INTRODUCTION TO PROJECT

ORGANISATION
FORMS OF PROJECT ORGANISATION
Businesses need structure in order to function and grow. Without structure, there’s very
little clarity and focus; nobody knows whom to report to and responsibilities are.
Organizations can structure themselves in many different ways based on
specialization , departments and decision making.
There are 4 major forms of organizational structure.
 Functional
 Divisional
 Matrix
 International
FUNCTIONAL AND DIVISIONAL STRUCTURE.
Functional :An organization can be arranged according to a variety of structures,
which determine how the organization will operate and perform. In a functional
structure, a common configuration, an organization is divided in.to smaller groups by
areas of specialty.
Divisional: Divisional structures group various organizational functions into product or
regional divisions.
MATRIX STRUCTURE.
Matrix Structure : The matrix structure is a type of organizational structure in which
individuals are grouped via two operational frames.
Matrix structures are inherently complex and versatile, making them more
appropriate for large companies operating across different industries or geographic
regions.
A disadvantage of the matrix structure is the increased complexity in the chain of
command, which can lead to a higher manager-to-worker ratio and contribute to
conflicting loyalties among employees.
INTERNATIONAL STRUCTURE
As the foreign operations of a company grow, businesses often realize the overseas
growth opportunities and an independent international division is created which
handles all of a company’s international operations
LINE ORGANISATION
Each department is a complete self
contained unit.
A separate person will look after the
activities of the department and he has full
control over the department.
Under this the line organisation, authority
flows from top to bottom vertically.
ADVANTAGES DISADVANTAGES
Clear cut relationship. Difficulty in staffing.
Unity of command. Concentration of authority.
Simplicity. Lack of specialization.
Prompt decision making. Instability.
Effective coordination. Poor motivation.
Fixed responsibility. Ineffective communication.
Discipline. Not useful for larger enterprises.
Greater productivity
STAFF ORGANISATION

Various specialists are selected for

various functions performed in an
organization.
workers receive instruction from
various specialists, who are working
at a supervision level.
ADVANTAGES
Specialization.
Growth and Expansion.
Lesser burden on line executives.
Better decisions.
Training of Line executives.
Advancement of Research.
DISADVANTAGES
Different orientation.
Conflict Between line and staff.
Lack of responsibility.
Lack of co-ordination.
Excessive reliance on staff.
Costly Structure.
FUNCTIONAL ORGANIZATIONAL STRUCTURE
A functional organization structure is a hierarchical organization structure wherein
people are grouped as per their area of specialization. These people are supervised
by a functional manager with expertise in the same field. This expertise helps him
effectively utilize the skills of employees, which ultimately helps organizations in
achieving its business objectives.
In this kind of organization structure, people are classified according to the function
they perform within the organization. The organizational chart for a functional
organization structure shows the president, vice president, finance department, sales
department, customer service, administration, etc.
 ADVANTAGES OF THE FUNCTIONAL ORGANIZATION
STRUCTURE
• Employees are grouped by their knowledge and skills, which helps achieve the highest
degree of performance.
• Employees are very skilled. Efficiency is gained because they are experienced in the same
work and they perform very well.
• Their roles and responsibilities are fixed, which facilitates easy accountability for the work.
• The hierarchy is very clear and employees don’t have to report to multiple supervisors.
Each employee reports to his or her functional manager, which reduces the number of
communication channels.
• There is no duplication of work because each department and each employee has a fixed
job responsibility.
• Cooperation and communication are excellent within the department.
DISADVANTAGES OF THE FUNCTIONAL ORGANIZATION
STRUCTURE
• Employees may feel bored due to the monotonous, repetitive type of work and may lose
enthusiasm for the job.
• If the performance appraisal system is not managed properly, conflicts may arise. For
example, an employee may feel demoralized when a lower performing employee is
promoted.
• A highly-skilled employee costs more.
• The departments have a self-centered mentality. The functional manager pays more attention
to his department; he usually doesn’t care about other departments.
• Communication is poor among the departments, which causes poor inter-department
coordination.
• Employees may have little concern and/or knowledge about events outside their
department.
MATRIX ORGANISATIONAL STRUCTURE
Matrix Organisation is a combination of two or more organisation structures.
• Weak Matrix Organization
Power enjoyed by the functional manager completely.

• Balance Matrix Organization

Power enjoyed by the functional as well as project manager in the same manner.

• Strong Matrix Organization

Power is enjoyed by the project manager Low bit more than the functional
manager.
 ADVANTAGES OF MATRIX STRUCTURE
• Increased flow of information
• Development of Skills
• Specialisation :
In a matrix organisation, there is a specialization. The functional managers
concentrate on the technical matters while the Project Manager concentrates on the
administrative matters of the project.
DISADVANTAGES OF MATRIX STRUCTURE
Complexity:
Dual accountability can make reporting relationships confusing, particularly in
the first stages of implementation.
Higher overhead costs:
Since matrix structures require roughly twice the number of managers, they
require organizations to shoulder twice the management costs.
Increase in work load:
Employees may become confused regarding their roles and responsibilities,
especially when they are assigned to a task which is somewhat different than
what they were doing.
THANK YOU