62 Project Management for the Oil and Gas Industry

• Poor coordination similar project responsibilities

• Unreceptive attitudes on the part of the surrogate department
• Multiple layers of management
• Lack of concentrated effort

Projectized Organization
Another approach to organizing a project is to use the end product or goal of
the project as the determining factor for personnel structure. This is known
as the projectized structured, but often referred to as pure project organi-
zation or product organization, whereby the project is organized around a
particular product (e.g., project deliverable, goal). The project is set up as a
unique entity within the parent organization. It has its own dedicated tech-
nical staff and administration. It is linked to the rest of the system through
progress reports, organizational policies, procedures, and funding. The inter-
face between product-organized projects and other elements of the organiza-
tion may be strict or liberal, depending on the organization. An example of
a pure project organization is shown in Figure 3.7. Projects A, B, C, and D in
the figure may directly represent product types A, B, C, and D. Projectized
organization structure is suitable for two categories of companies:

1. Companies that use management-by-projects as a philosophy of

their operations
2. Companies that derive most of their revenues from performing proj-
ects for a fee

Such organizations normally have performance systems in place to

­ onitor, track, and control projects. For these companies, the personnel are
m
often colocated.

Program manager

Project A Project B Project C Project D

manager manager manager manager

Design Manuf. Design Manuf. Design Manuf. Design Manuf.

FIGURE 3.7
Projectized organization structure.