ORGANIZATIONAL STRUCTURE

FUNCTIONAL ORGANIZATIONAL STRUCTURE Project Coordination Red boxes represent staff engaged in project activities

FUNCTIONAL ORGANIZATIONAL STRUCTURE Advantages Simple Lines of communication within department are well established Clearly defined responsibility and authority for work within the departments

FUNCTIONAL ORGANIZATIONAL STRUCTURE Disadvantages Complete Responsibility for the entire project missing because the functional units are responsible for the their own activities. Competition & conflict between functional departments Department work may take priority over project work

PROJECT ORGANIZATION STRUCTURE Suitable to projects that are very large & complex and/or geographically located away from the parent organization.

PROJECT ORGANIZATION STRUCTURE

PROJECT ORGANIZATION STRUCTURE Advantages The project manager has full line authority over the project Because the authority is centralized, the ability to make a swift decision is enhanced Accountability is clearly placed in one person

PROJECT ORGANIZATION STRUCTURE Disadvantages Uncertainty about job after the project Difficult to share individuals/expertise across projects

MATRIX ORGANIZATION STRUCTURE An organization structure that assigns specialists from different functional departments to work on one or more projects being led by project managers.

MATRIX ORGANIZATION STRUCTURE Advantages Authority and responsibility are shared Stress is distributed among the team

MATRIX ORGANIZATION STRUCTURE Disadvantages PM controls administrative decisions. functional managers control who will be assigned to the project, This thing may create conflict.

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