Organisation structure relating to project success

Organisation structure relating to project success

An organisation can have a major impact on project management. Is it difficult to get traction on your projects? Are there numerous layers of authority that you have to navigate to get approvals for basic tasks? Does your budget get cut because of competition for limited funding? Do your projects lose out in favour of day-to-day routine operations? It’s likely that you are feeling the effects of the organisational structure within which you work. Understanding your working environment better will help you to rise above organisational issues and smooth the way to successful project management.

How each distinct organisational style affects project management?

Functional Organisational Structure. These firms are organiSed into functional divisions based on primary functions such as engineering, human resources, finance, IT, planning and policy. Each different functional division operates independently and isolated groups of workers in a division report to a functional manager. The functional manager generally both allocates and monitors the work and carries out tasks such as performance evaluation and setting payment levels. In this model project managers have very limited authority. Functional organisations are set up for ongoing operations rather than projects and so this organisational structure is often found in firms whose primary purpose is to produce standardised goods and services.

Matrix Organisational Structure. In a matrix organisation control is shared. The project manager shares responsibility for the project with a number of individual functional managers. Shared responsibilities can include assigning priorities and tasks to individual team members. But functional managers still make the final decisions on who will work on projects and are still responsible for administration. Project managers take charge of allocating and organising the work for the designated project team. In this type of structure there is a balance between ongoing operations and projects, so it is a common structure for organisations that have these dual roles. For instance, local body organisations that are responsible for both maintaining existing infrastructure (ongoing operations) and commissioning the construction of new infrastructure (projects) often have matrix structures.

Projectised Organisational Structure. In a projectised organisation the project manager has full authority over the project. This includes the authority to set priorities, apply resources, and to direct the work of team members assigned to the project. All members of the project team report directly to the project manager and everybody is assigned to a project. After completion of the project, resources will be re-assigned to another project. This type of structure is common in firms that work on sizeable, long-term projects, such as in the construction industry.

What are the implications for project management?

Functional

projects that exist within a single functional division generate no particular organisational issues, but projects that cut across functional divisions can be challenging. Why? Projects that extend across functional divisions are demanding to manage because the project manager has no direct functional authority and must obtain continual cooperation and support from functional managers of other divisions in order to meet project objectives. This can get complicated.

Matrix

It gives authority to both project managers and functional managers the outcome is to provide a more seamless division of labour and ultimately to build a stronger team culture. However, the potential for conflict between functional managers and project managers still exists because there is still resource conflict. Everyone who is on a project team still has two bosses – their functional manager and their project manager.

Projectised

Here the authority is centralised. Because projects are removed from functional divisions the lines of communication are shortened. Both these factors enhance the ability to make swift decisions. Project teams develop a strong sense of identity which in turn creates a high level of commitment from team members. Due to their involvement in consecutive projects of a similar nature projectised organisations can develop and maintain a long-term body of experience and skills in specific areas.

It is clear that projectised organisations make it easier to run projects because the entire structure is set up for that purpose. But if you are managing a project within other organisational structures, then recognising and understanding the impacts will raise your awareness of the potential project management pitfalls, so that you can be proactive about resolving them.  Communication, conflict resolution and team building will be key to your success.