Chapter 4

PROJECT ORGANIZATION

When projects are initiated then the first decision to be made is how to tie the project to parent organization. Project
manager usually has no influence over the interface between the organization and the project but senior management does.
PM’s work is however strongly affected by the project’s structure, and the PM should understand it’s working.

Project organization is dependent on two main factors:

1. Efficiency of utilization of resources
2. Mental concentration

PURE PROJECT ORGANIZATION

The project is separated from the rest of the parent organization. It becomes a self contained unit with it’s own technical
staff and it’s own administration. It is like a temporary organization within the organization, but separate from the parent
organization. All the resources are given to the project from the beginning to the end of project. These resources include
the human resources, financial resources, equipment, material etc.. The project manager has full authority over his project
team. The senior management or the departmental managers of the organization cannot interfere in the affairs of the
project.

Advantages of Pure Projects

1. Project Manager has full authority

2. Functional Manager’s permission not required
3. High mental concentration
4. Strong communication among team.
5. Unity of command
6. Project team take successive projects after successfully finishing one project.
7. Project team has strong and separate identity, strong coordination and motivation
8. Swift project related decisions with centralized authority.

Disadvantages of Pure Projects

1. Policies of the organization can get violated. PM has the authority to make his own policies with respect to
project.
2. Staff and equipment shortages in case of multiple pure projects
3. Low efficiency of utilization of resources.
4. Skilled staff not available for routine work
5. For long term pure projects, the project team members get left behind in the technology of their respective
departments.
6. There is anxiety among project team members, what would happen after the project finishes.
7. For long term projects the project team members often get overlooked for promotion.

PROJECT AS PART OF FUNCTIONAL ORGANIZATION

Some projects needs require that it should be made part of one of the departments of the firm. This can be called functional
project or departmental project. In these kind of projects only PM gets designated and there is no designated team for the
project. All the employees of the department are encouraged to participate in the project in their individual free time, if
interested. First priority for the employees of the department is the routine work, but are encouraged to participate in the
project in their free time, if interested. The departmental employees have to work under two bosses i.e. the FM and the PM.
When they are working in their routine work the functional manager of the specific department is their boss, and when
anyone is working for the project in his/her free time, has PM as the boss.

Advantages of Functional Projects

1. Maximum flexibility in the use of staff

2. All the equipment of the department can be available for the project if not in routine work use.
3. All the departments experts can be available.
4. Technological continuity
5. Normal path of advancement of careers.
6. Maximum efficiency of utilization of resources with respect to only one concerned department.
7. No anxiety about the project finishing.

Disadvantages

1. Project is not the focus.

2. Two bosses PM and the Functional manager creates conflict of authority, but functional manager is on higher
priority.
3. Lack of teamwork.
4. Lack of coordination and motivation.
5. Mental concentration is divided between project and routine work, with higher focus on routine work, so is less.
MATRIX ORGANIZATION
To combine the advantages of pure project and functional project organizations and to avoid the disadvantages of each, the
matrix organization was developed, which is a combination of the pure project and functional project. In this kind of
project organization several projects can be run by an organization concurrently.

The Project Manager in this case usually reports to program manager who also exercises supervision over other projects.
See Figure below

Here as we see in the figure above, several different projects are run at the same time for an organization. Each project has
its respective project manager and its designated team members from each department (just like a pure project). But as we
see in the diagram above each of the projects are interconnected, which means that the respective team members can be
shifted to other projects or to the routine work if they have less work in their respective project.

Each project team member would work in his respective project as first priority. When there is less or no work in his
project for the person then the respective functional manager would shift him to another project which has work for him, or
to the routine work. So for each of the team members of all the projects there are two bosses at the same authority level,
which creates the biggest conflict of authority. This is the only big disadvantage in Matrix projects, which can be resolved
by making certain rules.

Advantages of Matrix Projects

1. Project manager has full authority over his project team, i.e. unity of command.
2. Project takes labor and talent of all departments temporarily.
3. Maximum efficiency of utilization of resources of all the departments.
4. Moderate mental concentration.
5. Several projects can run concurrently, efficiently.
6. Less anxiety when the project will finish
7. Focus on client and project
8. No violation of organizational policies
9. Better use of resources by several projects.
10. Normal path of advancement of careers
11. No chances of anybody leaving behind in technology of their parent departments.

Disadvantages of Matrix Projects

1. The biggest disadvantage is that there are two bosses i.e. the PM and the FM, at the same level of authority,
creates conflict of authority.
2. The movement of resources between different projects foster infighting among several PMs, focusing on their
respective projects.

CHOSING AN ORGANIZATIONAL INTERFACE

The choice is determined by the situation
1. Consider the nature of the potential project
2. Characteristics of the various organizational options
3. Advantages and disadvantages of each.
4. Cultural preferences of the parent organization
In general functional form is suitable where the major focus of the project is in-depth application of a technology e.g
minimizing cost, meeting a specific schedule, or achieving speedy response to a change.
If a firm engages in large number of similar projects e.g construction projects then the pure project form of organization is
preferred. This type of organization is also suitable for one time, highly specific unique tasks that require careful control
e.g the development of new product line. When the project requires the integration of inputs from several functional areas
and involves reasonably sophisticated technology but does not require all the technical specialists to work for the project on
a full-time basis, the matrix organization is the only satisfactory solution
Also when several such projects must share technical experts, this choice is better.

NEEDS OF HAVING PROJECT OFFICE

PROJECT TEAM
Different projects have vastly different staff needs. For example an engineering project to determine how to form a project
team.

The following key members will be needed plus an appropriate no. of scientists, engineers, technicians, clerks and the
like.
1. Project Engineer :- Incharge of product design and development
2. Manufacturing Engineer :- Efficient production of the process
3. Field manager :- Installation, testing, support
4. Contract Administrator :- Official paperwork, contracts
5. Project Controller :- Keeps daily account of budgets, costs, supplies etc
6. Support Service manager :- Incharge of product support, subcontractors

The Project Engineer and Product Controller report directly to PM to have control of tech performance and budget.

HUMAN FACTORS AND PROJECT TEAM

1. High level of political sensitivity
2. Must continue to stress the importance of meeting due dates.
3. Motivation of team members :- Recognition, achievement, responsibility, advancement and chance to learn new skills.
PM’s responsibility is to make sure that project work is structured in such a way to emphasize these motivating factors.
4. Organizing the team work in such a way that team members are mutually dependent, to form a strong team.
5. Interpersonal conflict and conflict resolution.