Project Organization Structure

Project organization structure is used to complete a project or task.  The project manager has people from several functional departments such as production, finance, marketing and so on.  Specialists are drawn to perform their respective roles in the total project.  The project organization structure is derived not from some principles but from the job requirements.  Project organization structure brings together people of different expertise for the completion of the project.  As soon as the project is completed, the experts are returned to their original departments in the head office.  For example, in a bridge construction project, the engineers, financial manager, human resources people and other related people are brought to the sit of the project where project organization, the structure and process, is developed.  The people are organized and allocated specialized jobs by the Project manager who will be the top person managing the project by utilizing all the resources.  As soon as the project is completed, the employees are returned to the head office or transferred to another project.  Specialists in each project will differ from project to project.

Project Organization Structure

Project organization structure is also called a grid or matrix organization, as the project and functional organization go on simultaneously.  The function departments have authority on vertical flows whereas the people are governed by the project manager.  The responsibility flows vertically.  The project manager has to coordinate the functions of all the personnel working under him. The project manager also returns the personnel to the head office or shifts them to another project after completion of the project on hand.  The project organization structure is an effective way of pooling skilled and experienced people to perform a specific project within a given time and budget.  This type of organization reduces the burden of the main organization while concentrating on a new project.

Project organization like product functional organization concentrates on quality of products. Project organization is useful for meeting the buyer’s specific requirements of building factors, structure, plan and machinery, etc.  The product innovation, research and development and other specific requirements are easily possible with project organization.  Since the project organization is a one-time task, it is definable in terms of quality, cost, scope, job agreement, contract and son on.  It helps achieve economy of scale, quality projects and timely performance and completion of jobs, although much of the success depends on the attitude and experience of the project manager who has to evolve team spirit amongst the employees engaged in the project.  The conflict between horizontal and vertical authorities should be properly resolved by the project managers to get benefits of project organization.  However, the project manager has no authority to punish erring employees or reward efficient employees.  He may however inform the top executives about their performances, who can then take necessary action for and against the employees.

The success and failure of project organization structure depends upon the relationship of authority and responsibility between the project manager and the top executive while managing the specialist employees of the organization.  The project management is given facilities to contact project managers of different projects to highlight the needs of organization and for the success of management.  If the relationship between the functional members and project members are unclear, many problems may crop up and the project organization will not be able to achieve its objectives.  The responsibility of the project manager cannot be understated. He has to coordinate and control the activities of the project organization sincerely and systematically.

Credit: Principles of Management and Organization Behavior-MGU

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