Organizational Structure
Focus
1. What are the types of project structure
2. How do we select the correct structure
3. Assignment is to review how projects have been structured.
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Project Management Structures
Organizing Projects within Functional Organizations
 Coordination is maintained through normal Management Channels
 Commonly used when one area plays a dominant role in completing the project or has a
dominant interest in the success of the project.
 Typically the project is led by a high level manager in the functional area
 Advantages
o No change
o Flexibility
o In-depth expertise
o Easy post-project transition
 Disadvantage
o Lack of focus
 Usually combined with more routine tasks
 Not a personal goal
o Poor integration
 Integration with outside areas is complicated
 Usually have to work through other department managers
o Slow
 Typically a back burner item
 Coordination with outside areas is slow
o Lack of ownership
 Again, this is not a priority
 Everyone is just doing what someone asks.
Organizing Projects as Dedicated teams
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Operate as a separate unit many time located outside the functional areas
Project is sole focus
Project manager is trained in projects
Some companies are project oriented, so entire structure is created to support projects
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Organizational Structure
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Commonly found in projects that are:
o Highly complex
o Critical to company future
Advantages
o Simple
o Fast
o Cohesive
o Cross-functional integration
Disadvantages
o Expensive
o Internal strife
o Limited technological expertise
o Difficulty post-project transition
Matrix Arrangement
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A horizontal project management structure is overlaid on the normal functional
hierarchy
Project participants report simultaneously to both functional and project managers.
Designed to optimally utilize resources by having individuals work on multiple projects
as well as being capable of performing normal functional duties.
Types of matrix forms
o Balanced
o Weak
o Strong
The different types depend upon the power between the functional and the project
managers
o Conducting performance appraisals and compensation
Weak Matrix
o More of a functional structure
o Functional manager makes the project decisions
o The project manager does the administrative tasks
Strong Matrix
o More of a dedicated structure
o Project manager makes decisions
o Functional manager assists in the basic skills training and provides talent
Balanced matrix
o is somewhere in-between
o responsibilities are negotiated
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Organizational Structure
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Advantages
o Efficient
o Strong project focus
o Easier post- project transition
o Flexibility
Disadvantages
o Dysfunctional conflict
o Infighting
o Stressful
o Slow
Network Organization
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The core company provides several competencies but the remaining competencies
required for the project are done by outside agencies or companies
There is a recognition that a company should do what is does best and leave the rest to
those who do it better.
Advantages
o Cost reduction
o High level of expertise
o Flexibility
Disadvantage
o Coordination breakdown
o Loss of control
o Conflict
How to choose the right structure
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The importance of the project
o % of core work involves projects
o If more than 75% is projects then use a dedicated project
o If 50-50 then a matrix
o Few projects then functional
Resources available
o Talent
 If sparse then use functional or network
o Capital
 Same if low capital
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Organizational Structure
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o Time
Size of project
o Time to be devoted
Novelty and need for innovation
Need for integration
o Multi functional or single function
Environmental complexity
o Number of external interfaces
Stability of resource requirements
Does the Culture of the Organization play a role in which structure to use?
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Ten primary characteristics
1. Member identity
 Identify to the organization vs their job/field
2. Team emphasis
3. Management Focus
 Does management consider talent thoughts on decisions
4. Unit Integration
 Degree of coordination vs individual manner
5. Control
 How much supervision and control on employee behavior
6. Risk Tolerance
 Risk takers or not
7. Reward Criteria
 Performance or seniority
8. Conflict Tolerance
 Encourage to air conflicts
9. Means vs end orientation
 Outcomes vs techniques and process to achieve end
10. Open system flow
 Ability to see need for changes by external forces
Identifying cultural characteristics
1. Study the physical characteristics of an organization
2. Read about the organization
3. Observe how people interact within the organization
4. Interpret stories and folklore surrounding the organization.
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Class 2
Organizational Structure
Assignment
Teams of 4-5
Google the term: Project Management RFP
Select a project
 Describe the project
 Which organizational structure do you think would be best
 Why did you make that choice
o Use the pros/cons above to frame your answer
 How would you divide this project into phases
o What would be the deliverables for each phase?
Read Chapter 2 in Text book Managing a project
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