Fundamentals of Project

Management

Project Organization Structures

 Learning Outcomes
Understand the advantages and
disadvantages of using a functional
organisation structure to manage multi-
disciplined projects
Understand the advantages and
disadvantages of using a matrix
organisational structure to manage multi-
disciplined projects
Understand the responsibility-authority gap
Intersecting Needs
Functional Organisation
Structure
 Functional Organisation
Structure 1
Advantages
Simple – because it is simpler to
manage single disciplined projects
Flexible – switching between
projects is easy
Home – the technical expertise is
situated in the department
 Functional Organisation
Structure 2
Advantages
Support – technical expertise
provided excellent support in the
department
Career Path - the functional
department provides the normal
career path
 Functional Organisation
Structure 3
Advantages
Estimating – scope of work is
restricted to one field so estimations
are easier (because of close-out
reports in the database
Communications – lines of
communication in the department are
short and well established
 Functional Organisation
Structure 4
Advantages
Reaction Time – quick reaction times
in a department
Consistent – there is consistent work
routine and some team member do
not like working on diverse projects
Responsibility – there are clearly
defined responsibilities and authority
 Functional Organisation
Structure 5
Disadvantages
Responsibility – no single point of
responsibility can lead to chaos
Lines of Communication – must work
through the formal functional
department heads slowing the
communication down
 Functional Organisation
Structure 6
Disadvantages
Conflict – competition and conflict
between departments can slow
communication down
Priority – departmental work might
take priority over project work
Client – the project is not always the
main focus of a functional manager
 Functional Organisation
Structure 7
Disadvantages
Stakeholders – the responsibility for
external communication with
stakeholders can become muddled
Co-ordinating – without a clear
Project Manager the client might end
up managing the project
 Functional Organisation
Structure 8
Disadvantages
Myopic – department might focus
mostly on own scope of work and
not so much on the project
Motivation – motivation can be weak
if the work is not seen as mainstream
MATRIX ORGANISATIONAL
STRUCTURE
It is seen as the natural project
organisational structure.
The matrix structure presents the
temporary project lines of responsibility
Overlaying the functional lines of
responsibility
Outlines the relationship between the
project manager, functional managers
and their subordinates
MATRIX ORGANISATIONAL
STRUCTURE
It formalise the informal links on multi-
disciplined projects employees need to
communicate at the operational level to
perform their tasks.
Where the lines of responsibility
intersect, it presents people to people
contact, thus providing shorter lines of
communication.
Matrix Organisation Structure
Matrix Organisation Structure 1
Advantages
Responsibility – project have a single
point of responsibility
Resources – project can draw on the
entire resources of the organisation
Equipment – the cost of equipment
can be shared between projects and
departments
Matrix Organisation Structure 2
Advantages
Seconded – after project termination
the seconded resource just return to
his/her original department
Client – Rapid response because the
client communicates directly with the
project manager
Matrix Organisation Structure 3
Advantages
Corporate Links – consistency with
corporate policies and strategies
Job Descriptions – tailored to the
needs of the project
Trade-Offs – needs of project and
functional department can be
addressed by negotiation and trade-
off
Matrix Organisation Structure 4
Advantages
Problem Solving – can draw on a
much wider base for ideas and
brainstorming
Experts – technology, know-how,
expertise and knowledge is retained
in the functional department after
projects are finished
Matrix Organisation Structure 5
Advantages
Multi-Disciplinary – the multi –
disciplinary environment exposes
workers to a wide range of challenges
Career Path – keep their career path in
the functional department and can also
have a new career in the project office
Matrix Organisation Structure 6
Advantages
Training – good training ground for the
resources that work in the different
environments (Functional and projects)
Integration – integrate PBS and WBS
with the OBS
Matrix Organisation Structure 7
Disadvantages
Complex Structure – the organisational
structure is complex and more difficult
for participants to understand
Dual responsibility – leads to confusion,
divided loyalties and conflicts
Conflict – the two-boss situation is a
recipe for conflict
Matrix Organisation Structure 8
Disadvantages
Priorities – an organisation with a
number of projects face real problems
with priorities and resource allocation
Cost – cost is higher than running a
functional department because of
increased number of managers needed
Matrix Organisation Structure 9
Disadvantages
Integration – in functional
departments it is clear who has
power to make decisions but not so
clear in matrix organisations
because power is balanced between
departments
Sharing – sharing scarce resources
lead to conflict
Matrix Organisation Structure 10
Disadvantages
No Desk – after secondment of a few
years people might find out that they have
been replaced in their departments
Complex Situation – project manager
controls administrative decisions and
functional manager controls technical
decisions – recipe for conflict
Personnel – not always best people on
project from functional department
 Classwork: 6 September
1.The matrix structure is considered by many
practitioners to be logical project organization
structure.
Discuss how you could use this structure to
manage your projects.
 Classwork: 6 September
2. Clients prefers to deal with one person
(project manager).
Discuss how this applies to your projects as
a contractor, and separately as a client.
Responsibility – Authority Gap
Responsibility – Authority Gap 1
Formal Authority
Budget Authority
Coercive Power
Information Power
Responsibility – Authority Gap 2
Reward Power
Cognitive Persuasion
Personal Power (Charisma)
 Project Organization
Structures

End