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1

Project Management Structures

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.

Choosing an Appropriate Project Management Structure
The best system balances the needs of the project with the needs of the organization.

Organizing Projects: 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.

2

Benefits of Cohesive Management

Builds discipline into the project selection process.
Links project selection to strategic metrics.
Prioritizes project proposals across a common set of criteria, rather than on politics or emotion.
Allocates resources to projects that align with strategic direction.
Balances risk across all projects.
Justifies abandoning projects that do not support strategy.
Improves communication and supports agreement on project goals.

3

Functional Organization of Projects
Advantages

No structural change
Flexibility
In-depth expertise
Easy post-project transition

4

Functional Organization of Projects
Disadvantages

Lack of focus
Poor integration
Slow
Lack of ownership

5

Scenario Planning: a Supplement to Strategic Planning

* Social, Technological, Environmental, Economic, Political = STEEP

Clarifying your core business and assessing drivers of change in the industry environment

Developing potential scenarios and assessing the impact of STEEP* factors

Developing potential contingency strategies and best future strategic options

Identifying early indicators and establishing triggers for strategic action

This is a tool for RISK ASSESSMENT

6

Project Management Structures (cont’d)
Organizing Projects: Dedicated Teams

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.

7

Project Organization: Dedicated Team
Advantages

Simple
Fast
Cohesive
Cross-Functional Integration

8

Project Organization: Dedicated Team
Disadvantages

Expensive
Internal Strife
Limited Technological Expertise
Difficult Post-Project Transition

9

Project Management Structures
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.

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Different Matrix Forms

Weak Form
Balanced Form
Strong Form

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Weak Form

The authority of the functional manager predominates and the project manager has indirect authority.

12

Balanced Form

The project manager sets the overall plan and the functional manager determines how work to be done.

13

Strong Form

The project manager has broader control and functional departments act as subcontractors to the project.

14

Project Organization: Matrix Form
Advantages

Efficient
Strong Project Focus
Easier Post-Project Transition
Flexible

15

Project Organization: Matrix Form
Disadvantages

Dysfunctional Conflict
Infighting
Stressful
Slow

16

What Is the Right Project Management Structure?

Project Considerations
Size of project
Strategic importance
Novelty and need for innovation
Need for integration (number of departments involved)
Environmental complexity (number of external interfaces)
Budget and time constraints
Stability of resource requirements

17

Organizational Culture

A system of shared norms, beliefs, values, and assumptions that bind people together, creating shared meanings
The “personality” of the organization that sets it apart from other organizations

18

Defining Organizational Culture

Physical Characteristics – architecture, structure, dress code
Public Documents – annual reports, newsletters
Behaviour – pace of work, interaction, values
Folklore – stories, legends, perceptions, heroes

19

The Essence of Organizational Culture

Member identity
Team emphasis
Management focus
Unit integration
Control
Risk tolerance
Reward criteria
Conflict tolerance
Means vs. End orientation
Open systems focus

20

Implications of Organizational Culture

Navigational challenges for Project Managers
Interacting with the culture and subcultures of the parent organization
Interacting with the project’s clients or customer organizations
Interacting with other organizations connected to the project