Organizing for Project Management

Most projects are smaller than the organizations to which they belong. The management of a project is strongly influenced by the organizational environment to which they belong. The organization's maturity with respect to project management will have a great influence on how the project manager is able to perform the work of managing the project. For example, project managers who have a management style of participative management may have trouble managing projects in a strongly hierarchical environment.

Referring to Figure I-1, there are really only three ways that organizations can be structured. All organizations are derivations or combinations of these structures. At one end of the spectrum of organizations is the ''projectized'' or pure project organization. At the other end is the functional or traditional organization. In the middle is the matrix organization.

The Projectized Organization

In project management, the pure project organization is not the organization that we are most interested in. It is a developmental stepping-stone to the matrix organization that is so important to the proper use of project management. Let us look at these organizations one at a time.

The first type of organization used was probably the pure project organization. In this type of organization the project manager is the supreme authority, and all questions regarding the project are directed to him or her as the ultimate authority. The project manager makes all of the decisions. When the Egyptian pyramids were built, this type of

Figure I-1. Project management versions.











No Authority



High to


Authority in Projects


to Low Authority

Moderate Authority



Part Time

Part Time

Full Time

Full Time

Full Time

Manager's Time in


Common Titles for

Project Coordinator,

Project Coordinator,

Project Manager

Project Manager,

Project Manager,


Project Leader

Project Leader

Program Manager

Program Manager

Percent of






Project Team

Assigned Full-Time

organization was used. The project manager answered directly to the pharaoh, and there were thousands of people dedicated to the completion of the project. The project took place far from the formal organization, and most resources were completely dedicated to the project.

People who work in this kind of organization are generally dedicated to the project until it is over. In some early projects, such as building the Egyptian pyramids, people worked on these projects until they—the people or the projects—were finished. This type of project organization is necessary when there is a very large project of great importance or when the project is taking place a great distance from the main organization. The relationship between having a good focus on the goals of the project and good motivation is clear, and people respond well to a clear focus.

In this type of organization, the focus of the project team and the project goals are clear. Communications between the customer and the project team are usually quite good.

There are some disadvantages to this kind of organization, however. The first is one of efficiency. If persons with a special skill are needed, they must generally be brought to the project for the duration of time that their skills are needed, even if the skills are needed only part of the time. A stone carver who specializes in carving birds might be needed for only one week a month, but because of the distance and difficulty transporting him to and from the project site, he would have to be employed full time. For the other three weeks of the month this person would have to be utilized in some other capacity.

The second problem with this type of organization is what to do when it is over. There are thousands of people working on a pyramid out there in the desert. They all had the goal of constructing a pyramid. They all had a deadline of getting it done before the pharaoh dies. When the pyramid is finished, so is the project—and so is the team. There is usually a big celebration with everyone patting each other on the back while the project manager comes around and hands out everyone's termination notice.

In modern times the same thing happens in this type of organization. An example is the Apollo Program. President John F. Kennedy gave his famous speech and said, ''I believe this nation should commit itself to the goal of sending a man to the moon before the end of the decade and returning him safely to Earth.'' As we all know, this goal was met in July of 1969 when Neil Armstrong first stepped on the surface of the moon and returned home safely. At that same time, NASA managers were figuring out what to do now that the program was over. For a time they were able to keep life in the program, but eventually the funding dried up, and many of the highly skilled aerospace engineers and managers were terminated. When NASA, a few years later, tried to start up the space shuttle program, many of these former employees had changed careers and were happy in their new occupations.

We can say that this organization can be used for special projects that are large in size or remote from their home organization. For most of the projects that we will be involved in, this type of organization has too many serious disadvantages to be used successfully. This brings us to the next organization we will consider.

The Functional or Traditional Organization

The functional organization has been with us for quite some time—it has been the dominant form of organization for over a hundred years. The development of ''scientific management'' by such persons as Fredrick Taylor and Henry Ford led to the extensive use of the concepts of this type of organization, which are still used today. In this type of organization the intention is to place people into jobs that they do best, train them to do their jobs even better, and organize the work so that it takes advantage of their skills in the most effective way.

This kind of organization is set up primarily on the basis of organizing people with similar skills into the same groups, working under a manager who is similarly skilled. In this way the skills are concentrated into pools of workers in such a way that the manager can distribute the work to those who are best qualified for a specific job. The manager of this group, being experienced in this type of work, is also an appropriate person to recommend training and career-enhancing assignments to each of the members of the group.

In the past, traditional organization people became specialists in their jobs and became very good at what they did. This allowed them to become somewhat complacent about what they did. As long as they were continually asked to do things that were familiar and within their area of expertise they were successful. With people working this way companies became this way as well. They were very good at what they did as long as they could keep on doing it over and over again with little change. Companies like these were not easily changed when market demands and new technology entered their business areas.

Suppose Sally worked for a large automotive company in the 1970s. Her job was to design disk brake assemblies for all of the cars that this company made. She was very good at it. In fact, you could say that she was as good at it as anyone in the business. She was so good at designing disk brakes that she was employee of the month and received many awards for her designs in terms of quality and cost. She had been with the company since leaving college and progressed through the ranks and received regular raises. She received training to help enhance her skills and was allowed to go to a limited number of conferences held for people in her profession. She knew that in a few years she would be the head of a design group and perhaps some day be manager of a department.

Things changed and the company decided to diversify. One new line of business was producing a super-lightweight vehicle. This vehicle required the design of a disk brake assembly of the lightest weight possible. For Sally this meant that she would have to design the brake assembly using materials that she had never used before. This bothered her, and she delayed starting the task. She had no contact with the customer and knew nothing about the strategic objectives of this project.

Meanwhile, her boss was also less than enthusiastic about the project. Fortunately for him, the new ultra-lightweight vehicle was only a minor part of the work that was going on in his department. As a result he did not monitor Sally too much on the design of the disk brake assembly. To him it seemed that there was the more important work of the company's normal business to take care of. This new, here-today-and-gone-tomor-row, super-lightweight vehicle was just another dream of the marketing department and nothing to be concerned about when there were thousands of customers continuing to buy the standard products of the company.

In another department of the company, where the bulk of the vehicle design work was taking place, the manager was under a lot of pressure to get this design completed. It represented a large amount of the work that had to be done in that department. His job was all the more difficult since his fellow department heads were not concerned with this project. In addition, this manager probably had very little direct contact with the customer, and the communications problem of going through the marketing and sales people to find out what the customer really wanted was formidable.

As long as companies are doing the same sorts of things that they always did, this type of organization works well. Each person has a boss who knows what that person's job is and how well the person does it. The boss knows how to administer salaries, training, and all the other administrative things that employees need. By being familiar with the work and the people doing the work, the boss is able to best use the skills that are available.

However, the problem with this kind of organization is that it is difficult to make a change in what people do. Sally avoided working on the ultra-lightweight brake because it was more difficult to learn new things to get the job done. She was measured by the amount of designs she completed and to a lesser extent by the difficulty of the designs. She naturally avoided the difficult and new in favor of the tried and true. Since the whole company worked this way, it was very resistant to change and the development of new products.

The Matrix Organization

The matrix organization came into being in the 1970s. It was an attempt to put the best of the projectized and the traditional organizations together.

In the matrix organization, all of the employees report to functional managers much like the managers in the traditional organization. The employees are organized strictly by skills. In the traditional organization, there are many exceptions to organizing by skills. An electrical engineer might be in a department of mechanical engineers, for example. In matrix organizations this does not take place. All people of the same skill report to the same functional manager. The functional managers are responsible for project managers' staffing and direct the administrative work that is needed for the employees. The project managers direct the bulk of the work done by the employees.

There is an organization of project managers as well. The project managers are responsible for the work that is done, but not for the administrative work that must be done for the employees actually doing the work. This allows the project managers to form teams that can concentrate on the project at hand without getting bogged down by administrative work. It allows the project team to focus on the customer, the stakeholders, and the project much as in the projectized organization.

In operation, the project manager puts together the project plans and develops a list of people needed to work on the team. He or she then meets with the functional manager and negotiates for the people who are available and who have the proper skills to work on the project. Together, they develop the staff that will work on the project. The functional managers do this with all of the project managers who require skills that are in their organizations. Here is one way of thinking about this: If a project manager has a Gantt chart that lists all of the activities in a project, the functional manager has a similar chart listing all of the employees in the organization and the projects that they are assigned to work on, shown as bars against a timeline.

There are several difficulties with this kind of organization. There needs to be a balance of power between the project managers and the functional managers. If there is not, one group will dominate the other. If the project managers become too powerful, they can force the functional managers to allocate the best people to their projects, or even allocate more people than their projects require. The result of this is that all of the people end up reporting to project managers, who then can trade people between projects without consulting with the functional managers. The functional managers end up being underutilized. This type of organization where the project managers are very powerful is called a strong matrix organization.

If the balance of power is toward the functional managers, we end up with the traditional organization, only now we have a group of project managers as well. Sooner or later someone will realize that the functional managers are assigning and monitoring all the work and the project managers are merely expediting projects. This type of organization, where the project manager has less power than the functional manager, is called a weak matrix organization.

Balance can be achieved by deciding when work should be done by the project team and when work should be assigned to the functional department organizations themselves. For example, organizations can make a rule that any work done that requires a person to work full time for more than one month will be done in the project under the direction of the project manager, and any work that takes less time than this will be assigned to the functional organization. This allows work to be done in the functional areas as well as in the projects. This type of organization, where there is a balance of power between the functional managers and the project managers, is called a balanced matrix organization.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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