Lecture 5
5. Project & Organization
Structure
Bibek Ropakheti
Outline
• Organization
• System View of Project Management
• Organizational Structure in a Project
• Functional Organization
• Pure Project Organization
• Matrix Organization
• Organizational Structure Influences on Projects
Organization
• Organization is a group of people having different knowledge and
skills working together to achieve an organizational goal.
• Projects cant be run in isolation. Projects must be operated in a broad
organizational environment.
• Project Managers need to take the holistic or system view of a project
and understand how it is simulated within the larger organization.
Organization
Types of Organization
• Line organization
• Line and Staff organization
• Functional organization
• Project organization
System View of Project Management
• Project Management System is an organized set of tools and
procedures for helping managers and teams to achieve project goals.
• Three parts of projects’ system view include:
• Systems Philosophy: View things as systems, interacting components working
within the environment to fulfill some purposes.
• Systems Analysis: Problem Solving Approach
• Systems Management: Address business, technological and organizational
issues before making changes to systems.
How much Cost?
Where is Funds?
System View of Project Who are Stakeholders?
Management What will be Profit?
Business
Which technology will be
What are tangible and
used & why?
intangible benefits?
Which software, hardware
What are long term & short
& network will be
term effects?
What skills and facilities will
Organization Technology required?
Proven technology Vs.
be required?
Obsolete technology
How will resource be
Where to get necessary
mobilized?
technological support
What type of resource
from?
development will be required?
How to cope with
technological changes?
System View of Project Management
Three Key Essences
• Structured Approach: Organizational Structure
• Disciplined Approach: Coordinated Management Processes
• Defined Approach: Purposefully defined inputs and outputs for each
process
Organizational Structure in a Project
• Organizational structure represents the formal relationship and main
line of communication, flow of responsibilities and authorities
through the management hierarchy.
• Forms of Organizational Structures:
• Functional Organization
• Pure Project or Projectized Organization
• Matrix Organization
Functional Organization
CEO
Department Department Department Department
1 2 3 4
Project A Project X Project P
Project B
Functional Organization
• Project tasks are performed as part of functional department
• Suitable for small projects
• Head of the Department acts as Project Manager
• No designated Project Manager
• May have separate Project Coordinator with limited authority
• Members have lack of Global view of the project
Functional Organization
Advantages Disadvantages
• Flexibility: in the use of existing HR • Lack of project focus
• Specialization • Decision delays
• Access to functional knowledge, • Poor communication
experience and technical skills of
functional departments
Pure Project Organization
CEO
Department Department Department
Project A Project B
1 2 3
Pure Project Organization
• Project Organization is separate from functional units.
• The Project Manager has his own line organization with project
authority and responsibility.
• Projects are directly reported to the head of the organization.
• Problems while coordinating with departmental functions.
Pure Project Organization
Advantages Disadvantages
• Focus on project objectives • Duplication of facilities and efforts
• Clear authority • Lack of job security
• Effective communication • Project specific benefit may create
• Use of labor force as required conflict between project and non-
project staff
• Useful for large projects only
Matrix Organization
CEO
Department Department Department Department
1 2 3 4
Project Manager 1 D1 Staff D2 Staff D3 Staff D4 Staff
Project Manager 2 D1 Staff D2 Staff D3 Staff D4 Staff
Matrix Organization
• Combination of functional and pure project organization.
• Temporary project structure is imposed over functional design.
• Project team is assigned from the functional department.
• Project Manager heads the project.
Matrix Organization
Advantages Disadvantages
• Focus on project objectives • Multiple command
• Enhanced coordination – Project • Duplication of work for departments
Manager & Departmental Heads • Possibility for conflict between
• Flexibility functional department head and PM
• Efficient causing Power Struggle
• Team feeling • Requires high interpersonal skill
• Motivation • Expensive
• Opportunity for skill enhancement
• Free time for top level management
Matrix Organization
Types
• Strong Matrix • Weak Matrix • Balanced Matrix
• Project Managers are • PMs are simply • Power is balanced
more Powerful in Project Coordinator between PM and
terms of Authority having limited Functional manager
Authority • Staff are assigned for
• PM rules but
members are under • Functional manager project according to
functional managers assigns work PM project needs by PM
negotiates • Functional Manager
• PM expedites/ facilitates all support
facilitates the project to the project
Organizational Structure Influences on Projects
Balanced
Project Functional Weak Matrix Strong Matrix Pure Project
Matrix
Characteristics Organization Organization Organization Organization
Organization
PM’s Authority Little or None Limited Low/ Moderate Moderate/High High to Full
Involvement of
Team Member
Virtually None 0-25 % 15-60 % 50-95 % 85-100 %
from Overall
Organization
PM’s Role Part Time Part Time Full Time Full Time Full Time
Project Project Project Project Project
Common Title
Coordinator/ Coordinator/ Manager/ /Program /Program
for PM’s Role
Leader Leader Officer Manager Manager
PM’s
Administrative Part Time Part Time Full Time Full Time Full Time
Staff
Organizational Structure Influences on Projects
• Organization Structure also represents the top level view of
“Structure of Ownership” and “ Main Line of Reporting Order” for the
project.
• The organizational structure influences the project manager’s
authority, but project manager’s need to remember positive
consequences of other system approaches to project management
i.e. disciplined approach and definite approach.
• The organizational structure also help Project Manager to understand
the organizational hierarchy and managed the project in a disciplined
manner.
References
• Project Management, Harvey Maylor, 2003, Pearson India.
• Project Management in Nepal, Dr. Govind Ram Agrawal, 2005, M.K.
Publishers, Nepal.
• Project Management: A Systems Approach to Planning, Scheduling
and Controlling, Harold Kerzner, 1987, CBS Publishers, New Delhi.
• Lecture Notes of MSTIM, Pulchowk Campus by Dr. Rajendra Prasad
Adhikari.
• IT Project Management, NAAS, 2009.
Thank You
It was easy today!
