Factors Influencing Project Structure

The project organization structure …
outlines the positions, responsibilities, authorities and accountabilities of all the people involved within the project.
Draw effective organization and communication diagram
4 different ways of organizing projects within the parent organization:
The project as part of the Functional Organization
The project as a Free-standing part of the parent organization
Matrix Organization which is a hybrid of the two main types
Mixed/Hybrid organization
Draw functional organization diagram
Advantages of functional organization
-No radical alteration in the design and operation of the parent organization (some people to work routine rather than challenge of diverse projects)
-Maximum flexibility in the use of staff;
-Individual experts can be utilized by many different projects;
-Specialists in the division can be grouped to share knowledge and experience (home for technical expertise);
-The functional division also serves as a base of technological continuity when individuals choose to leave the project;
-The functional division contains the normal career path for individuals whose expertise is in the functional area.
Disadvantages of Functional organization
The project is not the focus of activity and concern(especially when moved to another department)
Poor integration across functional units;
There are often several layers of management between the project and the client (no single point of responsibility);
It generally takes longer to complete projects (departmental work may take priority over project work);
The motivation of people assigned to the project can be weak.
Draw The project team principle
Draw pure project organization
Advantages of pure project organization
The project manager has full line authority over the project;
Projects tend to get done more quicker;
A project team that has a strong and separate identity and develops a high level of commitment from its members;
It promotes more effective communication between the project manager and the team members;
Swift decision making;
When there are several successive projects of a similar kind, the pure project organization can maintain a permanent cadre of experts who develop skills in specific technologies;
The organizational structure tends to support a holistic(целостный)
approach to the project.
Disadvantages of Pure Project organization
Duplication of effort (when the parent organization running few projects concurrently);
Duplication of equipment and technical assistance;
Limited skills and knowledge;
Life after the project ends;
Sometimes dedicated project teams take an entity of their own and a disease known as projectitis develops
Draw matrix organization for manufacturing company
The matrix organization is a …
combination of functional and pure project.
A matrix organization can …
take on a wide variety of specific forms depending on relative authority of project and functional managers:
Draw weak matrix and balanced matrix
Responsibilities of project manager in Matrix organization:
What has to be done?
When should be done?
How much money is available to do the task?
How well has the total project been done?
What are negotiating issues?
Who will do the task?
Where will the task be done?
Why will the task be done?
Is the task satisfactory completed?
Responsibilites of functional manager?
How will it be done?
How will the project involvement impact normal functional activities?
How well has the functional input been integrated?
Advantages of Matrix organization
A strong project focus;
Response to client’s needs is as rapid as in the pure project organization;
Access to the reservoir of technology in all areas;
Flexible utilization of resources and expertise within the firm;
There is less anxiety about what happens when the project is completed.
Disadvantages of Matrix organization
The balance of power between the project and functional areas is very delicate(nozik);
The movement of resources from project to project may foster political infighting;
Problems associated with shutting down projects can be as severe as in a pure project organization;
Violation of principle – “unity of command”;
Decision making can bogged down(botqoq).
What are Mixed/Hybrid Organizational Systems?
Matrix and pure project organizations may coexist in a firm
Advantages of mized organization?
The hybridization of the mixed form leads to flexibility;
The firm is able to meet special problems by appropriate adaptation of its organizational structure.
Disadvantages of mixed organization
Dissimilar groupings within the same accountability center tend to encourage overlap, duplication, and friction because of incompatibility of interests;
Conditions still exist that result in conflict between functional and project managers.
Draw hibrid organization in large company
What is virtual organization?
Corporate downsizing and cost control have combined to produce virtual organizations.
Virtual organization is an alliance of several organizations for the purpose of creating products and services for customers.
Mostly operate in an electronic environment.
Advantages of virtual organization
Cost reduction;
A high level of expertise and technology;
Disadvantages of virtual organization
Coordination of professionals from different organizations may be challenging;
There is a potential to loss of control over the project;
Are more prone to interpersonal conflicts.
Draw table all organizations
Selecting the organizational interface between …
the project and the firm is a difficult task
The choice is determined by ….
the situation, but is also partly intuitive.
Must consider ….
the nature of the potential project, the characteristics of the various organization options, the advantages and disadvantages of each, the cultural preferences of the parent organization, and then make the best compromise that can be made.
Factors Influencing Project Structure
Size of project
Strategic importance
Novelty and need for innovation
Need for integration
Environmental complexity
Budget and time constraints
Stability of resource requirements
Criteria selecting organizational form
1.Define the project with a statement of the objective/s that identifies the major outcomes desired.
2. Determine the key tasks associated with each objective and locate the units in the parent organization that serve as functional “homes” for these types of tasks.
3. Arrange the key tasks by sequence and de-compose them into work packages.
4. Determine which organizational units are required to carry out the work packages and which units will work particularly closely with which others.
5. List any special characteristics or assumptions associated with the project.
6.In light of items 1-5, and with full cognizance of the pros and cons associated with each structural form, choose a structure.

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