Project Management Organization Structures

1. 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

2. 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

3. Functional Project Organization Project Coordination General Manager Functional Manager Functional Manager Functional Manager Worker Worker Worker Worker Worker Worker Worker Worker Worker OPSM 639, C. Akkan

4. 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

5. 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

6. 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

7. Pure Project Organization Project Coordination General Manager Project Manager Project Manager Human Resources Worker Worker Marketing Worker Worker Finance Worker Worker Legal OPSM 639, C. Akkan

8. 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

9. 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

10. 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

11. 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

12. Lightweight Matrix Project Organization General Manager Functional Manager Functional Manager Functional Manager Worker Worker Worker Worker Worker Worker Worker Worker Worker Project coordination OPSM 639, C. Akkan

13. 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

14. Heavyweight Matrix Project Structure General Manager Functional Manager Functional Manager Manager of Project Managers Worker Worker Project Manager Worker Worker Project Manager Worker Worker Project Manager Project Coordination OPSM 639, C. Akkan

15. 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

16. 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

17. 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

18. Evaluating Functional Organization OPSM 639, C. Akkan

19. Evaluating Pure Project Organization OPSM 639, C. Akkan

20. 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