The manner in which an organisation is set up has a big effect on projects and project management. Projects are inherently about change, and people. Interacting with the people in the wider organisation and the project team has a direct link to project success. Organisation Charts show how people in a company are organised.
Functional organisations are department based. They can grow from small companies where people are hired for their specialisms. Staff work for a departmental manager. Introducing a project here requires great flexibility and understanding from the staff and their functional management. This organisation inherently has no focus on projects.
Advantages/Disadvantages of a functional Organisation:
- The project manager can focus on the project with no admin concerns for the people in the team
- Departmental managers can ensure consistency of process and methods
- There is no project team
- Communication with staff working on the project is potentially difficult
- Resources are supplied at the favour of the departmental manager
Although common in the past, these functional organisations do still exist.
Project organsiations put total focus on the project, with all the staff reporting to a project manager. Be careful that projects do not compete with each other for resources. The interest of the company should be superior to the interest of an individual project.
Advantages/Disadvantages of a Project Organisation:
- Total focus on the project
- Close links to the project team members
- Easy communication and informal monitoring of activities
- The project manager has to perform admin tasks for the people in the team (holidays, development, sickness etc)
- Projects can compete with each other for resources
- Projects may choose different methods and processes
Over time, the effect of projects doing things differently can lead to a change to a matrix type organisation.
This structure attempts to get the benefits of both of the previous organisation types. (It can also bring the problems of each type!). There is both a project team and a departmental team.
Advantages/Disadvantages of a Matrix Organisation:
- Focus on projects whilst maintaining a consistency of process and methods
- Project Manager can concentrate on the project with admin performed by the departmental manager
- Staff members have two bosses – this is not a problem if they both send the same messages!
- The senior managers need to work together as a team ensuring the company priorities are paramount
These organisations can have their power biased towards either the project, or the functions. In this case they can be called a ‘strong’ project bias, or ‘strong’ departmental bias.
I have captured the above comments in a short video.
Moving between organisations types is a big change, and people will fear changes. These changes need to be communicated well, and represent a “People Project”.
You probably cannot change the organisation type that you are working in. However, being aware of the issues of your current organisation is a big help to the Project Manager.