Chapter 13 Types of Project Organizations

222 Learning Objectives The characteristics of the three types of organization structures: - functional - project - matrix The advantages and disadvantages of each

Real World Example Vignette: A Survey by Technical Pathways Results suggest the following project-oriented corporate policies: –Establish meaningful organizational objectives –Include project responsibilities in job descriptions –Use team-based performance reviews –Establish career paths –Organize programs into projects and subprojects –Prioritize using project inventories –Optimize personnel resources –Coordinate inter-group transitions

Real World Example Vignette: Office Politics Organizational politics often play a major role in determining the outcome of a project. People from different departments within an organization often work, think, and react very differently. Unfortunately in many corporate systems there is often a focus on finding someone or some department to blame. Putting personal or departmental interests ahead of corporate goals doesn’t work. Projects go smoothly when everyone knows the goal and their part in attaining it.

333 Functional-Type 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.

44 Project-Type Organization 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.

55 Matrix-Type 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.

66 Matrix-Type 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.

7 Functional Organization Advantages Reduces duplication and overlap of activities. Provides specialization and functional excellence.

8 Functional Organization Disadvantages Can be insular. Teamwork is not emphasized. Decisions may be parochial. Structure can slow communication, problem solving and decision making. Lack of customer focus. Stronger allegiance to function than project.

9 Project Organization Advantages Team has full control over resources. Organization is highly responsive to customer.

10 Project Organization Disadvantages Can be cost inefficient. Tendency to stretch out work during slow periods. Potential for duplication on concurrent projects. Low level of knowledge transfer. No functional “home”. People may be laid off at the end of the project.

11 Matrix Organization Advantages Allows efficient utilization of resources. Individuals can be moved among projects. Provides a core of functional expertise. Facilitates information flow. Team members can communicate with project and functional managers. Customer focused.

12 Matrix Organization Disadvantages Team members have a dual reporting relationship. A proper balance of power must be established between project and functional managers. Conflicts regarding priorities can arise between managers.