In one of my previous blog post what is Organizational Structure in Project Management? We discussed that every organization is organized in a way that supports in the success of portfolios, programs and projects. In this blog, we’ll understand projectized organizational structure; functional matrix and projectized organizational structure, projectized organizational structure definition, projectized organizational structure advantages and disadvantages in project management.
Table of Contents
- Define Projectized Organization Structure
- What are the characteristics of Projectized Organization Structure
- Advantages of the Projectized Organization Structure
- Disadvantages of the Projectized Organization Structure
Every organizational needs an organizational structure; it basically defines the hierarchy of the company. In simple words, it defines who works for whom and who reports to whom.
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Without this structure, there would be chaos and inefficiency. Now one of the most common forms of formal organization is the projectized organizational structure.
In projectized organizations, organizations arrange their activities into programs or portfolios, and implement them through the projects.
Here, the project manager is in charge of his project, and he has full authority over it. Everyone in his team reports to him. The projectized organization structure is opposite to the functional organization structure. Here, either there will be no functional manager, or if he exists, he will have a very limited role and authority.
This is one of the main benefits of projectized organized structure, as they are adaptive and learn from their own as well as from others’ experiences.
In projectized organizations, most of the resources are utilized in the project work. Projectized organizations are only interested in the project work which they get from external clients. Usually they have some small departments such as Admin, Accounting, and Human Resources to support the project management activities.
The project manager has full-time team members working under him. If possible, all members are grouped together and are often co-located for the duration of the project to get optimum performance.
As mentioned, in a projectized organization, the project manager has all the power and authority in Project implementation, however as part of a Portfolio, Project’s priority may be changed and resources be shifted by the Portfolio Manager.
Organizations give project managers as much authority and power as needed to complete the project, and at the same time, he is accountable and responsible for its outcome.
- The project manager has full power and authority over resources to be utilized in the project. He controls the budget, resources, and work assignments.
- The project manager has full-time team members working under his control who directly report him.
- When the project is completed the team is disbanded, and team members and all other resources are released.
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There are many benefits of implementing Projectized Organizational Structure. Let’s see it below:
- Since the team members directly report to the project manager, there is a clear line of authority. This reduces conflict, and makes decision making faster and more flexible.
- Due to a single reporting system, there are shorter lines of communication which creates strong and effective communication within the project management team.
- Due to a single authority, less time is consumed in communication, and response to stakeholders’ concerns is fast.
- Due to a sense of urgency, milestones, good communication, and cooperation, the learning curve is faster for any new member.
- Team members become versatile and flexible due to experience in different kinds of projects.
The following are a few disadvantages of the projectized organization structure:
- Since the project manager has full authority and power over his team members, he can become arrogant. A lack of power is a problem for project managers in functional organizations, while abundance of power of a project manager can be a problem for team members in projectized organizations.
- In projects, there is always a deadline and usually a tight schedule, which makes the work environment stressful and If the organization has multiple projects, there can be poor communication between them, causing resources to be duplicated.
- There is a sense of insecurity among the team members, because once the project is completed, they feel that they may lose their jobs.
- The cost of employees and equipment can be higher because you may be hiring skilled people and specialized equipment for a shorter period of time. Moreover, if the project gets stretched out, the cost of equipment and other resources can be much higher.
Projectized organizations are very dynamic and learn very fast. In this type of organization structure, the project manager has the main role because he is the one who manages the project. He has been given the authority to run the project and allocate the resources. Although he may be supported by the PMO, program manager, or the portfolio manager, at the end of the day he is responsible for the outcome of his project.
In this blog post, we have understood projectized organizational structure; functional matrix and projectized organizational structure, projectized organizational structure definition, projectized organizational structure advantages and disadvantages in project management.
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