Chapter 4
Organizing Projects
Types of Organizations
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Functional organization
Pure Project organization
Matrix organization
Mixed organization
Functional organization
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Functional organization organizations are
those that are subdivided into functional
units, i.e. marketing unit, finance unit, HR unit
etc.
For Functionally organization projects, the
project is assigned to the Functional unit that
has the most interest in ensuing its success
or can be most helpful in implementing it.
Advantages and disadvantages of
projects in Functional organization
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Advantages
1.
There is maximum flexibility in the use of staff.
Individuals 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
2.
3.
4.
5.
technological continuity when individual choose to leave the
project and even the parent firm.
The Functional division contains the normal path of
advancement for individuals whose expertise is in the
Functional area.
Disadvantages
1.
2.
3.
4.
5.
6.
7.
A primary disadvantage is this arrangement is that that the client is
not the focus of activity and concern.
The functional division tends to be oriented towards the activities
particularly to its function.
Occasionally in Functionally organized projects, no individual is
given full responsibility for the project.
The same reasons that lead to lack of coordinated efforts tends to
make response to client needs slow and arduous.
There is a tendency to sub optimize the project.
The motivation of the people assigned to the project tends to be
weak
Such an organizational arrangement does not facilitate holistic
approach. Cross-communication and sharing of knowledge is slow
and difficult to its best.
Pure Project Organization
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An organization in which the project is separated
from the rest of the parent system.
It becomes a self-contained unit with its own
technical staff, its administration, tied to the parent
firm by the tenuous strands of periodic progress
reports and oversight.
Some parent organizations prescribe administrative,
financial , personnel and control procedures in detail.
Others allow the project total freedom within the final
accountability.
Advantages and disadvantages of the
Pure Project Organization.
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Advantages
1.
The project manager has full line authority over the project
All members of the project work force are directly responsible
to the PM.
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 manipulate a more or less
permanent cadre of experts who develop considerable skill in
specific technologies.
The project team that has a strong and separate identity of its
own tends to develop a high level of commitment from its
members.
2.
3.
4.
5.
Cont…
6.
7.
8.
9.
Because authority is centralized, the ability to make swift
decisions is greatly enhanced. The entire project organization
can react more rapidly to the requirements of the client and
the needs of senior management.
Unity of command exists.
Pure project organization are structurally simple and flexible,
which makes them relatively easy to understand and to
implement.
The organizational structure tends to support a holistic
approach to the project.
Disadvantages
1.
2.
3.
4.
5.
6.
When the parent organization takes on several projects, it is
common for each on to be fully staffed.
In fact, the needs to ensure access to technical knowledge and
skills result in an attempt by the Pm to stockpile equipment and
technical assistance in order to certain that it will be available
when needed.
Though individuals Engaged with project develop considerable
depth in the technology of the project, they tend to fall behind in
other areas of their technical expertise
Pure project group seems to foster inconsistency in the way in
which policies and procedures are carried out.
In pure project organizations, the project takes on a life of its own.
Another symptoms of projectitis is the worry about life after the
project ends.
The Matrix Organization
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The matrix organization is the combination of the 2: it is pure project
organization overlaid on the functional divisions of the parent firm.
A matrix organization can take on a wide variety of specific forms,
depending on which of the 2 extremes ( functional or pure project).
The strong matrix resembles the pure project organization
The weak matrix resemble functional organization.
Balanced matrix lies in the middle of the 2 extremes.
The matrix is not separated from its parent organization
In matrix organization the Pm controls when and what the se people
will do, while functional managers control who will be assigned to the
project and what technology will be used.
ADVANTAGES OF MATRIX
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The project is the point of emphasis the PM, takes responsibility
for managing the project.
Because the project organization is overlaid on the functional
divisions, temporarily drawing labor and talent from them, the
project has reasonable access to the entire reservoir of
technology in all functional divisions.
There is less anxiety about what happens when the project is
completed than is typical of the pure project organization.
Response to clients needs is as rapid as in the pure project
case, and the matrix organization is just flexible.
With matrix management, the project will have- or have access
to – representatives from the administrative units of parent firm
Contd
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Where there are several projects simultaneously
under way, matrix organization allows a better
company wide balance of resources to achieve the
several different time/cost performance targets of
individual projects.
While pure project and functional organization
represents extreme of the organizational spectrum,
matrix organization cover a wide range in between
DISADVANTAGES OF MATRIX
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In the case of functionally organized projects, there is no doubt that the
functional division is the focus of decision- making power in the pure
project case, it is clear that the PM is the power center of the project.
With matrix organizations, the power is more balanced. Often, the
balance is fairly delicate.
While the ability to balance time, cost, and performance between
several projects is an advantage of matrix organization, the ability has
its dark side.
For strong matrices, problems associated with shutting down a project
are almost as severe as those in pure project organizations.
In matrix-organized projects, the PM controls administrative decisions
and the functional heads control technological decisions.
Matrix management violates the management principle of unity of
command.
MIXED ORGANIZATIONAL SYSTREMS
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Divisionalization is a means of dividing a large and monolithic
organization into smaller, more flexible units. This enables
parent organization to capture some of small, specialized
organizational units while retaining some of the advantages that
come with larger size.
Organizing projects by projects involves establishing each
product project as a relatively autonomous, integrated element
within the organization as a whole.
Pure functional and pure project organization may coexist in a
firm. This results in the mixed form
This form is rarely observed with the purity we have depicted
here, yet it is not uncommon. What is done, instead, is to spin
off the large successful long run projects as subsidiaries or
independent operations.
Contd
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Many firms nurture young, unstable, smaller
projects under the wing of an existing
division, then wean them to pure projects
with their own identity, and finally allow the
formation of a venture team- or, for a larger
project, venture firm- within the parent
company