Chapter 13
Types of Project Organizations
Learning Objectives
• The characteristics of the three types of
organization structures:
- functional
- project
- matrix
• The advantages and disadvantages of each
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Real World Example
• Vignette: A Survey by Technical Pathways
• Results suggest the following project-oriented corporate
policies:
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Establish meaningful organizational objectives
Include project responsibilities in job descriptions
Use team-based performance reviews
Establish career paths
Organize programs into projects and subprojects
Prioritize using project inventories
Optimize personnel resources
Coordinate inter-group transitions
Real World Example
• Vignette: Office Politics
• Organizational politics often play a major role in
determining the outcome of a project.
• People from different departments within an organization
often work, think, and react very differently.
• Unfortunately in many corporate systems there is often a
focus on finding someone or some department to blame.
• Putting personal or departmental interests ahead of
corporate goals doesn’t work.
• Projects go smoothly when everyone knows the goal and
their part in attaining it.
Functional-Type Organization
• Used in businesses that sell and produce standard
products.
• Groups consist of individuals performing the same
function.
• Periodically undertake in-house projects.
• Team members can be assigned to the project.
• Team members continue regular functional jobs.
• Project manager does not have complete authority
over team.
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Project-Type Organization
• Used in companies in the project business, not
selling products.
• Work on multiple projects at a time.
• Project team is dedicated to one project.
• Project manager has complete authority over team.
• Each project team tends to be isolated.
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Matrix-Type Organization
• A mix of functional and project organization
structures.
• Used in companies that work on multiple projects
at a time.
• Provides project and customer focus.
• Retains functional expertise.
• Individuals can be assigned to various types of
projects.
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Matrix-Type Organization (Cont.)
• Both project managers and functional managers
have responsibilities.
• The Project Manager is the intermediary between
customer and company.
• The Functional Manager decides how tasks will
be accomplished.
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Functional Organization
Advantages
• Reduces duplication and overlap of activities.
• Provides specialization and functional excellence.
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Functional Organization
Disadvantages
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Can be insular.
Teamwork is not emphasized.
Decisions may be parochial.
Structure can slow communication, problem
solving and decision making.
• Lack of customer focus.
• Stronger allegiance to function than project.
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Project Organization Advantages
• Team has full control over resources.
• Organization is highly responsive to customer.
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Project Organization
Disadvantages
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Can be cost inefficient.
Tendency to stretch out work during slow periods.
Potential for duplication on concurrent projects.
Low level of knowledge transfer.
No functional “home”.
People may be laid off at the end of the project.
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Matrix Organization Advantages
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Allows efficient utilization of resources.
Individuals can be moved among projects.
Provides a core of functional expertise.
Facilitates information flow.
Team members can communicate with project and
functional managers.
• Customer focused.
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Matrix Organization
Disadvantages
• Team members have a dual reporting relationship.
• A proper balance of power must be established
between project and functional managers.
• Conflicts regarding priorities can arise between
managers.
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