PROJECT ORGANISATION

This structure includes horizontal organisation units created to complete a long-term

project by a team of specialists from different areas created for that project.
" Activities of the project team coordinated by project manager
" Project team is temporary set up. Once the project is complete, team is disbanded.
. Project organisation is employed in aero-space, aircraft manufacture, construction and
professional areas like management consulting.
Suitability: when
Project has definite goals and specifications
Successful completion of project is crucial forfirm
Project offers unique/unfamiliar challenge
Project is complex with interdependent tasks
Assignment is to be completed within given time limit
MERITS DEMERITS
Timely completion of project without disturbing Professionals with different approach and interest,
normal routine. over specialisation danger
Focused attention on project that it demands Interdepartmental conflicts
maximum use of specialised knowledge Budget'control problenms
Encourages initiative and creativityA Insccurity/ Fear of loss of job
Members become versatile Difficulty in coordination
Fit for varied situations, contractors to accounting Frustration, pressure to finish project on time
to consultancy to advertising agencies
Project Organisation at a Glane
Merits Limitations Enginer
Oficercer ,R&D DivisionProiect
1. Focuses attentions on the specific projcct 1. Difficulty in decision-making
2. Maximum use of specialized knowledge 2. Presaure and uncertainty due to several Manager
Offi
and skills specialists
3. Flexibility of operations 3. Lack of motivation among specialists
4. Fixation of individual responsibility for 4. Difficulty in co-ordination. Accounts
results
5. Unity of Comunand.
Peonned
Project Vs. Product Structure
Point of difference Project Organization Product Organization
Dein
I. Basis Every project organized as a Every product line organized
separate unit. as a separate division ManufauringDivision-lProiect
2 Differentiation Various functional experts form Every product division has its
the project team production and marketing
facilities
3. Responsibility Lies with the project manager Lies with the product manager
4. Operational autonomy Very high High Ountity
Control
5. Coordination Very simple Sitnple Clerks
6. Economy Economical Expensive
7. Flexibility More Flexible Less Flexible Personnel
Job Security Low High
9. Time limits Specific starting and completion No specific tíme limits
dates for each project Testing
10. When useful Firns engaged in project work. Multi-product diversified firms.
 MATRIX/GRID ORGANISATION
Hybrid structure, combines: functional departmentation with pure project structure.
Functional structure is permanent feature. Project team (with a project manager responsible for overall
completion of project) created whenever specific project require high degree of technical skills and then
dissolved when project is completed
Functional departments create vertical structure. Project teams form horizontal chain. When these
vertical and horizontal lines intersect, they fom 2-D GRID/MATRIX
Usually used in aero-space/defense industries/ large complex onganisations require flexible
structures/public institutions like college

Merits Limitations
1. Tmely çompletion of.a project due to focused 1. Lack of unity of command.
attention, better plañining and effective control.
2 Flexibility in assigning people to projects 2 Confusing relationships, divided loyalty.
3, Motivation and development of professionals. 3. Difficulty in coordination.
4. Efficient and economical use of resources. 4 Joint decision-making.
s Delegation of authority casier. 5. High administrative costs.
6 High technical standards, creative solutions. 6. Higher interpersonal skills needed.

Project Organisation Vs. Matrix Organisation

Project Organisation Matrix Organisation

Pure product like structure 1. Combination of functional and product

structures
2 Low information processing 2. High information processing
3. Single command system 3. Multiple command system
4. Exclusive use of resources by each project 4. Project managers share resources with
manager functional heads
5. No such balancing involved 5. A way of balancing customers' need for
project completion and cost control with
organization's need for cconomic coopera
tion and development
6. No such power struggle 6. Possibility of power struggle between
functional heads and project managers.
7.. Suitable for a snall' number of large 7. Syitable for a large number of small
projects projects.
MANAGING DIRECTOR

Research and
Manufacturing Engineering
Development Accounting

Mánager Manufacturing Engineering Rescarch md -Accounting

Project A Group A Groap A Developanent A Group A
T
Manager Manufacturing Engineering Rescarch and Accounting
Project B Group B Group B Development B Group B
T
Manager Manufacturing Engincering Rescarch and Accounting
Projcct C Group C Group C Developmént C Group C
Role of project manager:
1. Overall in-charge, lays down strategy Guidelines to increase effectiveness
2. Determines efforts/resources required
3. Determines time and cost
Objectives, scope, functions of project should
be clearly defined
schedules/budget 1. Every project should be properly organised
4. Coordinates activities of functional by appointing full time, experienced project
group manager
Role of functional manager: 2. Project manager must adopt new approach to
1. Exercises line authority over his job:
subordinates Orientation towards human resource
2. Responsible for one functional area management instead of functional approach
3. Assigns specific individuals to various Acceptance of purposeful conflicts
projects Realization that project management is
4. Evaluates performance of subordinates dynamic activity

NETWORK ORGANISAION
In network structure principal firm subcontracts its functions to other organizations and
coordinates their activities
services are outsourced to separate forms that Fitm
are connected electronically to central office Accounting Distribution
hub organization maintain control over work Fim Firm
processed by various subcontractors Core
Firm
Also called virtual/boundary less
organization because of absence of horizontal Legal
Firm
and vertical boundaries, no external barriers
Desiga
between organization and customers, suppliers Fim

Decentralized structure, power is distributed

among independent members of the network
suitable for organizations desiring to compete in global marketplace wanting to maintain
flexibility to deal with the dynamic changes of the global economy
- Motorola, Coca-Cola, Apple Computers are e.g.
Features: borderless, flat organisation, ITC backbone, complementary resources for
synergy, informal communication
Advantages Disadvantages
1. The overhead expenses are low due to 1. Direct Control over operations limited.
lean structure.
2. There is flexibility of control due to 2. Coordination of various activities and sub
very few employees at headquarters contractors becomes dificult.
3, There is choice of subcontractors on 3. With change in sub-contractors new relation
the basis of quality and control ships need to be developed.
4. Sub-contractors all over the world can 4. Employes may get demoivated and frustrated
be lócated. due to poor performance of sub-contractors.
TEAM BASED STRUCTURE
This structure groups employees according to teams.
Team is created by bringing together people with complementary skills working
towards common goal
This structure reduces traditional hierarchy, focus on problems solving, cooperation t
Team is disbanded after a project or it may continue to change/ adapt new objectives
Provides flexibility to environmental changes, allows quick decision making, better
flow of information hence useful for agile organizations
MERITS DEMERITS
Flexibility in decision making Teams may start compete with cach other
Diverse skills, synergy Lack of individual motivators coz judged only as a
whole team
Free flow of information so better lateral movenent in career path not desirable for
communication employees looking for promotion
Improves employee Diverse perspectives in a team, inter personal
productivity/performance problems may arise
Self-directed teams, less admn costs Shield under-performingemployees