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Chapter 13 Types of Project Organizations

Chapter 13 Types of Project Organizations. Learning Objectives. The characteristics of the three types of organization structures: - functional - project - matrix The advantages and disadvantages of each. 2. 2. 2. Real World Example. Vignette: The Customer is Always Right

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Chapter 13 Types of Project Organizations

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  1. Chapter 13Types of Project Organizations

  2. Learning Objectives • The characteristics of the three types of organization structures: - functional - project - matrix • The advantages and disadvantages of each 2 2 2

  3. Real World Example • Vignette: The Customer is Always Right • NCR Financial Solutions Group Ltd., Dundee, Scotland • The program management office (PMO) realized that they were missing internal customer commitments and projects goals were not being met. • The PMO determined three levels of internal customer bases and four types of external customers. They started a rigorous training program for project managers to improve their skillset and receive PMI certification. • After making these improvements the PMO has seen a 30-40 % reduction in cycle time over a five-year period. 3

  4. Real World Example • Vignette: What’s Your Organizational Quotient? • It is critical to understand the collaborations, relationships, and networks of the informal organization. • “OQ” is the ability to balance both formal and informal power structures • Some of the issues that are common among most companies are: • Need for ways to energize a sluggish working environment. • Problem in grooming future leadership. • Existence of poor social networks and communications among executive leadership teams. • Lack of informal social networks / ties between employee teams. 4

  5. Solution: • Companies: • need to resist the urge to try to micromanage employee relationships. • should not completely rely on power structure. • senior executives and project managers should try to create loose parameters around informal organizations that operate independently. • must locate the right people to place in project management positions. 5

  6. Functional-Type Organization • Used in businesses that sell and produce standard products. • Groups consist of individuals performing the same function. • Periodically undertake in-house projects. • Team members can be assigned to the project. • Team members continue regular functional jobs. • Project manager does not have complete authority over team. 6

  7. FIGURE 13.1 Functional Organization Structure 7

  8. Project-Type Organization • Used in companies in the project business, not selling products. • Work on multiple projects at a time. • Project team is dedicated to one project. • Project manager has complete authority over team. • Each project team tends to be isolated. 8

  9. FIGURE 13.2 Project Organization Structure 9

  10. Matrix-Type Organization • A mix of functional and project organization structures. • Used in companies that work on multiple projects at a time. • Provides project and customer focus. • Retains functional expertise. • Individuals can be assigned to various types of projects. 10

  11. Matrix-Type Organization (Cont.) • Both project managers and functional managers have responsibilities. • The Project Manager is the intermediary between customer and company. • The Functional Manager decides how tasks will be accomplished. 11

  12. FIGURE 13.3 Matrix Organization Structure 12

  13. Functional Organization Advantages • Reduces duplication and overlap of activities. • Provides specialization and functional excellence. 13

  14. Functional Organization Disadvantages • Can be insular. • Teamwork is not emphasized. • Decisions may be parochial. • Structure can slow communication, problem solving and decision making. • Lack of customer focus. • Stronger allegiance to function than project. 14

  15. Project Organization Advantages • Team has full control over resources. • Organization is highly responsive to customer. 15

  16. Project Organization Disadvantages • Can be cost inefficient. • Tendency to stretch out work during slow periods. • Potential for duplication on concurrent projects. • Low level of knowledge transfer. • No functional “home”. • People may be laid off at the end of the project. 16

  17. Matrix Organization Advantages • Allows efficient utilization of resources. • Individuals can be moved among projects. • Provides a core of functional expertise. • Facilitates information flow. • Learning and knowledge transfer. • Improved communication. • Customer focused. 17

  18. Matrix Organization Disadvantages • Team members have a dual reporting relationship. • A proper balance of power must be established between project and functional managers. • Conflicts regarding priorities can arise between managers. 18

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