Project Organization

Topics: Project management, Organization, Management Pages: 27 (1416 words) Published: April 18, 2015
Project Management
A Managerial Approach

Chapter 4
Project Organization

Growth of Project Oriented
Organizations
 There are many reasons for the rapid
growth, but most of them can be
grouped in four general areas:
 Time
 Diversified knowledge
 Rapid expansion of technological
possibilities.
 Senior managers rarely feel much
confidence

Chapter 4-1

Growth of Project Oriented
Organizations
 There are many reasons for the rapid
growth, but most of them can be
grouped in four general areas:
 Speed and market responsiveness have
become
absolute
requirements
for
successful competition
 The
development
of
new
products,
processes, or services regularly requires
input from diverse areas of specialized
knowledge
Chapter 4-1

Growth of Project Oriented
Organizations
 Four reasons for growth (cont.)
 Rapid
expansion
of
technological
possibilities in almost every area of
enterprise tends to destabilize the
structure of organizations
 A majority of senior managers rarely feel
much confidence in their understanding
and control of the activities in their areas
Chapter 4-2

Types of Project Organizations
 There are two fundamentally different ways
of organizing projects within the parent
organization
 The project as part of the Functional
Organization
 The project as a free-standing part of the parent
organization

 A third type, called a Matrix Organization is
a hybrid of the two main types
 Each has advantages and disadvantages
Chapter 4-3

The Project as Part of the Functional Organization

The Project as Part of the
Functional Organization

Advantages

Disadvantages

Maximum flexibility

Client is not the focus

Stimulates sharing of knowledge &
experience

Limited to the functional
area

Place of Continuity

Unclear responsibility

Path for career advancement

Time Consuming
Slow decision making
Tendency to sub optimize
Chapter 4-4

The Project as Part of the
Functional Organization
 Advantages of using the functional elements of the
parent organization as the administrative home for a
project include:
 Maximum flexibility in the use of staff. Individual experts can be utilized by many different projects
 Specialists in the division can be grouped to share
knowledge and experience
 The functional division also serves as a base of
technological continuity when individuals choose to leave
the project
 The functional division contains the normal path of
advancement for individuals whose expertise is in the
functional area
Chapter 4-4

The Project as Part of the
Functional Organization
 There are also disadvantages to housing the
project in a functional area:
 The client is not the focus of activity and concern
 The functional division tends to be oriented toward
the activities particular to its function
 Occasionally, no individual is given full
responsibility for the project
 There are often several layers of management
between the project and the client. That’s why it is
time consuming
 There is a tendency to suboptimize the project
Chapter 4-5

Pure Project Organization

Pure Project Organization
Advantages

Disadvantages

Full Line Authority
Shortened Line of
Communication
Cadre of experts
Higher Commitment
Swift Decision
Unity of Command
Simple & flexible
Structure

Duplication of effort
Negative Tendency of PM
Lacking of Expertise
Knowledge
Potential threat
Uncertainty about future

Chapter 4-6

Pure Project Organization
 Advantages of a pure project organization:
 The project manager has full line authority over the
project. All members of the project work force are
directly responsible to the project manager
 When the project is removed from the functional
division, the lines of communication are shortened
 When there are several successive projects of a
similar kind, the pure project organization can
maintain a permanent...
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