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Project Management Organizational Structures Essay

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A series of related jobs that are focused toward a major solution is a project. Projects take time, money, people, and other resources to perform successfully. Project management usually controls these resources as well as planning the project and allocating resources where needed. Before a project is started, management decides which organizational structure will be used to run the project. There are three organizational structures that can be chosen from consisting of the Functional, Matrix, and Pure Project structures.

Each of these has their advantages and disadvantages in structuring a project.

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Project managers are in charge of initiating, planning, executing, controlling and closing the project. Prior to beginning a project the manager needs to decide which organizational structure is the best fit to run the project at hand. Choosing which organizational structure to use largely depends on the size of the company, what is trying to be accomplished, and what resources are available. This paper will examine the three primary organizational structures mentioned above and the situation in which each structure would be the best method to manage a project team.

In the functional project management organizational structure, “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” (Mantel & Meredith, 2006). This organizational structure has been considerably one of the oldest methods used however, remains one of the most successful. The functional method is best used when applied to routine work functions and to support the value of work standards. Under this organizational structure projects are usually assigned into two different ways consisting of assigning a project to a functional manager who coordinates with others to contribute or assigning the project to different departments who each complete their portion of the work and report to the department managers. Consequently, “organizational behavior is important because the functional employees at the interface position find themselves reporting to more than one boss, a line manager [assigned to control resources] and a project manager for each project they are assigned to” (Kerzner, 2006).

The functional structure has both advantages and disadvantages. Advantages include a higher flexibility in using the staff through other required contributions, employees may be switched back and forth between related projects, individuals may be grouped for a larger depth of knowledge, the functional division serves as a “base of continuity” in the event an individual chooses to withdraw from the project, and the functional field serves as a huge advancement to those who have remained with a the project through a successful completion (Mantel & Meredith, 2006).

On the contrary, this structure is not very effective when used on more complex projects and when viewing employee recognition. The individual accountability of tasks is hardly recognized for tasks being performed on an individual basis. Other disadvantages recognized amongst the functional project management organizational structure include the focus not being set on the client, focusing more on activities versus function, slow responses to client needs, lack of interest and motivation in certain areas to the assigned projects, and difficulties in communicating knowledge.

Alike the functional organizational structure of project management, the Pure Project structure also has its unique advantages and disadvantages. This structure allows the project to be separated from the rest of the parent system becoming a self contained unit with its own staff, administration, and tying to the parent firm through periodic progress reports and oversight (Mantel & Meredith, 2006). Advantages to using this organizational structure include full authority to the project manager who is project director, shortened lines of communication, strong and separate identities of the project team, the ease of understanding pure project organizations, and the main focus on total project versus optimized subsystems as focused by other organizational structures.

The Pure Project structure is effective in dedicating resources through the life of a project. This method is excellent in executing complex projects in that it meets the demands of the project by “isolating unique work and maintaining a strong focus on completing the project” (Russell, 2008). This structure reacts rapidly to the needs of clients contrary to those in the functional organizational structure. This Pure Project structure’s inefficiencies include the transfers in technology and the use of resources, which are provided through the life of the project as well as duplications of effort, fostering of inconsistencies, and the project taking on a life of its own.

The Matrix organizational structure of project management is much a combination of both the functional and Pure Project organizational structures. This project management structure evolved from the flaws in the other two structures previously discussed. Being combined of the other two organizational structure of project management, the Matrix structure can take on a large assortment of specific forms. This structure works very well when several projects are being coordinated at once.

Contrary to the best components combined from the other two organizational structures of functional and Pure Project are the disadvantages of the Matrix structure consisting of conflicts. Having “individual employees to report to at least two managers often leads to ambiguity and conflict” which in turn could be avoided through proper communication (Russell, 2008). Much of the criticisms of this Matrix structure include the dark side of its advantages for balancing out who is in charge of the project, failure of project due to lack of negotiating skills, the severity of shutting down a project because of the project’s individual identities, and balancing time, cost, and performance.

There is not one organizational structure better than the other. Each organizational structure has its advantages and disadvantages. The decision rests on what project the manager is trying to accomplish. The project manager needs to decide which organizational structure best suits that project. The project manager needs to assess the available resources, finances, and keep in mind the timeframe that has been assigned to the project. In order for the project to be successful, the project manager must compare the organizational structures in order to decide which would be the most suitable.

In conclusion, organizational structures are never stagnant and frequently change based on the needs and the strategy that is employed by the organization. Organizational strategies dictate the structures that can be used by the organization and the success that these structures will have in the improvement of the productivity of the workforce in the organization. Any structure ultimately is used to improve the manner by which organizations report and communicate with the other elements within the organization. Organizational structures, rules and regulations, are generally viewed as instruments set in place to facilitate and aid task performance by all those involved in the organization. Due to the effectiveness of the project, the Functional organization, Pure Project organization, and Matrix organization are the three most project management structures that are still used today.


Kerzner, H. (2006). Project Management: A systems approach to planning, scheduling, and controlling. (9th ed.). Hoboken, NJ: John Wiley & Sons, Inc.

Mantel, S.J. & Meredith, J.R. (2006). Project Management: A managerial approach. (6th ed.). Hoboken, NJ: John Wiley & Sons, Inc.

Russell, M. (2008). Organizational structures in project management. Ezine articles. Retrieved August 01, 2008 from http://ezinearticles.com/?Organizational-Structures-In-Project-Management.

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