CH 19 Project Organization Structure

Ch
Chapter 19
Project Organizational Structure
Organizational Structure
Organization: An organization is a social group of people, which is

established to meet a need or pursue a collective goal on a
continuing basis.
Organizational Structure: An organizational structure determines

relationships between functions and positions, and delegates roles
and responsibilities, and also assign authority and accountability to
carry out defined tasks.
tasks
There are different types of organization structures that companies

f ll
follow d
depending
di upon naturet off business,
b i
Types of Organization Structure
 Functional Organization
 Matrix Organization
 Weak Matrix
 Strong
St Matrix
M ti
 Balanced Matrix
 Projectized Organization
Functional Organization Structure
A functional organizational structure is centered on job functions, such as
design, construction, marketing, and finance. Small companies should use
a functional organization when they want to arrange their organizational
structure by department.
For example, a small company may have a CEO, and a director each
functional department. Under each director would be many managers,
engineers and other staff. Each director would be responsible for the
overall performance of their department and the staff under each
department.
A functional organizational structure works well when small companies are
heavily focused on the performance of the function or department.
Directors can assign certain projects to managers, who can then divvy up
tasks with their analysts.
analysts The department can then try to effectively meet
their project deadlines.
Functional Organiztion
Functional Organization - Key Points
 The organization is grouped by areas of specialization within

different functional areas.
 Projects generally occur within a single department.
 Information required from other department will be routed

through departmental heads.
 Team members complete project work in addition to normal

department work.
Projectized Organization
Many project managers prefer to use a projectized organization structure

to administer their projects. This type of structure groups together all
personnel working
p g on a pparticular p
project.
j
Project team members are often located together and under the direct
authority of the project manager for the duration of the project.
The project manager in a projectized structure may have complete power

over the project team.
Project manager in a projectized structure enjoy a high level of autonomy

over their projects but also have a higher level of responsibility regarding
the project success
Projectized Organization
Projectized Organization – Key Points
 The entire company is organized by projects.
 The project manager has control of projects.

projects
 Personnel are assigned and report to a project manager.
 Team members complete only project work and when its over
they don't have HOME.
 Communication generally occurs only within the project.

A Matrix Organization
Matrix structures are organizations
g that have a blend of departmental
p
duties and employees together on a common project. The project team
member to be from multiple departments working toward the project
completion Team member will report to multiple project managers and
completion.
functional managers.
Each employee reports to the functional head and is supervised and

controlled by the project hear due to their membership to certain project.
So the employee would report to the two bosses among whom the
project manager would
o ld be more concerned withith the project deliveries
deli eries and
deadlines while the functional manager would be interested in developing
standards of work, new technologies and ensuring the continuity of work
for their people.
Weak Matrix Organization
In a weak matrix structure, the project team may come from

different departments but all the employees including the project
manager reports directly to the functional manager.
The power lies with the functional manager who takes most of
the decisions.
Weak Matrix Organization
Weak Matrix - Key Points
 Two
o Bosses
osses
 Team members reports to Project Manager and Functional Manager
 Team members do project work in addition to normal departmental work
 Power rests with functional manager
 Limited authority
 Management of a part-time project team
 Project role is part-time
 May have part-time administrative staff to help expedite the project
 Project
j Manager
g p plays
y a role of:
 Project Expediter: Cannot take decision. Staff assistant and Communication
coordinator.
 Project Coordinator: Similar to Project Expeditor except has some power to
take decision.
Strong Matrix
Strong matrix equates to a strong project manager.
The pproject
j manager
g is responsible
p for all the employees
p y has the p
power
for all decisions to ensure the delivery of the project.
Hence, the project manager can feel empowered to directly manage

workers, and, as a result, manage an entire project appropriately, without
forcing project managers to become involved in human resources issues.
Strong Matrix
Strong Matrix – Key Points
 Power rests with the Project Manager
 Management of a part-time to nearly full time project team
 Full-time role as a Project Manager
 Has a full-time administrative staff to help expedite the project

Balanced Matrix Organization
Balanced Matrix Organization - Key Points
 Two Bosses
 Team members reports

p to Project
j Manager
g and Functional Manager
g
 Team members do project work in addition to normal departmental

work
 Power is shared between the functional and project manager
 Management of a part
part-time
time project team
 Full-time role as a Project Manager
 May
M have
h part-time
t ti administrative
d i i t ti staff
t ff tto h
help
l expedite
dit the
th project
j t
Organization Structure influence on Project
Demingism and TQM
 Dr. Deming 14 steps to develop quality management program
 Create constancy of purpose for improvement of product and service.
 Adopt the new philosophy.
 Cease dependence on mass inspection.
 End the practice of awarding business on price tag alone.
 Improve constantly and forever the system of product and service.
 Institute training and retraining.
 Institute leadership.
 Drive out fear.
 Break down barriers between staff areas.
 Eliminate slogans, exhortations, and targets for the workforce.
 Eliminate numerical quotas.
 Remove barriers of pride of workmanship.
 Institute a vigorous program of education and retraining.
 Take action to accomplish the transformation. (follow the previous 13 steps)
Project Organization Structure
 Owner Team (Reimbursable Contract)

 In a cost reimbursable contract, the owner should have direct control
over the contractor, since chances of contractor shooting up the project
cost is high.
 Pre-contract activities for contractor evaluation

 Effective Proposal Evaluation Criteria
 Interview of key Project Personnel
 Clear contract clause to avoid litigation
 Evaluate contractor project management plan

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Ch

Organization: An organization is a social group of people, which is

Organizational Structure: An organizational structure determines

There are different types of organization structures that companies

 The organization is grouped by areas of specialization within

 Projects generally occur within a single department.

 Information required from other department will be routed

 Team members complete project work in addition to normal

Many project managers prefer to use a projectized organization structure

The project manager in a projectized structure may have complete power

Project manager in a projectized structure enjoy a high level of autonomy

 The entire company is organized by projects.

 The project manager has control of projects.

 Personnel are assigned and report to a project manager.

 Communication generally occurs only within the project.

Each employee reports to the functional head and is supervised and

In a weak matrix structure, the project team may come from

Strong matrix equates to a strong project manager.

Hence, the project manager can feel empowered to directly manage

 Power rests with the Project Manager

 Management of a part-time to nearly full time project team

 Full-time role as a Project Manager

 Has a full-time administrative staff to help expedite the project

 Team members reports

 Team members do project work in addition to normal departmental

 Power is shared between the functional and project manager

 Full-time role as a Project Manager

 Owner Team (Reimbursable Contract)

 Pre-contract activities for contractor evaluation

 Interview of key Project Personnel

 Clear contract clause to avoid litigation

 Evaluate contractor project management plan

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