1. Chapter 05 Project Organization
Project Management
Chapter 05
Project Organization
Lecturer: Seng Theara
Bachelor of Agricultural Management from Royal University of Agriculture (RUA)
Master for Business Administration from Panha Chiet University (PCU)

2. Chapter Objectives Project organization
Centralization and decentralization
Project authority

3. Project Organization
Organizational theorist has developed various way of dividing the organization into sub-units to improve efficiency and to decentralize authority, responsibility and accountability thru a process of departmentalization.
Functional organization
Divisional organization
Matrix organization

4. Project Organization (Cont’d)
Functional Organization
Is an organizational structure composed of all the departments (marketing, operation and finance) that an organization requires to produce its goods or services.
Is an organizational structure designed that groups similar or related occupational specialties together.

5. Project Organization (Cont’d)
Functional Organization

6. Project Organization (Cont’d)
Divisional Organization
Is one of structures in which a set of relative autonomous units, or divisions, are governed by a central corporate officer but where each operating divisions has its own functional specialist who provide products or services different from those of other divisions.
Allows corporate management to delegate authority for the strategic management of distinct business entities—division.

7. Project Organization (Cont’d)
Divisional Organization

8. Project Organization (Cont’d)
Matrix Organization
Is combined between the functional and divisional structures.
Individuals who has been working in a matrix organization become responsible to two managers:
The project manager
The functional area manager

9. Project Organization (Cont’d)
Matrix Organization

10. Centralization Centralization
Describes the degree to which decision making is centralized at a single point in the organization.
Means that not only strategy, policy and authority stay with the centre, or at top of the hierarchy, but also that the means and methods of decision making, coordinating and controlling also stay with senior management.

11. Centralization (Cont’d)
Advantages
They are good where there is a strong need for controlling and standardization because few people in the organization have authority or responsibility.
They are efficient models where is no need for changing and flexibility.
The organization can employ staff with lower skills because responsibility and decision making are not spread throughout the organization.

12. Centralization (Cont’d)
Disadvantages
Top managers have load works due to don’t delegate work for staff.
It has to spend many times for making decision and have inefficiency.
Projects or operations are most failure or ineffectiveness due to top managers don’t receive feedback or complaint from lower staff.
Centralized system of management don’t motivate lower levels of staff

13. Decentralization Decentralization
Describes when lower level employees provide input and actual make decision.
Means that while strategy and policy stay at the centre, many other functions of management are spread out in the lower levels of managers and staff.

14. Decentralization (Cont’d)
Advantages
More efficient and effective decision making because of top managers allow lower level staff have participated decision making.
Local management can respond to local conditions and demands.
It contributes to staff motivation and morale.
The organization tends to be more flexible in respond to change.
At all levels of employee gain continuously the capacity building for all condition.

15. Decentralization (Cont’d)
Disadvantages
There, can be a tendency for the local unit to pull away from the whole organization.
Without good management, communication and coordination the quality of monitoring and evaluation could be weak.

16. Project Authority Authority
Is essential to any group or project team effort.
Usually define as a legal or rightful power to command or act.
Project authority divided into:
De jure project authority is the legal or rightful power to command or act in the management of a project.
De facto project authority is that influence by a particular person’s knowledge, expertise, interpersonal skills.

17. Project Authority (cont’d)
Responsibility
Is duty obligated to do to achieve something.
A person who is responsible is expected to act without specific guidance or being told to do by a superior authority.

18. Project Authority (Cont’d)
Accountability
Is the state of assuming liability for something of value thru contract or because of one’s position of responsibility.
A professional is help accountable for excellence in the quality of service rendered to the organization.