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Project Management Organization Structures

• Organization of project teams and their leadership structures differ according to certain characteristics of projects. – Some of the important differences are:

• who the project leader is,

• who has certain responsibilities and

• who makes the decisions.

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Project Management Organization Structures

• Three main types organization structures used in projects:– Functional project organization

– Pure project organization

– Matrix project organization

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Functional Project Organization

General Manager

Functional Manager

Functional Manager

Functional Manager

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Project Coordination

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Functional Project Organization

Key Characteristics– Project teams formed within the functional units.

– Nobody responsible for the entire project.

– Leadership occurs within functional units (expertise centers).

• Leadership belongs to technical experts.

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Functional Project Organization

• Characteristics of projects suitable for this organization structure:– Solution of technical problems is important.

– Integration of different functional units’ work is not necessary.

– Stable environment.

– Success depends on application of narrow technical know-how.

– Usually one functional unit is dominant (due to technical reasons).

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Pure Project Organization

• Characteristics– Project requiring major changes.

– Hence, a small, self-sufficient and full-time team is set up.

– The team leader is like an entrepreneur.

– Leader has full responsibility over the project.

– Functional units are stable, provide support to project teams.

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Pure Project Organization

General Manager

Project Manager

Project Manager

Worker

Worker

Worker

Worker

Worker

Worker

Marketing

Finance

Human Resources

Project Coordination

Legal

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Pure Project Organization

• Projectitis– a strong divisiveness occurs between the project team

and the parent organization.

– Project team members have difficulty in going back to their functional units when the project is over.

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Matrix Project Organization

• A hybrid form that combines both some characteristics of functional and pure project organization forms.

• Project manager and functional managers share responsibility.– Project manager decides what tasks will be done, and when they

will be done.

– Functional manager decides who will work in the project and which technologies will be used.

– Members of the project team have two “bosses” that they report to.

• Team members could be working on multiple projects.

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Matrix Project Organization

• Characteristics of projects suitable for this organization structure :– Integration of work done by different functional units is

very important.

– Changes (instability) both inside and outside the company.

– Success does not depend on application of a narrow expertise.

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Matrix Project Organization

• Matrix structures differ according to the “weight” of the project manager (relative to functional managers) : (1) “Lightweight”

(2) “Middleweight” - the traditional one

(3) “Heavyweight”

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Lightweight Matrix Project Organization

General Manager

Functional Manager

Functional Manager

Functional Manager

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Project coordination

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Lightweight Matrix Project Organization

• In lightweight structures ... – Representatives from each functional unit

• perform coordination and support.

– Functional managers have real power. • They provide functional input.

– Project coordinator • Is responsible for the coordination/intergration of inputs from

different functional units.

• Does not have direct authority over the workers.

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Heavyweight Matrix Project Structure

General Manager

Functional Manager

Functional Manager

Manager of Project Managers

Worker

Worker

Worker

Worker

Worker

Worker

Project Manager

Project Manager

Project Manager

Project Coordination

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Heavyweight Matrix Project Structure

• In heavyweight structures ... – Integration is very important and is the key responsibility of the

project leader.

– Objective is to provide a perfect system solution, not technical excellence within a narrow functional area.

– Project leader works with a core team of functional leaders. They have power to get things done within their units.

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Heavyweight Matrix Project Structure

• Characteristics of the project leader – A effective manager who is experienced in more than one

functional area.

– Works like a general manager (CEO) within the project. Can influence details.

– Works like the conductor of an orchestra:• Keeps track of how certain critical tasks are done and coordinated as

a whole.

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Evaluating Alternative Organizational Structures

• Use of (human) resources – Efficiency, flexibility, motivation

• Performance measurement– Career paths, performance reviews

• Focus– project vs. regular tasks

• Cross-functional integration

• Build-up and use of functional expertise and know-how.

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Evaluating Functional Organization

Strengths Weaknesses

Skill development Customer interface unclear

Technology transfer Project priority unclear

Low talent duplication Confused communication

High personal loyalty Schedule/cost controls are difficult

Technology development

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Evaluating Pure Project Organization

Strengths Weaknesses

Accountability clear Talent duplication

Customer interface clear Technology development

Controls strong Tehnical sharing

Communications strong Career development

Balances technical, cost and schedule

Hire/fire

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Evaluating Matrix Organization

Strengths Weaknesses

Single point accountability Manager skill level high

Customer interface clear Competition for resources

Rapid reaction Employee recognition

Duplication reduced Management cooperation required

Technology development

Career development

Disbanded easily