Did you know that there are many types of project organization structures?
Projectized structure is one of the many forms of organizations.
You would ask what the difference is between Projectized and Project structure. And how is it relevant to project management?
Read on. I have explained the finer nuances of projectized organizations in this post and how are they helpful for managing projects. I have also talked about the pros and cons of such type of establishments. Lastly, I have discussed if they are really the best.
The What, Why, And How Of A Project Organization Structure
Organizational structure refers to the way an establishment is setup. It is the division of a company into various groups and departments. Generally you can understand it through the organizational chart of a company. The chart shows the composition of groups and hierarchy within the company.
In project management there are variety of organization types. These are categorized from functional at one end to projectized at the other. I will not go into all these kinds. But you can refer to my other posts on this subject to get a detailed exposition.
Let’s just talk about projectized.
At the time of writing this post, projectized is not even an English word. It is not even defined in the latest edition of the PMBOK Guide. But it is very much a part of project management lexicon.
Many professionals think that project and projectized are synonymous but they are not. The latter is just one kind of classification of companies that undertake projects. Sometimes it is also referred to as project-oriented or project-based.
I will just stick to the term ‘Projectized in the rest of post.
Projectized Organization Structure
Projectized – Definition, Meaning And Example
The segregation of some corporate, administrative or commercial activities into packages of work that can then be treated like projects.
A projectized organization arranges all its activities into a collection of projects, programs, and portfolios. Projects are typically completed for external clients or customers. The prioritization of project work means the project manager can utilize resources and assign work as they see fit.
How Do Project Organizations Work?
Projectized organization are usually divided into portfolios, programs, and projects. Most of their revenue comes from implementation of projects.
These companies could have a few other divisions to help the projects. These include accounting, administration, and human resources.
Each project is headed by a project manager and all the team members work together as a closed unit. Generally the team is collocated for the period of the project but some team members could be virtually located also.
The project manager works with a high level of independence. He has almost complete authority over the team members. But he still has to report to the higher management, which may include PMO (Project Management Office), Program or Portfolio Manager, and Sponsor.
The project team members are loyal to their project and project manager. This happens because they work together in a self-contained unit and report to the project manager. However, the team does not have ‘a home’. The team is dissolved after the completion of project. They find a new project/project manager after the completion of the project.
Following are the salient features of a projectized organization:
- Projects are self-contained units.
- Project managers have very high level of independence.
- Project managers have formal power and authority over project resources. It is high to almost total.
- The project budget is usually controlled by project managers.
- The project staff is dedicated to a project and has a full time role.
- Project team members directly or through a hierarchy report to the project manager.
- The resource availability is high to almost total.
- The project team is disbanded after the completion of project. Team members and other resources are released from the project.
Advantages of Projectized Organizations
- There is a clear line of authority. It improves decision making and reduces conflict.
- The project manager can take independent decisions for speedy completion of the project.
- Team members work as a closed unit and have a common goal. They try to help each other in meeting the goal.
- Team members are loyal to the project.
- The team is focused on completing the project work.
- Intra-team communication is swift, smooth, and effective with a lesser chance of communication gaps.
- The learning curve of team members is usually shorter. They learn from their own and others’ knowledge & experiences.
- Over a period of time, as employees gain more experience through different projects, they become more versatile and flexible.
Disadvantages of Projectized Organizations
- Generally, project managers do not possess specialized domain level expertise and technical skills. Team members might not respect them as experts.
- Sometime too much authority with one person causes discontent and demotivation among team members.
- Generally, team members do not have competence in one and are usually jack of all trades. The quality of end result may suffer due to this.
- Generally, the working environment is stressful as projects have schedule constraints and stringent timelines.
- Since team members do not have ‘a home’, their motivation is more towards completion of the job than towards quality.
- The project team members may have sense of insecurity as they feel that they can be retrenched after the completion of project.
- There could be duplication of job function and facility in various projects. The resource utilization is generally not efficient and less than optimal.
- The communication and cooperation between various organizational projects is generally poor. The project goals take precedence over the organizational goals.
Final Thoughts – Is Projectized The Best Type Of An Organization?
You would have realized that there are a few disadvantages of projectized setups. It is not suitable for every setup.
The project management approach varies with the business. Different situations may require different composition. You might have to adjust your approach for different projects.
Project manager like projectized structure as it give them authority and power. However, it is not necessarily the best. It would suit most organizations that generate most of their revenue by doing projects. But it would not suit companies that are into operations.
Over To You
Which type of organization do you work for? Do you think suits your business? Do you like it as a project manager? What are the advantages and disadvantages that you see?
Please leave a comment.