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Functional Organization

• Different segments of the project are delegated to respective functional units. • Coordination is maintained through normal management channels. • Used when the interest of one functional area dominates the project or one functional area has a dominant interest in the project's success.

Organization (Form) Considerations

• How important is the project to the firm's success? • What percentage of core work involves projects? • What level of resources (human and physical) are available?

Organizing Projects: Matrix Structure

• Hybrid organizational structure (matrix) is overlaid on the normal functional structure. Two chains of command (functional and project) Project participants report simultaneously to both functional and project managers. • Matrix structure optimizes the use of resources. Allows for participation on multiple projects while performing normal functional duties Achieves a greater integration of expertise and project requirements

Dedicated Team Structure

• Teams operate as separate units under the leadership of a full-time project manager. • In a projectized organization where projects are the dominant form of business, functional departments are responsible for providing support for its teams.

Choosing an Appropriate Project Management Structure

• The best system balances the needs of the project with the needs of the organization.

Challenges to Organizing Projects

• The uniqueness and short duration of projects relative to ongoing longer-term organizational activities • The multidisciplinary and cross-functional nature of projects creates authority and responsibility dilemmas.

Project Organization: Matrix Form

Advantages • Efficient • Strong Project Focus • Easier Post-Project Transition • Flexible Disadvantages • Dysfunctional Conflict • Infighting • Stressful • Slow

Functional Organization of Projects

Advantages • No Structural Change • Flexibility • In-Depth Expertise • Easy Post-Project Transition Disadvantages • Lack of Focus • Poor Integration • Slow • Lack of Ownership

Project Organization: Dedicated Team

Advantages • Simple • Fast • Cohesive • Cross-Functional Integration Disadvantages • Expensive • Internal Strife • Limited Technological Expertise • Difficult Post-Project Transition

Most Common Structures

Functional Dedicated Matrix

Different Matrix Forms

Functional (also Weak or Lightweight) Form • Matrices in which the authority of the functional manager predominates and the project manager has indirect authority Balance (or Middleweight) Form • The traditional matrix form in which the project manager sets the overall plan and the functional manager determines how the work is to be done Strong (Heavyweight) Form • Resembles a project team in which the project manager has broader control and functional departments act as subcontractors to the project