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Organizing For Project Management

The document discusses two common organizational structures for project management: centralized functional and decentralized multidivisional. A centralized functional structure concentrates power at the top with departments arranged by function. It has advantages like simple reporting and logical organization but disadvantages like narrow perspectives and difficulty coordinating between functions. A decentralized multidivisional structure separates departments by project/region with division managers having authority over strategy and operations. It allows for quicker decisions and focus on results but can lack coordination between divisions. The document also notes that choosing a project authority structure depends on factors like project size/duration, experience, resources, technology uncertainty, and cost/schedule control needs.

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Ynah Casia
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42 views9 pages

Organizing For Project Management

The document discusses two common organizational structures for project management: centralized functional and decentralized multidivisional. A centralized functional structure concentrates power at the top with departments arranged by function. It has advantages like simple reporting and logical organization but disadvantages like narrow perspectives and difficulty coordinating between functions. A decentralized multidivisional structure separates departments by project/region with division managers having authority over strategy and operations. It allows for quicker decisions and focus on results but can lack coordination between divisions. The document also notes that choosing a project authority structure depends on factors like project size/duration, experience, resources, technology uncertainty, and cost/schedule control needs.

Uploaded by

Ynah Casia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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“ Chapter 2.

5
ORGANIZING FOR
PROJECT MANAGEMENT
”
Centralized Functional Structure

 centre of power is concentrated


at the top of the organization.
departments are arranged by
important functions.
Centralized Functional Structure
Advantages: Disadvantages:
 simple reporting mechanism  The over-specialization and narrow
 Functions are organized logically vision of key personnel are
and in a cost-effective manner problematic.

 Power and prestige of major  There is a possibility of limited


functions are maintained, and development for project managers.
strategic direction-setting is  There may be difficulty in achieving
easier to attain economic growth
 Duplication of efforts is  The lack of coordination between
minimized. functional departments may be a
problem area
Decentralized Multidivisional
 the departments are separated on the
basis of the project market or region.
 the division manager has almost total
authority to establish division strategy
and to manage internal operation.
Decentralized Multidivisional Structure

Advantages: Disadvantages:
 decision-making is quicker and  The increased number of
simpler. managerial and functional people
 divisional focus is on the end result may be unnecessary and may not
rather than the work required to prove to be cost-effective.
produce the end result  divisions may have little real
 output and responsibility can be incentive to cooperate with other
easily identified. divisions and, as such, lack of
coordination among different
 each of the divisions can be divisions may be an issue.
operated as a profit centre.
“ Chapter 2.4
ORGANIZING FOR
PROJECT MANAGEMENT
”
 One of the primary functions of a construction company is to
execute construction projects. This function is performed by
companies following different organizational structures at project
level. The organization at project level and at corporate level is
not the same. Construction companies follow different
organizational forms at project level. It is not an easy task to
integrate the project management structure into a corporate
structure. The inherent challenge here is to organize people from
different specializations and different departments into an
effective project team. The challenge gets further compounded
when a number of different organizations with different objectives
are involved in the project.
The factors that are important for choosing a
particular project-management authority
structure:
 project size and duration
 organizational experience
 resources
 difference
 importance
 technology uncertainty
 financial uncertainty
 number of projects
 cost and schedule control
End of presentation.

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