Project Organisation

Structure

Functional Project Management

Structure
Functional organization
Different segments of the project are delegated to
respective functional units.
Coordination is maintained through normal management
channels.
No dedicated teams for project management
Used when the interest of one functional area dominates
the project or one functional area has a dominant interest in
the projects success.
Examples? (SCOPE to students who major in operations)
Construction of a new plant for a automobile company (which
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department is given the prime
responsibility for this project)

Functional Organization of Projects

Advantages

Disadvantages

1. Lack of focus (which gets the

priority, functional work or
project work)

1. No structural change
2. Flexibility

2. Poor integration (Since there is no

team as such, no authority for
the project head over resources)

3. In-depth expertise (provided

the scope of the project is
narrow)

3. Slow (why?, poor communication

and poor integration, in the
hindsight)

4. Easy post-project transition

4. Lack of ownership (who is

assigned the accountability?)
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Projectised structure for Projects

Teams operate as separate units under the leadership of a fulltime project manager.
In a projectized organization where projects are the
dominant form of business, functional departments are
responsible for providing support for its teams.
National Highway Authority of India
L&T ECC
Rail Vikas Nigam Limited

Any company which is in the construction phase

Example Dedicated Freight Corridor Corporation of India Limited (DFCCIL)

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Projectised structure for Projects

Advantages
1. Simple

Disadvantages

2. Fast

1. Expensive

3. Cohesive

2. Internal Strife

4. Cross-Functional
Integration

3. Limited Technological
Expertise
4. Difficult Post-Project
Transition

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Matrix Project Management

Structure

Composite of functional structure and Projectised structure

Two chains of command (functional and project)
Project participants report simultaneously to both functional and
project managers.

Matrix structure optimizes the use of resources.

Allows for participation on projects while performing normal functional
duties.
Achieves a greater integration of expertise and project requirements.

May be suitable for short period of time

Employees are considered as shared resources

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Different Matrix Forms

Weak Form
The authority of the functional manager predominates and the project
manager has indirect authority.
Autonomy to a least degree for the project department

Balanced Form
The project manager sets the overall plan and the functional manager
determines how work to be done.
Autonomy to a certain degree to take decisions for the functional departments

Strong Form
The project manager has broader control and functional departments act as
subcontractors to the project.
Autonomy to a lesser degree for the functional departments

Can weak form and strong form coexist?

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Project Organization: Matrix Form

Advantages
1. Efficient Best use of
resources

Disadvantages

2. Strong Project Focus

1. Dysfunctional Conflict

3. Easier Post-Project
Transition

2. Infighting
3. Stressful

4. Flexible

4. Slow

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What Is the Right Project Management Structure?

Organization (Form) Considerations
How important is the project to the firms success?
What percentage of core work involves projects?
What level of resources (human and physical) are available?

Project Considerations
Size of project
Strategic importance
Novelty and need for innovation
Need for integration (number of departments involved)
Environmental complexity (number of external interfaces)
Budget and time constraints
Stability of resource requirements
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Impact of organizational culture on project management

Organizational Culture
A system of shared norms, beliefs, values, and assumptions which
bind people together, thereby creating shared meanings.
The personality of the organization that sets it apart from other
organizations.
Provides a sense of identify to its members.
Clarifies and reinforces standards of behavior.

There is a strong relationship between organizational culture,

project management structure and success of the project
Paddling downstream when?
Paddling upstream when?
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