Project Organization

The project structure is an effective way of focusing all of the necessary talent  and organization resources for a given period on a specific project goal. The best talent is pooled to achieve a specific and complex undertaking within time, cost and / or quality parameters.  It permits large  doses of information and activity to be managed without overloading the hierarchical structure. The organization can continue to focus on its routine activities without interruption. It allows the main organization to proceed normally while providing concentrated attention to a new project.

The project structure is quite similar to product organization. Project structures usually have a limited life whereas product structures are created to deal with profitable products having a long life. The project structure can also be distinguished from the matrix organization (the terms are interchangeably employed these days)  The project employees’ in the matrix  structure are only lent to the project managers for a specific purpose rather than being purely responsible only to the project manager for some  period of time.

Project manager:  Project management calls for the appointment of a project manager who is responsible for the completion of the project. The project manager makes sure that the project does not get lost in the shuffle of organizational activities. He specifies what is to be done, when it is to be completed and how much of the resources are required. In turn, the functional managers decide who in their units will perform the task and how it will be done. The project manager is a focal point for the project activities.

Team members:  The project involves members from various functional departments or from outside. Team members report directly to the project manager. Membership is temporary. The size of group may change with the different phases of the work. As soon as the project is completed, team members go to another project.

Project authority: A project  possesses a vertical as well as a horizontal dimension. It cuts across the normal organization structure. A project manager is expected to work with various functional mangers by seeking their support through persuasive bargaining. He must convince them that they should help the project by lending its manager the support needed to finish the undertaking within time. In reality, the project managers face an authority gap. They do not have authority to promote or reward their personnel. They lack complete authority over the team and possess what is known as project authority. Further  in a project structure the role perceptions are unclear and lack specificity. The relationship of a project manager with functional heads is quite ambiguous .

The project manager is expected to accomplish goals by working not only with the functional groups of the company but also with outside organizations. The total project organization has discrete boundaries it is a complex structure that facilitates the coordination and integration of many project activities:


  • Project management allows maximum use of specialized knowledge which is available to all projects on an equal  basis. Knowledge and experience can be transferred from one project to another.
  • Project people have a functional home when they are no longer required on a given project. In between they are provided with simulating  opportunities to participate in the decision process.
  • The project structure reduces environmental complexity. It facilitates rapid collection and processing of new information.
  • Project structures are one way of promoting and maintaining organizational flexibility. Through projects, the specialization required to achieve a goal is brought together for as long as it is necessary.


  • Project structure creates feelings of insecurity  and uncertainty among members. Their relationship with functional members is unclear. Dual loyalty creates anxiety and tension.
  • The project structure  is an ad hoc  arrangement having a limited life. Once the project is completed, the project team is disbanded. In other words, the project manager and project staff work themselves out of a job. Some people feel lost without a permanent department with which they can identify. Security for such people is threatened when it appears that the organization’s only commitment to them is a temporary project. They fear that completion of the project will mean the end of the job. This can  encourage project slowdowns.
  • The project management violates the principle of unity of command. Role prescriptions are unclear. The relationship between functional managers and the project manager is not defined properly leading to ambiguity and conflict.
  • Contacts with the mainstream organizational life is served.  Members may be by passed when opportunities arise in their fields leading to career advancement.
  • A project manager has to perform a tightrope walk: he must build the team straightway, obtain cooperation from other departments, battle to meet the schedule, grapple with cost figures and decide things quickly. Decisions to sacrifice time for costs, cost for quality or quality for time, are common in most projects and the project manager must able to make them without panicking.
  • The project organization creates an authority gap for project managers where responsibility outweighs authority. Most projects are not self –sufficient. They need support from various quarters. Top management can easily jeopardize the project’s success through lack of awareness. Functional cooperation may also be difficult to obtain. All such factors seriously hamper the project performance.