Project Management: A

Managerial Approach

Chapter 4 Project Organization

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 Overview
Project Fit in Organizations
Types of Organizations
The Project Management Office (PMO)
Project Teams

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 Growth of Project Oriented
Organizations
There are many reasons for the rapid growth,
but most of them can be grouped in four general
areas:
Speed and market responsiveness have become
absolute requirements for successful competition
The development of new products, processes, or
services regularly requires input from diverse areas
of specialized knowledge
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 Growth of Project Oriented
Organizations
Four reasons for growth (cont.)

Rapid expansion of technological possibilities in

almost every area of enterprise tends to destabilize
the structure of organizations
A majority of senior managers rarely feel much
confidence in their understanding and control of the
activities in their areas
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 Types of Project Organizations
There are two fundamentally different ways of
organizing projects within the parent organization
The project as part of the Functional Organization
The project as a free-standing part of the parent
organization
A third type, called a Matrix Organization is a
hybrid of the two main types
Each has advantages and disadvantages

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 The Project as Part of the Functional
Organization
Advantages of using the functional elements of the parent
organization as the administrative home for a project
include:
Maximum flexibility in the use of staff
Individual 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 technological
continuity when individuals choose to leave the project
The functional division contains the normal path of advancement
for individuals whose expertise is in the functional area
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 The Project as Part of the Functional

Organization
There are also disadvantages to housing the project in a
functional area:
The client is not the focus of activity and concern
The functional division tends to be oriented toward the activities
particular to its function
Occasionally, no individual is given full responsibility for the
project
There are often several layers of management between the
project and the client
There is a tendency to suboptimize the project
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 Pure Project Organization
Advantages of a pure project organization:
The project manager has full line authority over the project
All members of the project work force are directly responsible to
the project manager
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 maintain a permanent cadre of
experts who develop skills in specific technologies

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 Pure Project Organization
Advantages of a pure project organization (cont.)
A project team that has a strong and separate identity and
develops a high level of commitment from its members
Because the authority is centralized, the ability to make a swift
decision is enhanced
Unity of command exists
Pure project organizations are structurally simple and flexible,
which makes them relatively easy to understand and implement
The organizational structure tends to support a holistic approach
to the project
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 Pure Project Organization
Disadvantages of a pure project organization:
Each project tends to be fully staffed which can lead to a
duplication of effort in every area from clerical staff to
technological support
There is a need to ensure access to technological knowledge and
skills that results in an attempt by project managers to stockpile
equipment and technical assistance
The functional division is a repository of technical lore, but it is
not readily accessible to team members of the pure project team

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 Pure Project Organization
Disadvantages of a pure project organization
(cont.)
Pure project groups seem to foster inconsistency in the
way in which policies and procedures are carried out
In a pure project organization, the project takes on a life
of its own
There tends to be concern among team members about
life after the project ends
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Pure Project Organization

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 The Matrix Organization
The matrix organization is a combination of
functional and pure project
A matrix organization can take on a wide variety of
specific forms
Project or strong matrix organization most resembles
the pure project organization
The coordination or functional or weak matrix most
resembles the functional form
The balanced matrix lies in between the others

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 The Matrix Organization
Rather than being a stand alone organization, like
the pure project, the matrix project is not separated
from the parent organization:

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 The Matrix Organization
As with other organizational forms, the matrix
organization has its own unique advantages:
The project is the point of emphasis
Because the project is overlaid on the functional
divisions, the project has reasonable access to the
reservoir of technology in all areas
There is less anxiety about what happens when the
project is completed

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 The Matrix Organization
Advantages of a Matrix (cont.)
Response to clients needs is as rapid as in the pure
project organization
Matrix management gives the project access to
representatives from the administrative units of the parent
firm
The matrix organization allows a better company-wide
balance of resources to achieve goals
There is a great deal of flexibility in precisely how the
project is organized within the matrix
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 The Matrix Organization
There are also disadvantages to using the matrix
organization; most involve conflict between the
functional and project managers:
The balance of power between the project and
functional areas is very delicate
The movement of resources from project to project may
foster political infighting
Problems associated with shutting down projects can be
as severe as in a pure project organization
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 The Matrix Organization
Disadvantages of a Matrix (cont.)
The division of authority and responsibility in a matrix
organization is complex, and uncomfortable for the
project manager.
Matrix management violates the management principle
of unity of command. Project workers have at least two
bosses, their functional heads and the project manager.

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 Mixed Organizational Systems
Divisionalization is a means of dividing a large
organization into smaller more flexible units
This enables the parent organization to capture
some of the advantages of small, specialized
organizational units while retaining some of the
advantages that come with larger size units

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 Mixed Organizational Systems
Pure functional and pure project organizations
may coexist in a firm

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 Mixed Organizational Systems
Advantages of a mixed organization:
The hybridization of the mixed form leads to flexibility
The firm is able to meet special problems by
appropriate adaptation of its organizational structure
Disadvantages include:
Dissimilar groupings within the same accountability
center tend to encourage overlap, duplication, and
friction because of incompatibility of interests
Conditions still exist that result in conflict between
functional and project managers
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Staff Organization

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 Choosing an Organizational Form
Selecting the organizational interface between the project
and the firm is a difficult task
The choice is determined by the situation, but is also partly
intuitive
Must consider the nature of the potential project, the characteristics
of the various organization options, the advantages and
disadvantages of each, the cultural preferences of the parent
organization, and then make the best compromise that can be made

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 Choosing an Organizational Form
Criteria for the selection of a project organization:
1. Define the project with a statement of the objective(s) that
identifies the major outcomes desired
2. Determine the key tasks associated with each objective and
locate the units in the parent organization that serve as functional
homes for these types of tasks
3. Arrange the key tasks by sequence and decompose them into
work packages
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 Choosing an Organizational Form
Criteria for the selection of a project organization (cont.):
4. Determine which organizational units are required to
carry out the work packages and which units will work
particularly closely with which others
5. List any special characteristics or assumptions
associated with the project
6. In light of items 1-5, and with full cognizance of the
pros and cons associated with each structural form,
choose a structure

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 The Project Team
To staff a project, the project manager works from a
forecast of personnel needs over the life cycle of the
project
A work breakdown structure (WBS) is prepared to determine
the exact nature of the tasks required to complete the project
Skills requirements for these tasks are assessed and like skills
are aggregated to determine work force needs
From this base, the functional departments are contacted to
locate individuals who can meet these needs
Certain tasks may be subcontracted

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 The Project Team
There are some people who are more critical to
the projects success than others and should
report directly to the project manager or the
project managers deputy:
Senior project team members who will be having a
long-term relationship with the project
Those with whom the project manager requires
continuous or close communication
Those with rare skills necessary to project success
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 Human Factors and the Project Team

Meeting schedule and cost goals, without

compromising performance is a technical
problem, with a human dimension
Project professionals tend to be perfectionists
Pride in workmanship leads the team member to
improve (and thus change) the product
These changes cause delays in the project

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 Human Factors and the Project Team
Inspiring Project Team Members:
The project manager often has little control over the economic
rewards and promotions of project team members, but this does
not mean he/she cannot facilitate motivation of team
How are technical employees motivated?
Recognition
Achievement
The work itself
Responsibility
Advancement
Learning new skills
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 Human Factors and the Project Team
Empowerment of project teams is also a motivational
factor:
1. It harnesses the ability of the team members to
manipulate tasks so that project objectives are met. The team is
encouraged to find better ways of doing things
2. Professionals do not like being micromanaged.
Participative management does not tell them how to work but
given a goal, allows them to design their own methods
3. The team members know they are responsible and
accountable for achieving the project deliverables

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 Human Factors and the Project Team
Advantages of Empowerment (cont.):
4. There is a good chance that synergistic solutions
will result from team interaction
5. Team members get timely feedback on their
performance
6. The project manager is provided a tool for
evaluating the teams performance

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 Interpersonal Conflict
The focus of conflict can often be related to the stage in
the projects life cycle
When the project is first organized, priorities, procedures and
schedules all have roughly equal potential to cause conflict
During the buildup phase, priorities become significantly more
important than any other conflict factor
In the main program phase schedules are the most important
cause of conflict followed by technical disagreements
At the project finish, meeting the schedule is the critical issue

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 Interpersonal Conflict
Conflict and the Project Manager
Most of the conflict on project teams is the result of
individuals focusing on the project through the eyes of their
individual discipline or department
Conflict avoiders do not make successful project managers
On occasion, compromise appears to be helpful, but most
often, gently confronting and resolving the conflict is the
method of choice, for a win-win situation

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PLC and Conflict Intensity

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Copyright 2006 John Wiley & Sons, Inc.
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