Types of Project Organisation structures, Advantages and their Disadvantages

TYPES OF PROJECT ORGANIZATIONAL STRUCTURES.

Basically, below are the commonest types or forms of project organization structures:

(a) Simple project organizational structure.

It is a type of organizational structure where only a few product lines or very limited activities are carried out and decisions are made by one person in authority without any consultations.

In this structure the owner of the business and a few employees with the arrangement of tasks, responsibilities and communication are highly informal and accomplished through direct supervision.

In other words, the organization is run by the personal control of an individual.

ADVANTAGES.

  • Easier to budget and control the project activities as only a fewer product lines and limited activities are carried out.
  • Specialists can be easily grouped together to share their competences and experiences.
  • Available technical staff can be easily used in other different projects or other activities where their inputs are critically required.
  • Provides broader manpower base to work with in any of the project obligations.
  • Provides continuity in the functional disciplines/areas such as policies, procedures, processes etc.
  • Provides proper control over personnel since each employee has only one immediate supervisor to report to.
  • There is effective flow of information for timely decision making since channels of communication are well established.
  • The project activities are easily prioritized when need arises.

DISADVANTAGES.

  • No individual staff is directly responsible for the total project activities as each expert only handles his or her area.
  • Does not provide the project oriented emphasis required to accomplish the project tasks.
  • Coordination of project tasks may become complex as no formal meetings are held to handle project issues.
  • Decisions are not arrived at through consensus as only influential individuals take the centre stage and steal the show.
  • Nobody can be held responsible for incompetent implementation of the project tasks.
  • Motivation and innovation are not given special attention.
  • Responsiveness to the needs of the project is very slow or even nil at times.

(b) Functional project organizational structure.

For functionally organized projects, the projects should be assigned to the functional unit that has the biggest interest in ensuring its success or can be most helpful in implementing it.

It is a structure in which the tasks, people and technologies necessary to do the work of the business are divided into separate functional groups eg. Procurement,finance/accounting, marketing, operations, engineering etc. with increasingly formal procedures for coordinating and integrating their activities to provide the project products and services.

It should be noted further that only individuals with what it takes or relevant expertise in a particular project should be assigned responsibilities of managing it.

In other words, the organization is based on the primary activities that have to be undertaken by departments of functional units eg. Production, finance/accounts, marketing, engineering, supply chain etc.

ADVANTAGES.

The advantages of using functional elements of the parent organization as administrative home for a project include but not limited to:

  • There is maximum flexibility in the use of the available technical staff. Experts may be temporarily assigned to the project, make the required contributions and immediately be reassigned to their normal and routine work.
  • High efficiency due to specialization.
  • Day to day operations or activities are easily and effectively delegated.
  • Centralized control of strategic decisions is easily and effectively retained.
  • Tightly links structure to strategy by designing key activities as separate units.
  • Available technical staff may be utilized in many different projects. Individual experts may be switched back and forth between the different projects with relative ease.
  • Available functional specialists may be grouped to share knowledge and experience. Such expert individuals may provide potential source of creative and synergistic solutions to technical problems.
  • There is technological continuity when individual experts choose to leave the project and even the organization. This also ensures the procedural, administrative and overall policy continuity that results when the project is maintained by the parent organization.
  • Provides the normal path of advancement for individual technical staff whose expertise is in the functional area. The project may be a source of glory for those who participate in its successful completion.

DISADVANTAGES.

Just as there are advantages to housing the project in a functional area, there are also disadvantages namely:

  • The client is not the focus of the project activities and concern. The functional unit has its own routine work to do, which usually takes precedence over the work of the project and hence over the interests of the client.
  • There is orientation toward the particular activities of the project. It is not usually problem oriented in the sense that a project should be successful.
  • No particular individuals are given full responsibilities for the project hence exposing the project to risks. This failure to pinpoint responsibility usually means that the Project Manager is made accountable for some parts of the project, but another person is made accountable for one or more other parts. Little imagination is required to forecast the lack of coordination and chaos that result.
  • Response to client needs is slow and arduous. There are often several layers of management between the project and the client.
  • Risk of sub-optimizing the project. Project issues that are directly within the interest area of the functional home may be dealt with carefully, but those outside normal interest areas may be given attention if not totally ignored.
  • Risk of de-motivating technical staff assigned to the project. The project is not in the mainstream of activities and interest, and some project team members may view service on the project as a professional diversion.
  • Holistic approach to the project is not given sufficient attention. Complex and emergency project activities are not given special attention deserved unless they are designed as a totality. Sharing of new information is slow and difficult at best.
  • May promote narrow specialization and rivalry or conflicts if not effectively managed.
  • May create difficulties in functional coordination and inter-functional decision making if not effectively controlled.
  • May limit development of general managers.
  • May cost more to carry out a function than it does outside the organization unless outsourced.

(c) Pure project organizational structure.

In this type of structure, the project is separated from the rest of the parent organization system. It becomes a self-contained unit with its own full time key technical staff, its own administration, its own resources, its own reports and its own detailed control procedures.

ADVANTAGES.

  • The Project Manager has full authority over the project and enjoys complete work force devoted to the project.
  • All project team members are directly responsible to the Project Manager. There are no functional specialists whose permission must be sought or whose advice must be heeded before making final technical decisions. The Project Manager is truly the project director.
  • Project Manager communicates directly with senior corporate management. The shortened communication lines result in faster information sharing with minimal failures.
  • Where there are several successive projects of a similar kind, the structure can maintain a more or less permanent cadre of experts who develop considerable skills in specific technologies. Indeed, the existence of suck skill pools can easily attract customers to the parent organization.
  • Project team members are more committed to the project. Motivation is high and acts to foster the task orientation.
  • Decisions are made much faster due centralized authority. The entire project organization can react more rapidly to the requirements of the client and needs of senior corporate management.
  • There is solid unity of command. There is little doubt that the quality of life of subordinates is enhanced when each subordinate has one, and only one, boss.
  • This structure is simple and flexible, which makes it relatively easy to understand and to implement.
  • The structure supports holistic approach to the project. The dangers of focusing on and optimizing the project’s subsystems rather than the total project are often a major cause of technical failure in projects.

DISADVANTAGES.

While the advantages of the pure organization structure make powerful arguments favouring this structure, its disadvantages are also serious:

  • Risk of overstaffing as such staff are not shared across other projects or parent organizational activities.
  • Equipment and technical assistance are stockpiled in order to be certain that they will be available when needed. Personnel with critical technical skills may be hired by the project when they are available rather than when they are needed. Such staff also tend be maintained on the project longer than needed, just in case.
  • Risk of technological changes rendering usefulness of some of the skills outlived. Though individuals engaged with the project activities develop considerable depth in the technology of the project, they tend to fall behind in other areas of their technical expertise in projects characterized as high technology.
  • Inconsistency in the way in which policies and procedures are carried out is fostered. There is tendency of not understanding problems due to easy excuse for ignoring dicta from the head office.
  • The project takes a life of its own. Team members tend to form strong attachments to the project and to each other. Friendly rivalry may become bitter competition and political infighting between projects is common.
  • Risk of worry about life after the project ends. Typically, there is considerable uncertainty about what will happen when the project is completed, whether project team members will be laid off or assigned to low-prestige work or break up altogether and this leads to the fear of unknown.

(D)Matrix project organizational structure.

This is a combination of both functional and pure organization structures. It attempts to couple some of the advantages of pure organization structure with some of the desirable features of functional organization structure in order to avoid some of the disadvantages of each and explore maximum benefits of each.

This combination of structures may take the forms of product and geographical divisions or functional and divisional structures operating in tandem.

It is for long term projects.

ADVANTAGES.

  • The project is the point of emphasis. The Project Manager takes responsibility for managing the project, for bringing it on time, within cost and to specification.
  • The project has reasonable access to the entire reservoir of technology in all functional divisions. The talents of the functional divisions are available to all the projects, thus sharply reducing the duplication required by the pure project organization structure.
  • There is less anxiety about what happens when the project is completed than is typical of the pure project organization structure. Even though project team members tend to develop a strong attachment for the project, they also feel close to their functional home.
  • The response to client needs is rapid and flexible. A project nested within an operational organization must adapt to the needs of the parent organization if the project has to survive.
  • The project easily accesses representatives from the administrative units of the parent organization. As a result, consistency with policies, practices and procedures of the parent organization are preserved.
  • It allows a better organization-wide balance of resources to achieve the several different time/cost/performance targets of the individual projects, where several projects are simultaneously undertaken. This holistic approach to the total organization’s needs allows projects to be staffed and scheduled in order to optimize total system performance rather than to achieve the goals of one project at the expense of others.
  • It covers a wide range of project activities in between. Some functional units might provide human resources while others only supply capacity. This way, it easier and more effective to adapt to a wide variety of projects and subject to the needs, abilities and desires of the parent organization.

DISADVANTAGES.

  • The balance of power is more delicate. There is no specific office solely responsible for overall final decision making as power and authority are shared by different offices depending on specific project deliverables. When doubts exists about who is in-charge, the project deliverables suffer. If the project is successful and highly visible, doubt about who is in-charge can foster internal infighting for the credit and glory. If the project is a failure, internal infighting will be even more brutal to avoid blame.
  • Balancing time, cost and performance between several projects is very demanding. Monitoring set of projects to achieve good results is a tough job. Further, the movement of resources from project to project in order to satisfy the several schedules can easily leading internal conflicts or infighting among the several Project Managers handling different projects, all of who tend to be more keen on ensuring success for their individual projects than in helping the total system to optimize organization-wide goals.
  • Severe problems of shutting down projects. The projects, having individual identities, tend to resist close out even when necessary.
  • The division of authority and responsibility is very complex. Negotiating for resources, technical assistance, delivery dates etc. is so complex that specialized and complex negotiating skills are imperative.
  • This type or form of project organization structure violates the management principle of unity of command. Project team members have different bosses to report to. This reporting line causes discomfort and de-motivation among the low level project team members.

(E) Mixed or team-based project organizational structure.

In many ways mixed project organization structure is not distinguishable from matrix project organization structure, but it is typically used for small, short-term projects where the formation of a full-fledged matrix structure is not justified.

It is an attempt to combine both horizontal and vertical coordination through structuring people into cross-functional teams, Mixed project organization structure is simply a lower version of matrix organization structure. If the number or size of the projects being staffed under mixed project organization structure grows, a shift to a formal matrix organization structure naturally and automatically evolves.

NB:The most important thing to note is that mixed project organization structure has the same, similar and identical advantages and disadvantages as matrix project organization structure as only project period and size differentiate the two with all other variables or finer details remaining the same.


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