1. Chapter 4
Organizing Projects

2. Types of Organizations
Functional organization
Pure Project organization
Matrix organization
Mixed organization

3. Functional organization
Functional organization organizations are those that are subdivided into functional units, i.e. marketing unit, finance unit, HR unit etc.
For Functionally organization projects, the project is assigned to the Functional unit that has the most interest in ensuing its success or can be most helpful in implementing it.

4. Advantages and disadvantages of projects in Functional organization
There is maximum flexibility in the use of staff.
Individuals experts can be utilized by many different projects.
Specialists in the division can be grouped to share knowledge and experience.
The Functional division also serves as a base of technological continuity when individual choose to leave the project and even the parent firm.
The Functional division contains the normal path of advancement for individuals whose expertise is in the Functional area.

5. Disadvantages
A primary disadvantage is this arrangement is that that the client is not the focus of activity and concern.
The functional division tends to be oriented towards the activities particularly to its function.
Occasionally in Functionally organized projects, no individual is given full responsibility for the project.
The same reasons that lead to lack of coordinated efforts tends to make response to client needs slow and arduous.
There is a tendency to sub optimize the project.
The motivation of the people assigned to the project tends to be weak
Such an organizational arrangement does not facilitate holistic approach. Cross-communication and sharing of knowledge is slow and difficult to its best.

6. Pure Project Organization
An organization in which the project is separated from the rest of the parent system.
It becomes a self-contained unit with its own technical staff, its administration, tied to the parent firm by the tenuous strands of periodic progress reports and oversight.
Some parent organizations prescribe administrative, financial , personnel and control procedures in detail. Others allow the project total freedom within the final accountability.

7. Advantages and disadvantages of the Pure Project Organization.
The project manager has full line authority over the project
All members of the project work force are directly responsible to the PM.
When the project is removed from the functional division, the lines of communication are shortened.
When there are several successive projects of a similar kind, the pure project organization can manipulate a more or less permanent cadre of experts who develop considerable skill in specific technologies.
The project team that has a strong and separate identity of its own tends to develop a high level of commitment from its members.

8. Cont…
Because authority is centralized, the ability to make swift decisions is greatly enhanced. The entire project organization can react more rapidly to the requirements of the client and the needs of senior management.
Unity of command exists.
Pure project organization are structurally simple and flexible, which makes them relatively easy to understand and to implement.
The organizational structure tends to support a holistic approach to the project.

9. Disadvantages
When the parent organization takes on several projects, it is common for each on to be fully staffed.
In fact, the needs to ensure access to technical knowledge and skills result in an attempt by the Pm to stockpile equipment and technical assistance in order to certain that it will be available when needed.
Though individuals Engaged with project develop considerable depth in the technology of the project, they tend to fall behind in other areas of their technical expertise
Pure project group seems to foster inconsistency in the way in which policies and procedures are carried out.
In pure project organizations, the project takes on a life of its own.
Another symptoms of projectitis is the worry about life after the project ends.

10. The Matrix Organization
The matrix organization is the combination of the 2: it is pure project organization overlaid on the functional divisions of the parent firm.
A matrix organization can take on a wide variety of specific forms, depending on which of the 2 extremes ( functional or pure project).
The strong matrix resembles the pure project organization
The weak matrix resemble functional organization.
Balanced matrix lies in the middle of the 2 extremes.
The matrix is not separated from its parent organization
In matrix organization the Pm controls when and what the se people will do, while functional managers control who will be assigned to the project and what technology will be used.

11. ADVANTAGES OF MATRIX
The project is the point of emphasis the PM, takes responsibility for managing the project.
Because the project organization is overlaid on the functional divisions, temporarily drawing labor and talent from them, the project has reasonable access to the entire reservoir of technology in all functional divisions.
There is less anxiety about what happens when the project is completed than is typical of the pure project organization.
Response to clients needs is as rapid as in the pure project case, and the matrix organization is just flexible.
With matrix management, the project will have- or have access to – representatives from the administrative units of parent firm

12. Contd
Where there are several projects simultaneously under way, matrix organization allows a better company wide balance of resources to achieve the several different time/cost performance targets of individual projects.
While pure project and functional organization represents extreme of the organizational spectrum, matrix organization cover a wide range in between

13. DISADVANTAGES OF MATRIX
In the case of functionally organized projects, there is no doubt that the functional division is the focus of decision- making power in the pure project case, it is clear that the PM is the power center of the project. With matrix organizations, the power is more balanced. Often, the balance is fairly delicate.
While the ability to balance time, cost, and performance between several projects is an advantage of matrix organization, the ability has its dark side.
For strong matrices, problems associated with shutting down a project are almost as severe as those in pure project organizations.
In matrix-organized projects, the PM controls administrative decisions and the functional heads control technological decisions.
Matrix management violates the management principle of unity of command.

14. MIXED ORGANIZATIONAL SYSTREMS
Divisionalization is a means of dividing a large and monolithic organization into smaller, more flexible units. This enables parent organization to capture some of small, specialized organizational units while retaining some of the advantages that come with larger size.
Organizing projects by projects involves establishing each product project as a relatively autonomous, integrated element within the organization as a whole.
Pure functional and pure project organization may coexist in a firm. This results in the mixed form
This form is rarely observed with the purity we have depicted here, yet it is not uncommon. What is done, instead, is to spin off the large successful long run projects as subsidiaries or independent operations.

15. Contd
Many firms nurture young, unstable, smaller projects under the wing of an existing division, then wean them to pure projects with their own identity, and finally allow the formation of a venture team- or, for a larger project, venture firm- within the parent company