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.

OPSM 639, C. Akkan 1

 Project Management Organization
Structures
• Three main types organization structures used in
projects:
– Functional project organization
– Pure project organization
– Matrix project organization

OPSM 639, C. Akkan 2

 Functional Project Organization
Project
General Manager Coordination

Functional Functional Functional

Manager Manager Manager

Worker Worker Worker

Worker Worker Worker
Worker Worker Worker

OPSM 639, C. Akkan 3

 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.

OPSM 639, C. Akkan 4

 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).
OPSM 639, C. Akkan 5
 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.

OPSM 639, C. Akkan 6

 Pure Project Organization
Project Coordination General Manager

Project Project
Manager Manager Human
Resources

Worker Worker Marketing

Worker Worker Finance
Worker Worker Legal

OPSM 639, C. Akkan 7

 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.

OPSM 639, C. Akkan 8

 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.

OPSM 639, C. Akkan 9

 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.

OPSM 639, C. Akkan 10

 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”

OPSM 639, C. Akkan 11

 Lightweight Matrix Project
Organization
General Manager

Functional Functional Functional

Manager Manager Manager

Worker Worker Worker

Worker Worker Worker
Worker Worker Worker
Project coordination
OPSM 639, C. Akkan 12
 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.

OPSM 639, C. Akkan 13

 Heavyweight Matrix Project
Structure
General Manager

Functional Functional Manager of Project

Manager Manager Managers

Worker Worker Project Manager

Worker Worker Project Manager
Worker Worker Project Manager
Project Coordination
OPSM 639, C. Akkan 14
 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.

OPSM 639, C. Akkan 15

 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.

OPSM 639, C. Akkan 16

 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.

OPSM 639, C. Akkan 17

 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

OPSM 639, C. Akkan 18

 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 Hire/fire

schedule

OPSM 639, C. Akkan 19

 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

OPSM 639, C. Akkan 20