The Project Organization Structure is an enterprise environmental factor that plays an important role in determining the way, in which the organization and Project Manager perform.

1. Project
Management
 Project Organization
By Qadir Nawaz Abbasi
Mechanical Engineering Dept:
MUET SZAB Campus
Khairpur Mir’s
April, 2018

2.  Definition
• The Project Organization Structure is an
environmental factor that plays an important role
determining the way, in which the organization
Project Manager perform.
• Organizations have their own styles and cultures
influence how project work is performed.
• One of the keys to determining the type of
organization you work in is measuring how much
authority senior management is willing to
project managers.
• Project Management Organizational Structure
to know and understand the organizational
and the culture of the entity in which you’re

3. • Although uniqueness abounds in business cultures, all
organizations are structured in one of three ways:
1. Functional Organizational Structure
2. Matrix Organizational Structure – This can be further broken
down into – Balanced matrix, Strong Matrix, andWeak Matrix
Matrix
3. Projectized Organization Structure

4.  Functional Organizations:
• A Functional Project Organization structure is a
type of organizational structure.
• Here people are grouped as per their area of
and supervised by the functional manager with
the same field, so that their skills can be effectively
and the organization’s objective can be achieved.
• Here, all authority, budget allocation, and decision
power stays with the functional manager.
• A project manager has no role in this type of structure.
• Even if he exists, his role will be very limited and he has
the functional manager for his requirements.
• Here, a project manager may have the title of a
an expediter.

5. • The Functional Organizational structure, is suitable for
an organization which has ongoing operations such as
manufacturing and production operations.
• In functional organizations, the organization is divided
into various specific departments; e.g. human resource,
marketing, finance, operations, etc.
• Each department will have its own department head and
he will be responsible for the performance of his section.
• This helps control the quality and uniformity of
performance.

6.  Advantages of the Functional Organization
Structure:
Following are a few advantages of functional
organizations:
• Employees are grouped as per their knowledge
skills.
• Job responsibilities and reporting are straight to
functional head, and the hierarchy path is clear.
• Employees have a clear career growth path.
• Within the functional department communication,
cooperation and coordination is excellent.

7.  Disadvantages of the Functional Organization
Structure:
Following are a few disadvantages of functional
organizations:
• The employee may become lazy due to repeating
same type of work.
• Conflicts may arise due to the promotion of
employee.
• The functional manager pays attention to only
department; he usually doesn’t care for other
or sections.
• Poor communications and poor inter-department

8.  Projectized Organizational Structure:
• Projectized organizations are nearly the opposite of
functional organizations.
• The focus of this type of organization is the project
• The idea behind a projectized organization is to
loyalty to the project, not to a functional manager.
• In projectized organization, for project management
organizational structure, the project manager has all
power and authority and everybody directly report to
project manager.
• Here, either no functional manager exists, or if he
will have a very limited role.

9.  Advantages of the Projectized Organizational
Structure:
A few advantages of this in project management
organizational structure are as follows:
• Clear line of authority.
• Strong communication with single reporting
• Flexibility in trade-offs and decision making.
• Fast decision making.

10.  Disadvantages of the Projectized Organizational
Structure:
A few disadvantages if in project organizational structure
follows:
• Authority and power can make project manager
arrogant.
• The work environment can be stressful because
always a deadline (milestones).
• Team members have sense of insecurity because
the project finishes, they may lose their jobs.
• If the project gets elongated, cost of employee and
equipment can go higher.

11.  Matrix Organizations:
• Matrix organizations came about to minimize the differences
between, and take advantage of, the strengths and
functional and projectized organizations.
• The idea at play here is that the best of both organizational
structures can be realized by combining them into one.
• The project objectives are fulfilled and good project
techniques are utilized while still maintaining a hierarchical
structure in the organization.
• In matrix organization structure in the project management
organizational structure, the knowledge and skills of the
employees could be shared between the functional
and the project management teams, as needed.
• Here, the employee generally works under two bosses.

12. • The authority of the functional manager flows vertically
downwards and the authority of the project manager
flows sideways.
• Since, the authorities flow downward and sideways, this
structure is called the Matrix Organization Structure.
• In matrix organization structure, usually employees have
two bosses to whom they may have to report.
• Which boss is more powerful depends upon the type of
matrix structure.
• Matrix organization structure can be further divided into
three categories:
o Strong Matrix.
o Balanced Matrix.
o Weak Matrix

13.  Advantages of Matrix Structures
• Clear articulation of project objectives.
• Workable way of integrating project objectives with
objectives
• Efficient use of limited human resources
• Rapid (often interdisciplinary) information flow through the
• Retention of expert teams through the life of the project
• Rapid dispersion of team members back into the functional
organization upon project completion without organizational
disruption
• Project management trains managers to become leaders in
functional organization
• Project structures develop team spirit and high morale
• Possibility of conflicts arising during the project carrying over
functional management

14.  Disadvantages of Matrix Structures
The same seminal study of matrix organizations also notes
disadvantages:
• Two-boss problems, leaving project members caught in the
middle
• Project members playing bosses against one another
• Increases organizational complexity
• Requirement for high degree of cooperation between
and project management
• Potential for conflicting management directives
• Difficulty of establishing priorities suiting both functional
project management
• Possible slowdowns in management reaction to events
two structures required for solution
• Possible structural collapse in "crunch time"