Project Management
“Project Organization”
Lecture 6
Resource Person: M. Adeel Anjum
Project Organization
• A Firm if to be successful, tends to grow by adding
resources & people and develop its organizational
structure. And the major focus of structure is the
specialization of human elements.
• The popular structure arrangements are, by Product
Line, By Geographic Location, By Production Process, By
type of Customers and by type of virtual elements etc.
• The same concept is applied on the Projects, Projects
can have many Structural Arrangements & these are
called “Project Organization”. Most common Project
structures are;
– Functional Organization
– Pure Project Organization
– Matrix Organization
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Functional Organization
• This project organizational form consists of
many Functional Areas / Elements or Divisions.
E.g: Administration, Finance, MIS, HR,
Marketing Etc.
• The Project is carried out by utilizing human
elements of these functional areas.
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Functional Organization
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Advantages of Functional Organizational Form
• Maximum flexibility in the use of staff. experts can
be temporarily assigned to the project, make their
required contributions & immediately be
reassigned to their normal duties.
• Individual experts can be utilized by many
different projects.
• Specialists can be grouped to share knowledge &
experience.
• Functional division also serves as a base of
technological continuity.
• Functional Division contains normal path of
advancement for individuals.
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Disadvantages…….
• Client is not the focus of the activity & concern.
• Functional Division tends to be oriented toward the
activities particular to its function.
• In this form no individual is given full authority.
• Lack of coordinated efforts.
• Tendency to sub-optimize the project.
• Motivation of people assigned to the project is tend
to be weak.
• This organizational arrangement does not facilitate
holistic approach to the project.
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Pure Project Organization
• The project is separated form the parent system.
• Project becomes a self contained unit with its own
technical administration, tied to the parent firm by
tenuous strands of periodic progress reports etc.
• Full autonomy under oversight of parent
organization.
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Pure Project Organization
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Advantages
• Project Manager has full authority over the project.
• All members of project’s work force are directly
responsible to PM.
• Shortened line of communication.
• Motivation of workforce is high.
• Centralized authority & swift decision making.
• Unity of Command.
• Pure Project structure is simple & flexible.
• It supports holistic approach.
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Disadvantages
•
•
•
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Duplication of efforts (Dual Functional Efforts)
Costs
Technical Implications
It fosters inconsistencies in the way the policies
and procedures are carried out.
• Projectitis.
• Anxiety.
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The Matrix Organization
• Matrix organizational structure is the combination
of “Functional & Pure Project” organizational
forms.
• It combines the advantages & disadvantages of
both.
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Matrix Organization
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Choosing the Organizational Form
• Experienced practitioners find it difficult to explain
how one should choose organizational structure for
Projects.
• Choice is usually determined by situation
• Anyhow, few accepted principles to select project
design are;
– Nature of the potential project
– Various organizational options (advantages &
disadvantages of each)
– Cultural preferences of parent organization
E.g:
In-depth application of technology requires
functional form.
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• If the firm is engaged in large number of similar
projects (Construction), the pure project form is
preferred.
• When the project requires the integration of inputs
from several functional areas & involves
sophisticated technologies, matrix organizational
is preferred.
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