Organizing Projects

Text by Stanley E. Portny, Samuel J Mantel, Jack R. Meredith, Scott M. Shaffer, Margaret M. Sutton with Brian Kramer.

PowerPoints by Christine Mooney

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Project Organizational Structures

The approaches for organizing and managing projects have evolved from centralized and functional structures to matrix structures.

Figure 3-1 illustrates a centralized structure for administering projects.

This is also referred to as a fixed-group structure because the specialty areas are established parts of the organization.

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Centralized Structure

• FIGURE 3-1

Benefits of Centralized Structures

• Centralized control over project selection • One set of management procedures and

reporting systems for all projects • Established working relationship among

the project team • Clearly established lines of authority • Clear authority that increases pressure

for people to honor their commitments • Clearly defined career path for people in

the unit

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Challenges of working in a Centralized structure

• Slow response time to project requests

• Difficult to manage the peaks and valleys in staff workloads

• People’s lack of familiarity with areas that request their area’s services

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Functionally Organized Structures

The functionally organized structure was developed to be more responsive to needs of different organizational areas. In a functional structure, separate units addressing the same specialty are established in the organization’s different functional groups, as illustrated by Figure 3-2.

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Functionally Organized Structures

• INSERT FIGURE 3-2

Functional Structures

The functional structure is also known as fixed-group structure because the specialty units are permanent parts of the organization. As such, functional structures offer many of the advantages of centralized structures in addition:

a. People in a specialty unit have a better understanding of the functional area they support.

b. Organizational units don’t have to compete with one another to get the support of their specialty groups.

c. Functional groups are often very adept at technical problem-solving with the group.

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Concerns of Functional Structures

• Possibility that different work procedures and reporting systems will be used to guide projects in the same specialty area.

• More difficult to make major investments in equipment and facilities needed to support a unit’s technical work.

• Chance for overlap or duplication among projects in the same specialty area performed for different organizational groups.

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A Matrix Organization

A Matrix organization was devised to enable a quick and efficient response to projects that must be performed under today’s dynamic business conditions.

Figure 3-3 displays a matrix organization for administering projects. INSERT FIGURE 3-3 from text.

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Benefits of Matrix Organizations

• Matrix Management offers the following benefits:

a. Teams can be formed rapidly.

b. Scarce expertise can be applied to different projects.

c. Getting buy-in from team members is easier

d. Consistent systems and procedures can be used.

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Challenges of Matrix Organizations

• Team members respond to two different managers

• Team members working on more than one project may have to address competing demands for time

• Team members may not be familiar with each other’s style and knowledge

• Potential lack of focus on team and project goals

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Mixed Organization System

• Central, functional and matrix project organizations can exist side by side. Figure 3-4 is an example of a mixed organization structure.

• INSERT 3-4

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Structures Organizational structures,

including central, functional and matrix, each offer positives and negatives in creating environments for projects to occur.

Project managers need to tailor the way they manage a project to capitalize on strengths of a specific organizational structure and avoid its weaknesses. In today’s changing business environments, project managers need to adapt to changing businesses.

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