Project Organisation

Dr. Sepani Senaratne

Be 2306 Lecture Series - 2008, Department of Building Economics, University of Moratuwa

 Project Management
 “The overview and organisation needed to
ensure that a project is completed on time,
within budget and that it works.”

 “The means, techniques, and concepts used

to run a project and achieve its objectives”

BE2306 Lecture Series - 2008, Department of Building Economics, University of Moratuwa

 Why Manage by Projects?
 Because of their
 speed and market responsiveness for
successful competition
 ability to utilise a wide range of specialised
knowledge
 ability to handle organisation change
processes
 ability to control large-scale complex
activities

BE2306 Lecture Series - 2008, Department of Building Economics, University of Moratuwa

 Project Initiation
 A project can initiated,
 To get a product or service done
 To support a creative idea
 To develop a new technology
 To undertake a certain repair

BE2306 Lecture Series - 2008, Department of Building Economics, University of Moratuwa

 Project Organisation Forms
 Three major types
 1 - Within functional organisation
 2 - Pure project organisation
 3 - Matrix organisation

 Each differ in the way they connect to

the parent organisation

BE2306 Lecture Series - 2008, Department of Building Economics, University of Moratuwa

 1- Functional Organisation
 Project becomes a part of the functional
division
 The project is assigned to the functional
unit that has the most interest in
ensuring its success or can be most
helpful in implementing it

BE2306 Lecture Series - 2008, Department of Building Economics, University of Moratuwa

 1-Example

BE2306 Lecture Series - 2008, Department of Building Economics, University of Moratuwa

 1-Advantages
 Maximum flexibility in the use of staff
 People can be switched back and forth
between different projects within the
functional unit
 Full access to technical knowledge resided
within the functional unit
 Functional unit serves as the base of
continuity and consistency in policies,
practices and procedures
 Contains the normal path of individual
advancement
BE2306 Lecture Series - 2008, Department of Building Economics, University of Moratuwa
 1-Disadvantages
 Project is not the main focus as functional
unit has its own work to do, thus less
motivation
 Not problem-oriented rather function-oriented
 No individual is given full responsibility for the
project
 Poor and slow response to client needs
 Does not facilitate a holistic approach to
project – designed as a totality
BE2306 Lecture Series - 2008, Department of Building Economics, University of Moratuwa
 2- Pure project organisation
 Project is separated from the rest of the
organisation
 A self-contained unit with its own staff
and administration, while tied to the
parent organisation by periodic progress
reports and supervision

BE2306 Lecture Series - 2008, Department of Building Economics, University of Moratuwa

 2- Example

BE2306 Lecture Series - 2008, Department of Building Economics, University of Moratuwa

 2- Advantages
 PM has full line authority, high status and
direct control - unity of command &
shortened communication
 A strong sense of identity
 A high level of commitment and motivation by
its members
 React more rapidly to client needs
 Structurally simple and flexible
 Supports a holistic approach to the project
BE2306 Lecture Series - 2008, Department of Building Economics, University of Moratuwa
 2-Disadvantages
 In case of several projects, can lead to
duplication of tasks
 Foster inconsistency in terms of policies
and procedures
 With strong attachments, bitter
competition and political infighting can
exist
 Worry about life after the project

BE2306 Lecture Series - 2008, Department of Building Economics, University of Moratuwa

 3-Matrix Organisation
 A project organisation overlaid on the
functional divisions of the parent firm
 In this, project manager controls when
and what his team will do, while the
functional managers control who will be
assigned to the project and what
technology will be used.

BE2306 Lecture Series - 2008, Department of Building Economics, University of Moratuwa

 3-Example

BE2306 Lecture Series - 2008, Department of Building Economics, University of Moratuwa

 3-Advantages
 Project manager takes the responsibility for
managing the project
 The project has reasonable access to knowledge
resided in all functional divisions
 Less anxiety after project completion
 Flexible and rapid response to both client and
parent firm
 Access to admin. units, therefore,consistency in
policies, practices and procedures
 Allows better company-wide balance of resources
in case of several parallel projects
BE2306 Lecture Series - 2008, Department of Building Economics, University of Moratuwa
 3-Disadvantages
 Since the power is balanced between project
manager and the functional manager, doubts
can exist about who is in-charge of what
 Generally PM takes administrative control while
 Functional manager takes technological control
 Violate unity of command

 PMs may focus on individual projects rather

than the total system that optimises
organisation-wide goals

BE2306 Lecture Series - 2008, Department of Building Economics, University of Moratuwa

 Mixed organisations
 Sometimes, pure functional and pure
project organisations may coexist in a
firm.

BE2306 Lecture Series - 2008, Department of Building Economics, University of Moratuwa

 Choosing an organisational form
 Functional form
 Where major focus must be on in-depth application of a
technology (function)

 Pure project form

 For managing complex, innovative non-routine tasks in an
uncertain, changing environment

 Matrix form
 When the project requires inputs of several functional areas
and involves reasonable complicated technology

BE2306 Lecture Series - 2008, Department of Building Economics, University of Moratuwa