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CHAPTER 3:
ORGANIZATION:
STRUCTURE & CULTURE

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3–2
 Project Management Structures
• Challenges to Organizing Projects
– The uniqueness & short duration of Ps. relative to ongoing
longer-term organizational activities (short >< long)
– The multi-disciplinary & cross-functional nature of Ps.
creates authority & responsibility dilemmas.

• Choosing an Appropriate PM. Structure

– The best system balances
the needs of the P. with the needs of the
organization (balance >< change).

3–3
 Project Management Structures
• Organizing Projects: Functional organization
– Different segments of the project are delegated to
respective functional units (segment # function).
– Coordination is maintained through normal management
channels (co-ordination >< separation).
– Used when the interest of one functional area dominates
the project or one functional area has a dominant interest in
the project’s success (functional area >< project’s success).

3–4
Functional Organizations

FIGURE 3.1

3–5
 Functional Organization of Projects
• Advantages • Disadvantages
– No Structural Change – Lack of Focus
– Flexibility – Poor Integration
– In-Depth Expertise – Slow
– Easy Post-Project – Lack of Ownership
Transition

3–6
 Project Management Structures (cont’d)
• Organizing Projects: Dedicated Teams
–Teams operate as separated units under the leadership
of a full-time P. manager.

– In a projectized organization where Ps. are the dominant

form of business, functional departments are responsible
for providing support for its teams.

3–7
Dedicated Project Team

FIGURE 3.2

3–8
 Project Organization: Dedicated Team
• Advantages • Disadvantages
– Simple – Expensive
– Fast – Internal Strife
– Cohesive – Limited Technological
Expertise
– Cross-Functional
Integration – Difficult Post-Project
Transition

3–9
Project Organizational Structure

FIGURE 3.3

3–10
 Project Management Structures (cont’d)
• Organizing Projects: Matrix Structure
– Hybrid organizational structure (matrix) is overlaid on the
normal functional structure.
• Two chains of command (functional & 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.

3–11
Matrix Organization Structure

FIGURE 3.4

3–12
 Division of Project Manager & Functional
Manager Responsibilities in a Matrix Structure

Project Manager Negotiated Issues

What has to be done? Who will do the task?
When should the task be done? Where will the task be done?
How much money is available to do the task? Why will the task be done?
How well has the total project been done? Is the task satisfactorily completed?

Functional Manager
How will it be done?
How will the project involvement impact normal functional activities?
How well has the functional input been integrated?

TABLE 3.1

3–13
 Different Matrix Forms
• Functional (also Weak or Light-weight) Form
– Matrices in which the authority of the functional manager
pre-dominates & the project manager has indirect authority.

• Balance (or Middle-weight) Form

–The traditional matrix form in which the project manager
sets the overall plan & the functional manager determines
how work to be done.

• Strong (Heavy-weight) Form

– Re-sembles a project team in which the project manager
has broader control & functional departments act as sub-
contractors to the project.
3–14
 Project Organization: Matrix Form
• Advantages • Disadvantages
– Efficient – Dysfunctional Conflict
– Strong Project Focus – Infighting
– Easier Post-Project – Stressful
Transition
– Slow
– Flexible

3–15
 Choosing the Appropriate Project
Management Structure

• Organization (Form) Considerations

– How important is the project to the firm’s success?
– What percentage of core work involves projects?
– What level of resources (human & physical) are available?

3–20
 Choosing the Appropriate Project
Management Structure (cont’d)

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

3–21
 Organizational Culture
• Organizational Culture Defined
– A system of shared norms, beliefs, values, & assumptions
which bind people together, thereby creating shared
meanings.

– The “personality” of the organization that sets it apart from

other organizations.
• Provides a sense of identify to its members.
• Helps legitimize the management system of the organization.
• Clarifies & reinforces standards of behavior.

3–22
Key Dimensions Defining an Organization’s Culture

FIGURE 3.7

3–23
 Identifying Cultural Characteristics
• Study the physical characteristics of an organization.

• Read about the organization.

• Observe how people interact within the organization.

• Interpret stories & folklore surrounding the

organization.

3–24
Organizational Culture Diagnosis Worksheet

FIGURE 3.8

3–25
 Implications of Organizational Culture
for Organizing Projects

• Challenges for P Managers in Navigating

Organizational Cultures
– Interacting with the culture & subcultures of the parent
organization
– Interacting with the project’s clients or customer
organizations
– Interacting with other organizations
connected to the project

3–26
Cultural Dimensions of an Organization Supportive
of Project Management

FIGURE 3.9

3–27
 Key Terms

Balanced matrix
Dedicated project team
Strong matrix
Matrix
Organizational culture
Weak matrix
Projectitis
Projectized organization
Network organization

3–28
Organization of Product Development Projects at ORION

FIGURE C3.1

3–29
Traditional Master Plan at ORION

FIGURE C3.2

3–30
Proposed Project Organization for the Jaguar Project

FIGURE C3.3
3–31
Jaguar Master Plan

FIGURE C3.4

3–32
Mechanisms for Sustaining Organizational Culture

FIGURE A3.1

3–33