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Chapter # 3 Project & Organizational Structure
ORGANIZATIONAL STRUCTURE Three Basic Organization Structure • Functional Structure • Project Structure • Matrix Structure
FUNCTIONAL ORGANIZATIONAL STRUCTURE • Functional organization structure in which authority rests with the functional heads; the structure is sectioned by departmental groups. • Most Common & Traditional • Activities are assigned based on expertise
FUNCTIONAL ORGANIZATIONAL STRUCTURE C. E. O VP Finance VP Marketing VP Manufacturing VP Personnel
FUNCTIONAL ORGANIZATIONAL STRUCTURE
FUNCTIONAL ORGANIZATIONAL STRUCTURE Project Coordination Red boxes represent staff engaged in project activities
FUNCTIONAL ORGANIZATIONAL STRUCTURE Advantages • Simple • Lines of communication within department are well established • Clearly defined responsibility and authority for work within the departments
FUNCTIONAL ORGANIZATIONAL STRUCTURE Disadvantages • Complete Responsibility for the entire project missing because the functional units are responsible for their own activities. • Competition & conflict between functional departments • Department work may take priority over project work
PROJECT ORGANIZATION STRUCTURE • Suitable to projects that are very large & complex and/or geographically located away from the parent organization.
PROJECT ORGANIZATION STRUCTURE
PROJECT ORGANIZATION STRUCTURE Advantages • The project manager has full line authority over the project • Because the authority is centralized, the ability to make a swift decision is enhanced • Accountability is clearly placed in one person
PROJECT ORGANIZATION STRUCTURE Disadvantages • Uncertainty about job after the project • Difficult to share individuals/expertise across projects
MATRIX ORGANIZATION STRUCTURE An organization structure that assigns specialists from different functional departments to work on one or more projects being led by project managers.
MATRIX ORGANIZATION STRUCTURE Advantages • Authority and responsibility are shared • Stress is distributed among the team
MATRIX ORGANIZATION STRUCTURE Disadvantages PM controls administrative decisions. functional managers control who will be assigned to the project, This thing may create conflict.