Chapter 3: Project Organization

Project Management
Summer 2014/2015

Dr. Nouh Alhindawi

Department of Software Engineering
Jordan University of Science and
Technology

Organization Designs
Organization is a social entity that has a collective goal and is
linked to an external environment.
The purpose of an organization to coordinate the efforts of many
to accomplish goals.
There are a number of options, functional (pyramid of hierarchy),
project, and matrix organization
Project Managers need to understand relative advantages and
disadvantages of each

Organization Structure
Represents the management hierarchy:
Reporting relationships who report to whom
The official chain of control or authority, which deals of
official activities, such firing, hiring, and promotion.

Organization can be grouped into major subdivisions

on the basis of a number of frameworks.
Responsibilities & type of work for each subdivision
Official lines of authority & communication
Informal organization also important and can exist in parallel to
the official organization, communication of the informal is
socially motivated.

Alternative Structures
There are a number of options
Best depends on goals, type of work it
supposed to do, and the environment within
which it operates.
Forms of organization structures are:

Functional organization
Project organization
Matrix organization

Functional Organization
This type relies on formal rules, procedures, coordinated plans,
budgets, fairly common, segmented by department and their
functions.
H ie r o n y m u s B o t c h
CEO
B e a n K o u n te r
A c c o u n t in g

S ila s M a r n e r
F in a n c e

S n id e ly W h ip la s h
M a r k e t in g
A t la n t a

John D oe
P r o d u c t io n
P h o e n ix

S ie g fr ie d H ill
M IS
B u tte

works well in repetitive, stable environments

Functional org
A functional organization is the most common type of the three.
It works best in small organizations in which the different sections are
geographically close together and which provide only a small number of
goods and/or services.
In a functional structure, the organization is broken into different sections
based upon specialty. For example, there may be one area for sales, one for
customer service and one for the supervisors who deal with escalated
problems.
The project manager's role is to ensure smooth execution of processes
and projects; however, the functional manager has the most power and
makes the final decisions.

Types of Functional org

Geographic Differentiation
Product Differentiation
Customer Differentiation
Process Differentiation

Advantages of Functional Organization

An advantage to the functional structure is the role of
the functional manager, which means there is only
one boss. This reduces or prevents conflicts of
interest and makes it easier to manage specialists:

Clear line of authority

Career development
Comfortable and easy
Technical expertise
Flexible resource assignment

Disadvantages of functional org.

A disadvantage of this type of structure is that the project
manager has limited authority and a limited career path.

No accountability over complete project

No project emphasis
Low coordination across function
No customer focal point
Low delegation of authority
Work delays due to red tape
Heavy politics
Lack of a big picture view

Projectized Organization
Projectized organization is a project focused organizational structure
where project manager has the final authority over the project to
make project decisions, priorities, acquire and assign resources.
A projectized organization refers specifically to an organizational
structure that has been set up in a manner in which the project
manager leads the group and in which the project manager has the
ultimate authority to make any and all decisions involving
the organization.
In a projectized structure, all the work is looked at as a project. The
project manager has complete control, unlike in the functional
structure, and all team members report directly to the project
manager.

Projectized Organization
Sometimes these team members are permanent, and sometimes
they are hired as temporary workers to help with the project until
its completion. If the organization takes on a large project, it will
have all the necessary resources available to sustain the project and
will act as a small, self-contained company.

The project manager works with complete autonomy (central

authority, power) over the project, team is on the project full time
and report to the project manager.

As a project manager, you have the responsibility to take authority,

rather than waiting for someone to give you the authority.

Project Organizations
(advantages and disadvantages)

Advantages to the projectized structure include the project manager's

opportunity for career progression. In addition, because good
communication exists within the project work, the team members
tend to be more committed to, and excel in, their responsibilities.
The disadvantage of a projectized structure is that, because the team
breaks up and disperses after the completion of the project, there are
no long-term goals or sense of job security for the rest of the workers.
Another disadvantage is that the organization has to essentially clone
the same resources for each project (project manager, work area,
administrator).

Comparison between
organizations types
There are several differences between projectized and other types of
organizations:
- In projectized organizations, the Project Manager has all the authority he
wants, as opposed to matrix and functional organizations, where the Project
Manager has no or little authority.
-

The Project Manager owns the resources, as opposed to matrix and

functional organizations where he borrows the resources.

Resources are only allocated to projects in projectized organizations.

In other types of organizations, resources report to their functional
managers and usually do routine, non-project work.

More Advantages of Project

organization
The main advantage of having a projectized
organization is that decisions are made much
faster due to shorter communication paths.
Additionally, project managers have real
authority and the team is more loyal, more
dedicated, and is not disturbed by the problem
of "multiple managers"

Project Organizations
PURE PROJECT organization involve creating a separate
independent organization specifically for accomplishing a particular
goal.
The pure project organization is characterized by the usually great
importance, the large scope, the large uncertainty, the high time
pressure, the long duration and the high complexity of the project
TYPES:
- Project Center
- Stand-Alone Project
- Partial Project

Project Center

- Is linked to parent organization to draw resources

& personnel as needed
EXAMPLES:
General Motors task force to develop suggestions for
downsizing
Relocation operations

Stand-Alone Project

- Newly created organization for this mission drawn

from several organizations
EXAMPLES:
Large-scale public works
NASA space station development
Construction joint-ventures

Partial Project

- Project manager responsible for some activities

other activities (support-oriented such as accounting)
remain with functional divisions.
This is a common.

Pure Project Disadvantages

- Cost in personnel (facility duplication)
- Lose training investment
- Team members do not feel secure
- Inefficiency, no place else to use key
people
- High risks in early project phases.

Matrix Organization
-

It is used mainly in the management of large projects or product

development processes, drawing employees from different functional
disciplines for assignment to a team without removing them from their
respective positions.

Matrix management is a type of organizational management in which people with

similar skills are pooled for work assignments.

The matrix structure combines both the functional and projectized structures. Each
team member has two bosses; they report both to the functional manager and the
project manager.
- If the matrix is strong, the power resides more with the project manager.
- If the matrix is weak, the power resides more with the functional manager.
- The key is to find a balance in which the power is shared equally.

Because of its complexity, this type of structure can lead to problems if it is not
used carefully and properly. Good communication is essential for success .

Matrix organization

Matrix organization

Advantages of Matrix Structure

Advantage to the matrix structure lies in the efficient use of resources because of ease of access.
This structure also demonstrates efficient communication both vertically and horizontally.
Because of this, once the projects have ended, the team members are likely to receive a job
elsewhere in the organization.
The advantages of a matrix include:
- Individuals can be chosen according to the needs of the project.
- The use of a project team which is dynamic and able to view problems in
different way as specialists have been brought together in a new environment.
- Project managers are directly responsible for completing the project within specific
deadline and budget.
- Required resources can be managed moving into and out of the project team
- Project cost is lessened because resources are used as needed
- There are an appropriate focus on the project objectives through a single PM
- The overall enterprise utilization of resources is better handled in the mode

Disadvantages of Matrix
A disadvantage of the matrix structure is complexity, which can be
difficult to manage.
For example, if the functional manager and the project manager do not
communicate well, the team members can be caught in the middle,
causing confusion.
The disadvantages include:
- A conflict of loyalty between line managers and project
managers over the allocation of resources.
- Projects can be difficult to monitor if teams have a lot of
independence.
- Costs can be increased if more managers (ie project mangers)
are created through the use of project teams.

Matrix Problems
Unclear lines of authority, Two bosses, dual
reporting
No Man Can Serve Two Masters!
military principle of UNITY OF COMMAND
chaos, confusion more common
often project manager tells you what to do, but your
raise comes from functional manager
Success highly depends on individuals

Matrix Capabilities
Functional part provides repository for technical
expertise and physical resources
When in functional home, workers keep up
professionally (train)
Functional homes a place to go when project over
(no new job search)

Hybrid Organization
"Hybrid organizations" are those that combine the three elements
of people, workplace and technology in equal measure. A
successful organization would be one that empowered its people
to work in the way they would be most productive, allowing them
to be measured by outputs empowered through innovative and
flexible workplace design and a range of technologies and tools
that help them do their jobs more effectively.
"The Hybrid Organization" is a business concept created by
Microsoft in 2010. Working with experts from the fields of social
change, workplace design, economics, technology and public
sector development. Microsoft identified several characteristics of
businesses and organizations that are best placed to thrive in
uncertain times.

Hybrid Forms
Firms combine matrix, functional, project features,
custom design their own organization.
COST CONTROL: Project matrix best, functional worst
SCHEDULE: project best, functional worst
TECHNICAL: functional worst

Know when its time to leave

You have no choice about team member
Your sponsor insist that people multitask and
wont take no for answer.
You are supposed to contribute technically to
the project
All your project starts with insufficient
resources
You hear that youre not a team player all the
time

When you are not right for the project

You do not know enough to manage this
project
Your manager inflict (impose) help on the
team and you can not push back
You know too much to mange this project

Cellular organization: small work groups with people skilled

in each required task were organized together.

Liaisons:

are used to integrate two groups not part of the same

organization, useful between the people who fund the project and the
project team.

Task forces: Temporary grouping of individuals to solve a

particular problem.

Expediters (coordinators): are individuals whose jobs is to

make sure that something happens, no authority but they inform the
project manager of the need for additional resources. Pushes for
speedy completion of work.

Summary
organization structure is means to
achieve goals & respond to problems
differentiation
project organizations more flexible
need to know criteria for appropriate
project organization structure