Project Organization: Structures and Principles
**Why Organize a Project**
- Organization helps managers:
- Minimize weaknesses that consume financial resources.
- Avoid duplication of effort, matching jobs with people.
- Avoid the lack of opportunity to acquire a variety of skills that can lead to professional growth of team members.
**The Process of Organization**
- This is a process that establishes orderly, efficient use of project resources to achieve its goals.
- It relates to the activity of establishing communication, creating, and maintaining relationships between all features.
- When key stakeholders participate in the process of organization, they are encouraged to accept and commit to the project requirements.
“The project requires organizational decision-making that identifies the environmental forces, strategic choices, technological factors, the location, the role of each resource unit within the group, responsibilities, and authorities” (Maximiano, 2002)
**A Good Organizational Design**
A good organizational design can produce the following results:
- Facilitate information flow and decision-making.
- Display channels of command and formal communication networks.
- Clarify the necessary levels of coordination between departments.
- Indicate the areas of delegation and cooperation.
**Principles of Project Organization**
Principle of unity of command: Requires that each element of the organization respond to only one manager.
Authority and responsibility: The person responsible for doing a particular task should have the authority to do it or to get it done by others.
Hierarchy: The organization requires a hierarchical structure to direct the operations of the levels that are subordinate. In every organization, there is a formal hierarchy that divides the organization into layers and levels of authority.
Flexibility: Managers should periodically review the organization’s adaptability to new situations.
Division of work: Designate various parts of the project to a number of team members according to their abilities, skills, and knowledge.
Division by department: Cluster functions and portions of the work in semi-autonomous units.
Formalization: Refers to the degree to which policies, procedures, rules, and job descriptions are documented and guide the behavior of people involved in the project.
Scalar chain or chain of command: A clear command structure that is well-defined from the top to the bottom of the organization. It implies that all members communicate properly with others, walking through the proper channels of command.
Amplitude in management: The extent of command and control means the number of subordinates one supervisor can manage.
Centralization: Degree of authority held at various levels of the organizational hierarchy. The degree of centralization depends on the maturity of the project participants, the level of trust in top management, and the management style in the organization.
Complexity: Covers the amount and kinds of work and different departments in the organization of the project. Projects with many different departments are more complex in terms of integration, management complexity, and communication.
Delegation: The process of transferring authority and responsibility to lower positions in the hierarchy.
Liability: The duty of performing the task or activity for which it was designated.
Specialization: Refers to breaking complex tasks into simpler functional parts so that people or project teams focus on specific parts.
**Three Classical Types of Organizational Structures**
- Functional Structures (or hierarchical)
- Project-Oriented Structures
- Matrix Structures (weak, strong, and balanced)
**Functional Structures**
Functional structures are most common nowadays. They are characterized by an approach based on functional specializations. They have clear and strict lines of command and authority. Each individual reports to only one superior. Each person has a well-defined position, as well as their office. In functional structures, there is little commitment to the projects, whose importance is low. The resources belong to the functional manager and are assigned to the project according to their interest.
**Structures by Project or Task Force**
The organization is structured vertically to cater exclusively to projects. Each team is separated from the others when they graduate. The project manager takes a position of prestige, authority, and responsibility and may also have the authority to acquire resources within or outside the organization.
**Matrix Structures**
Matrix structures were developed to maximize the strengths and minimize the weaknesses of both the anterior structures. They maintain functional lines of authority while establishing a horizontal structure to support projects. Solutions are based on sharing. They are designed to serve multiple projects simultaneously when resources are scarce or the size of the enterprise does not justify an independent organization. Human resources, arranged in departments, are temporarily assigned to the project and returned to their stations of origin at the end of their performance.
**Weak Matrices**
Those responsible for the project have little formal authority over resources. Managers are often technical experts and are more concerned with the technical aspects of the project. They may use the project coordinator with the authority to ask people close to the functional managers, with greater influence in the process of making decisions on activities and resource allocation.
**Balanced Matrices**
The managers have no authority over the resources of projects but negotiate as equals with the functional managers. In these matrices, project managers and their team often work full-time on the project.
**Strong Matrices**
Managers have full authority and have preference over the choice of project resources.