Project

Project Management
Management Structures
Structures
• Challenges to Organizing Projects
– The uniqueness and short duration of projects relative
to ongoing longer-term organizational activities
– The multidisciplinary and cross-functional nature of
projects creates authority and responsibility dilemmas.
• Choosing an Appropriate Project Management
Structure
– The best system balances
the needs of the project
with the needs of the
organization.

3–1
 Project
Project Management
Management Structures
Structures
• Organizing Projects: Functional organization
– Different segments of the project are delegated
to respective functional units.
– Coordination is maintained through normal
management channels.
– Used when
• the interest (work content) of one functional area
dominates the project or
• one functional area has a dominant interest in the
project’s success.

3–2
Functional
Functional Organizations
Organizations

FIGURE 3.1
 Functional
Functional Organization
Organization of
of Projects
Projects
• Advantages • Disadvantages
1. No Structural 1. Lack of Focus
Change
2. Poor Integration
2. Flexibility
3. Slow
3. In-Depth Expertise
4. Lack of Ownership
4. Easy Post-Project
Transition

3–4
 Project
Project Management
Management Structures
Structures (cont’d)
(cont’d)
• Organizing Projects: Dedicated Teams
– In a projectized organization where projects are the
dominant form of business, functional departments are
responsible for providing support for its teams.
– Teams operate as separate units under the leadership
of a full-time project manager.

3–5
Dedicated
Dedicated Project
Project Team
Team

FIGURE 3.2
Project
Project Organizational
Organizational Structure
Structure

FIGURE 3.3
 Project
Project Organization:
Organization: Dedicated
Dedicated Team
Team
• Advantages • Disadvantages
1. Simple 1. Expensive
2. Fast 2. Internal Strife
• Divisiveness between project
3. Cohesive team and the parent company

4. Cross-Functional 3. Limited (in-house)

Integration Technological
Expertise
4. Difficult Post-Project
Transition

3–8
 Project
Project Management
Management Structures
Structures (cont’d)
(cont’d)
• Organizing Projects: Matrix Structure
– Hybrid organizational structure (matrix) is overlaid on
the normal functional structure.
• Two chains of command (functional and project)
• Project participants report simultaneously to both
functional and project managers.
– Matrix structure optimizes the use of resources.
• Allows for participation on multiple projects while
performing normal functional duties.
• Achieves a greater integration of expertise and
project requirements.

3–9
Matrix
Matrix Organization
Organization Structure
Structure

FIGURE 3.4
 Different
Different Matrix
Matrix Forms
Forms
• Weak Form
– The authority of the functional manager predominates
and the project manager has indirect authority.
• Balanced Form
– The project manager sets the overall plan
– The functional manager determines how work to be
done.
• Strong Form
– The project manager has broader control.
– Functional departments often act as subcontractors
to the project.

3–11
 Project
Project Organization:
Organization: Matrix
Matrix Form
Form
• Advantages • Disadvantages
(compared to 1. Dysfunctional Conflict
functional org.) • Predicated on tension between
functional managers and project
1. Efficient managers,
• Due to different expertise &
2. Strong Project Focus perspectives, resulting from
conflicting agendas and
accountabilities.
3. Easier Post-Project
Transition 2. Infighting
• Among project managers due to
4. Flexible sharing resources

3. Stressful
• As it violates the unity of command
mgt. principle

4. Slower than projectized org.

• In order to forge agreements across
functional groups

3–12
 Division
Division ofof Project
Project Manager
Manager and
and
Functional
Functional Manager
Manager Responsibilities
Responsibilities
in
in aa Matrix
Matrix Structure
Structure
Project Manager Negotiated Issues Functional Manager

What has to be done? Who will do the task? How will it be done?

When should the task be done? Where will the task be done?

How much money is available to Why will the task be done? How will the project involvement
do the task? impact normal functional activities?

How well has the total project Is the task satisfactorily How well has the functional
been done? completed? input been integrated?

TABLE 3.1
 Choosing
Choosing the
the Appropriate
Appropriate Project
Project
Management
Management Structure
Structure
• Organization (Form) Considerations
– How important is project (mgt.) to the firm’s success?
• If critical, => consider projectized organization

– What percentage of core work involves projects?

• More than 75% of core work involves projects => use project org.
• Have both MTS & MTO in the org., => consider matrix.
• Very few projects, => dedicated teams or outsourcing

– What level of critical resources (human and physical)

are available?
• Somewhat available but need to share, => matrix
• Not available, => outsourcing

3–14
 Choosing
Choosing the
the Appropriate
Appropriate Project
Project
Management
Management Structure
Structure (cont’d)
(cont’d)
• Project Considerations
1. Size of project
2. Strategic importance
3. Novelty and need for innovation
4. Need for integration (number of departments involved)
5. Environmental complexity (number of external interfaces)
6. Budget and time constraints
7. Stability of resource requirements

• Notes:
– The higher the levels of these factors, the more autonomy and
authority the project manger and project team need in order to
be successful 3–15
 Rated
Rated Effectiveness
Effectiveness ofof Different
Different
Project
Project Structures
Structures by
by Type
Type of
of
Project
Project

Source: Larson, E. W., and Gobeli, D. H., “Matrix Management: Contradictions and
Insights,” California Management Review, vol. 29, no. 4 (Summer 1987), p. 137.
FIGURE 3.6
 Organizational
Organizational Culture
Culture
• Organizational Culture Defined
– A system of shared values, beliefs, norms, and
assumptions which bind people together, thereby
creating shared meanings.
– The “personality” of the organization that sets it
apart from other organizations.
• Provides a sense of identify to its members.
• Helps legitimize the management system of the
organization.
• Clarifies and reinforces standards of behavior.

3–17
 Identifying
Identifying Cultural
Cultural Characteristics
Characteristics

• Study the physical characteristics

of an organization.
• Read about the organization.
• Observe how people interact
within the organization.
• Interpret stories and folklore
surrounding the organization.

3–18
Key
Key Dimensions
Dimensions Defining
Defining an
an Organization’s
Organization’s Culture
Culture

FIGURE 3.7
Cultural
Cultural Dimensions
Dimensions of
of an
an Organization
Organization
Supportive
Supportive of
of Project
Project Management
Management

FIGURE 3.9
Mechanisms
Mechanisms for
for Sustaining
Sustaining Organizational
Organizational
Culture
Culture

FIGURE A3.1