Project organizational structure example. Determining the functional responsibilities of project participants. Benefits of a Project Management Structure

The main principle of constructing a project structure is the concept of a project, which is understood as any purposeful change in the system, for example, the development and production of a new product, the introduction of new technologies, the construction of facilities. The activity of an enterprise is considered as a set of ongoing projects, each of which has a fixed beginning and end. For each project, labor, financial, industrial, etc. resources are allocated, which are managed by the project manager. Each project has its own structure, and project management includes defining its goals, forming a structure, planning and organizing work, and coordinating the actions of performers. After the project is completed, the project structure disintegrates, its components, including employees, move to a new project or are fired (if they worked on a contract basis).

Advantages of a project management structure:

High flexibility;

Reducing the number of management personnel compared to hierarchical structures.

Disadvantages of the project management structure:

Very high requirements for the qualifications, personal and business qualities of the project manager, who must not only manage all stages of the project life cycle, but also take into account the project’s place in the company’s network of projects;

Splitting resources between projects;

The complexity of interaction between a large number of projects in the company;

Complicating the process of development of the organization as a whole.

The advantages of this structure outweigh the disadvantages in businesses with a small number of projects running simultaneously. The possibilities of implementing the principles of modern quality philosophy are determined by the form of project management.

2.2 Matrix (program-target) management structure

It is built on the principle of double subordination of performers: to the line manager (project manager) and to the functional manager (head of the functional unit). Organization of work comes down to the creation of temporary working groups within the organization to solve necessary tasks (projects). The resources allocated for this can be redistributed in the future, i.e. the same employee or equipment performs various tasks, without introducing new positions and units, and is used in scientific research organizations. The matrix structure contains vertical connections (across functional divisions), which determine the methods and principles of work, and horizontal connections (across ongoing projects), which determine the scope of work.

Figure 6 Matrix management structure

Advantages of a matrix management structure:

Better orientation to project (or program) goals and demand;

More efficient day-to-day management, the ability to reduce costs and increase resource efficiency;

More flexible and efficient use of the organization’s personnel, special knowledge and competence of employees;

The relative autonomy of project groups or program committees contributes to the development of decision-making skills, management culture, and professional skills among employees;

Improving control over individual tasks of a project or target program;

Any work is formalized organizationally, one person is appointed - the “owner” of the process, who serves as the focal point for all issues related to the project or target program;

The response time to the needs of a project or program is reduced, since horizontal communications and a single decision-making center have been created.

Disadvantages of a matrix management structure:

The difficulty of establishing clear responsibility for work on the instructions of the unit and on the instructions of the project or program (a consequence of double subordination);

the need for constant monitoring of the ratio of resources allocated to departments and programs or projects;

High requirements for the qualifications, personal and business qualities of employees working in groups, the need for their training;

frequent conflict situations between heads of departments and projects or programs;

The possibility of violating the rules and standards adopted in functional departments due to the isolation of employees participating in a project or program from their departments.

The introduction of a matrix structure has a good effect in organizations with a sufficiently high level of corporate culture and employee qualifications, otherwise disorganization of management is possible (at Toyota, the implementation of the matrix structure took about 10 years). The effectiveness of implementing the ideas of modern quality philosophy in such a structure has been proven by the practice of the Toyota company (Fig. 7).

Figure 7 Matrix management structure at Toyota

2.3 Brigade (cross-functional) management structure

The basis of this management structure is the organization of work into working groups (teams). The form of brigade organization of work is a fairly ancient organizational form, it is enough to recall workers’ artels, but only in the 80s did its active use begin as a structure for managing an organization, in many ways directly opposite to the hierarchical type of structures.

The main principles of this management organization are:

autonomous work of working groups (teams);

independent decision-making by working groups and horizontal coordination of activities;

replacing rigid bureaucratic management ties with flexible ties;

attracting employees from different departments to develop and solve problems.

These principles are destroyed by the rigid distribution of employees inherent in hierarchical structures among production, engineering, technical, economic and management services, which form isolated systems with their own goals and interests.

In an organization built according to these principles, functional divisions may or may not be present. In the first case, employees are under double subordination - administrative (to the head of the functional unit in which they work) and functional (to the head of the work group or team to which they belong). This form of organization is called cross-functional; in many ways it is close to a matrix one. In the second case, there are no functional units as such; we will call it the brigade itself. This form is quite widely used in organizing project management.

Figure 8 Brigade management structure

Advantages of a brigade (cross-functional) structure:

Reducing the management staff, increasing management efficiency;

Flexible use of personnel, their knowledge and competence;

Working in groups creates conditions for self-improvement;

Ability to apply effective planning and management methods;

the need for general specialists is reduced.

Disadvantages of a brigade (cross-functional) structure:

Increasing complexity of interaction (especially for a cross-functional structure);

Difficulty in coordinating the work of individual teams;

Highly qualified and responsible personnel;

High requirements for communications.

The transition to a brigade structure requires significant preparation:

Distribution of personnel among teams (10-15 people);

Appointment of a manager based on the nature of the work;

Organization of work on the principles of mutual assistance, interchangeability, personal responsibility, adaptability;

Bringing personnel to a state of universality;

Organizing a combination of collective and shared responsibility;

Stimulating economically beneficial cooperation;

Organization of the relationship between the remuneration of each employee and the overall results.

Thus, this form of organizational structure is most effective in organizations with a high level of qualified specialists and good technical equipment, especially in combination with project management. This is one of the types of organizational structures in which the ideas of modern quality philosophy are most effectively embodied.

We return again to the issue of organizational structuring of project activities. This time we have to study in more detail the question of how the project management structure can be integrated into the organizational structure of the entire company that is the project organizer. It is proposed to consider in detail the advantages and disadvantages of possible organizational models of such integration, to determine the factors influencing the choice of the most suitable option for the dominant culture and established management practice.

Project participants from the perspective of its organization

The organizational structure is often called a rigid decomposition of the system of authority in a controlled system of relations. But does the project have the characteristics of an organizational unit? We can confidently say that it does, regardless of what more general system of power relations it fits into: functional, project-oriented or other. It should be noted that we are considering commercial organizations that have overcome the stage of “Childhood” and gone through the first stages of “Youth”. That is, we are talking about entities that conduct fairly large-scale activities and have developed regular management.

An organizational structure in the general theory of management is a design of a management system that is characterized by a set of distinguished organizational units (officials and departments led by them). In addition, the structure builds lines of power interaction from the subjects of management and the relationship between structural units as objects of management.

There are two groups of organizational structures involved in the process of regulating the company’s project activities.

Permanently active.
Temporary.

The first group includes the strategic structural level. It is also called the level of top management of the organization. On this springboard, the strategic goals of the activity, investment policy and tactics of investment processes are determined. Project curators are appointed and their managers are approved, budgets are allocated, resources are allocated, and project activities are monitored. Here are the following:

sole executive body represented by the General Director;
Board of Directors;
development (investment) and innovation council;
project committee;
budget committee;
directors (managers) of project portfolios.

The operational level of permanent bodies is associated with the organization and development of project activities in the company. Here are represented such bodies as a project office or even an entire project management service, including a system of project offices, including offices of functional departments. Often line managers and heads of functional departments of the organization's management are connected to the operational level.

Model of the environment, strategic management bodies and execution of project implementation

If we move from the level of the entire organization to the size of a local project, then the diagram presented above allows us to focus more deeply on the structural connections between the development strategy and the actual implementation of an individual project. This helps to more clearly present the organizational model of the enterprise’s project activities, which, with varying degrees of interpretation, is replicated across the entire investment portfolio. We will devote the next section to temporary organizational structures, namely project team structures.

Temporary organizational structures

The organizational structure of a project is largely determined by what type of project is being implemented. If we are dealing with development projects or unique tasks of supporting the main production process, then the organization of projects is built within the framework of the functional or, at best, process structure of the enterprise. The project structure here has its own specific features that distinguish such a unit from the general background of the established culture and architecture of industrial relations. If so-called contract projects are implemented, temporary structures are more integrated into the overall “fabric” of organization and business structuring.

Problems of structuring a design organization

Indeed, a project within the framework of the project organizing company is not an independent unit, although for large projects there are often cases when a dedicated business entity is created for a large-scale task. This can be justified, but this phenomenon is not so common. We are still looking at the standard situation of the organizational model of activity. We are interested in the types of design structures that are named in the preamble of this section. The main problem of effective structuring is that between projects (as temporary events and the fundamental principles of structuring an organization) there is a contradiction, a kind of hidden antagonism.

Project challenges are unique. They have a beginning and an end, in other words, their life cycle is limited within the ongoing activities of the company. At the same time, the entire company lives in a mode of economic circulation, routine, current problems, and regular predictable events.
Projects and the entire organization have different natures of performance. Although they come into contact in the post-investment phase, they are still diametrically different. Projects create certain “jumps” in efficiency, new centers for generating income and profit. This is a stream of “micro-revolutions” in organization and/or profitability. The entire company builds efficiency in the overall evolutionary reproduction of the main and supporting business processes.
The “fabric” of project organization is either parallel to the main power-functional system, or separated from it, but not completely. This parallelism “breaks” the traditional zones of power concentrated in the hands of functional managers or business process owners.
The essence of design tasks is mainly interdisciplinary in nature. This means that coordination of the actions of specialists at different levels and areas of focus is almost always required. Take, for example, a project to introduce a new service and bring it to market. Marketing, finance, personnel, production, and sales are necessarily involved in the successful implementation of such a task. In the context of the development of design practice, competition for resources from different functional areas is intensifying, and the conflict of interests is inevitably intensifying.

It is worth noting that a structural problem is not a problem as such. This is a temporary difficulty in harmonizing the so-called “hard links” in power relations of management. At a higher level of development of the management school, a solution will inevitably be found and rules like “2x2” will appear, based on which it will be easy to select standard templates that ensure the greatest organizational efficiency. But while the process of developing such mechanisms is underway, we are guided by rather crude means of organizational optimization.

Organizational structure of the project as a unit of activity

The organizational structure of the project as a unit of activity in any case occupies some attention of the company's top management. This occurs through a series of events at the strategic and tactical levels of management. The organizational plan is embodied through procedures carried out by a special body, which must inevitably be created at a certain stage of improving the management system. The name of such a body can be varied. The most common name is project committee. Sometimes it is called the governing council of a project activity or an individual project. It happens that the functions of such a body are assigned to the strategic controlling group.

By project management council (project committee) we mean a body acting on a temporary basis to generally monitor the progress of the project and achieve its goals, taking into account the interests declared by its key participants. The project committee includes representatives of key stakeholders. The curator is required to participate in his work. In addition to him, the committee also includes a number of senior and middle management managers, representatives of organizations with an interest in the project.

Example of project organizational structure

Above is a typical diagram of the project's organizational model. On it, the project structure, as already noted, is divided into bodies external to the project and bodies internal to the organization of work. External bodies, as a rule, remain at the strategic level, and at the tactical level they only exercise control. Below this level, the design is structured as a PM power architecture. Below it, two structures emerge.

Project management team.
The project team is a group that executes the work and solves the planned tasks.

In addition, before these structural formations there was also a working group, but it is rarely formalized, and due to the short time of work there is no need to separate it structurally. The organizational structure of project management includes a significant figure of the curator, who is the link between the project manager and senior management. It is correct when it is the curator who forms the organizational model and develops the organizational structure of the project himself. In practice, this is difficult to find.

Typically, having assumed responsibility for the project, the PM begins to form both the project management team and the execution team. Its main task is to select such compositions of two bodies so that the knowledge and competencies of the participants will best allow them to construct work aimed at the required result. For these purposes, he is provided with the services of a project office or only an administrator.

Thus, the manager is not alone in his management activities. It is supported from above by a curator and controlled by a project committee. Next to him, the project administrator helps him with office work and coordination.

Integration of the project structure into the overall context

We have already discussed organizational management structures taking into account integration models in an article on the topic. This material highlighted horizontal, vertical and diagonal types of power connections used in such decisions. The characteristics of the main organizational forms of combining project and traditional types of management were also briefly given. The question remains unresolved: which version of the form to choose in each specific case of established practice.

Functional and purely design approaches

With a functional approach to integration, the organizational structure of the project in the business development paradigm is implemented in the least traumatic and conflict-free way. The functional-hierarchical model is not violated. The role of project manager is performed by the heads of departments for which unique tasks are most suitable in their area of responsibility. If a block of work on a project falls within the competence of other structural units, then the manager responsible for the result either directly contacts the corresponding head of the service or department, or acts through senior management. Naturally, this approach has both advantages and disadvantages. The advantages here include the following.

Ease of organizing and launching a project event.
The best opportunities for flexible use of labor resources.
There is no conflict regarding the use of highly qualified specialists on a number of projects at the same time.
The knowledge and experience gained during the work is better generalized and accepted by the team of the responsible department.
Budgetary least expensive mechanism.

The disadvantages of this method of organizing activities lie in the impossibility of implementing the project event as holistically and comprehensively as possible. Functional interests inevitably prevail in the activities of departments. Projects can be put aside overnight if “the wave of current problems overwhelms” the course of routine events. Specifically, the following disadvantages can be noted.

Lack of a single person responsible for the result.
Possible discrepancies in the priorities of work on several projects and current activities.
Cooperation is difficult.
Communication channels are cumbersome.
Low staff motivation to succeed in a unique task.
The illusion of a low budget.

Organizational model of the functional approach

Many of the disadvantages of the functional approach turn into advantages if the so-called “purely” project organizational structure is used. With this method of organization, the PM has full power over the employees assigned to him. In the mode of a dedicated project structure, it can easily coexist with the traditional functional model.

Organizational model of a dedicated project structure

The advantages of a project organization form the basis for choosing this method of business structuring.

Concentration of power over project personnel in one hand.
The PM is the sole responsible resource for the task of the event.
Communication channels are optimized through direct appeals.
The team feels like a full-fledged unit.
The integrity of the project is supported by an appropriate structure.

The disadvantages of the project method of organization, as usual, are the flip side of its advantages. First of all, its use is discouraged by high costs. There is a high risk of low workload of labor resources, which can be very unpleasant when unique specialists are included in the team. There is likely duplication of personnel in different projects and irrationality of functional compositions. The team may find itself isolated from other departments.

Matrix organizational structure options

Organizational structures for matrix-type project management at the time of their development were designed to offset the shortcomings of functional and project models. This is dictated by the desire to create new advantages that can make the organization of project events more harmonious. It is difficult to judge how successful this was. Matrix structures, especially balanced ones, are difficult to take root in Russia, since their mechanisms are very delicate, and the found balance of interests of functional managers and PMs can easily be disrupted if carelessness is applied.

Matrix organizational model of the company's project activities

The main idea of the matrix approach is to delimit the powers of the above-mentioned managers. At the same time, the ideologists of the approach ensure that the scope of powers does not overlap, and employees do not find themselves in a situation of dual power, failure to coordinate regular and unique tasks. We must also not forget that in addition to project regulation, modern commercial organizations use a procedural approach, which very successfully competes with projects for resources and also opposes functional architectonics. Traditionally, organizational matrices are divided into:

weak;
balanced;
strong.

Advantages of the Matrix Approach	Disadvantages of the matrix approach
1. The project and its goals are at the center of attention - as well as the needs of the clients	1. Conflicts arise between the project and functional structures, which create big problems when making decisions on the project
2. All the advantages of functional structures for optimizing activities in functional areas and using resources for the needs of several projects are preserved	2. There is a need to coordinate the activities of several projects, for example, on issues such as the distribution of limited resources
3. Staff anxiety about careers at the end of the project is significantly reduced	3. A serious problem arises in the distribution of powers between project managers and heads of functional departments
4. It becomes possible to flexibly customize the organizational structure within a wide spectrum: from a weak matrix to a strong one	4. The principle of unity of command is violated, which disorients the staff and causes many conflicts

The matrix approach to organizing project activities in a company has its advantages and disadvantages, which are listed in the table above. In addition, each type of matrix has special features that should be taken into account when choosing a particular organizational structure. The closest thing to a functional structure is the so-called weak matrix. Its only difference is that there are dedicated project managers who primarily perform a coordination function. He resolves all issues by turning to functional managers, and, if necessary, to managers at a higher level.

The opposite position is occupied by a strong matrix, which gravitates towards the project form of organizing activities. However, in a strong matrix, the project does not become an equal unit with functional divisions; it also “penetrates” functional hierarchies horizontally, drawing from them labor resources for its tasks. In this case, the power of the Republic of Moldova prevails over the management capabilities of the heads of functional structural units.

Balanced matrices are the most conflict-prone. Members of project teams are in dual subordination and are required to carry out the tasks of their current activities and unique project activities. Indicators of current practice may be based on a functional or process approach. The results of project tasks form additional indicators that sometimes conflict for the dominant attention of employees. Naturally, this model is more stressful and requires special management skills from the company’s management.

Matrix type	general characteristics	Scope of application	Disadvantages of the approach
Weak matrix(gravitates towards a functional organization)	This is a compromise that allows maintaining the power of functional managers and increasing the efficiency of project coordination.	Works well for organizations implementing internal projects for their own development.	The main disadvantages of the functional method of organization remain, but the level of achievement of the set project task increases.
Strong matrix(gravitates towards a “purely” project organization)	The PM is responsible for completing the project task as a full-fledged responsible resource. He, as it were, “buys” personnel for the project from functional managers and assigns tasks directly to the project team members.	The scope of application is quite limited, mainly to project-oriented business: construction, consulting, IT development, etc.	Higher cost of implementing an organizational model. Competition for the best personnel between project managers. Reduced level of power among department heads who turn into administrators.
Balanced Matrix(located somewhere in the middle between the functional and “purely” design approach)	Responsibility for the project is divided in close proportions between the PM and the functional head. The PM is responsible for the coordination and integrated result of all work. The head of the department is responsible for the results of work in a narrow functional area.	It operates at the stage of developed regular management and a high management culture of doing business.	High competition for power, task budgets and motivational budgets. Fragile organizational model, requires high leadership competencies.

How to choose a model?

Is the organizational structure of a company, from the perspective of implementing a specific project, a constant phenomenon? It’s not for nothing that at the beginning of the article we divided structures into permanent and temporary. Projects introduce an element of mobility into the organizational business model. Why? Because each project is a unique task, and the company has a whole portfolio of these tasks. Some projects are closed, some are opened, and all of them must be integrated into the general organizational “fabric” of activity, penetrate into the conditionally perpendicular “fibers” of vertical-horizontal connections of power, interaction and functional sequences.

Therefore, we comprehend the issue of organizational structures of projects in the context of the simultaneous diversity of integration events. At a particular point in time, a unique combination of organizational forms is in effect. The main thing is that there is no effect of overload, which serves as the basis for organizational chaos. The criteria and conditions for local selection of the project integration structure are shown in the table below.

Criteria and conditions for choosing an organizational structure for project implementation

Once again I would like to remind you that we are talking about companies that are developed from the standpoint of regular management. For young businesses, this approach is simply unacceptable. The maximum that can be expected from organizational decisions in the initial stages of life cycle is a functional approach or weak matrices. Simply, enterprises at the beginning of their development, as a rule, do not yet go beyond the scope of the investment project being implemented.

Can we say that the criterion framework shown above is optimal for an informed choice? I think not. In any case, management teams would not use organizational consultants so often to resolve the numerous problems that arise along the thorny path of finding best practices. Any organizational modifications usually affect the entire management system. The motivational component may be “traumatized”; budgetary and financial aspects require additional attunement to the ongoing changes. Communication logistics can be seriously affected and also need to be reviewed again.

However, I am full of cautious optimism and believe that the future lies in softer and more flexible practices (soft technologies). A high level of automation and elements of artificial intelligence should help build harmonious and dynamic organizational models. In them, the primacy of the cultural aspect will be combined with the symbiosis of functional, procedural and design paradigms. At the same time, the power of functional leaders, process owners and PMs will not lose focus, but, on the contrary, will gain clarity and compactness, based on their respective tasks. This requires new principles and rules of management in the reality that is already approaching. And this will inevitably happen.

In management, a project is, moreover, a temporary unit that is liquidated after completion of work. As a rule, these works involve conducting scientific and practical experiments, mastering a new type of product, technology, and management methods, which is always associated with the risk of failure and financial losses. An organization consisting of such units is called a project organization.

Project management structures are mobile and focused on a specific type of activity. This allows us to achieve high quality work. At the same time, due to their narrow specialization, the resources used in the project cannot always be used for further use upon completion of the work, which increases costs. Therefore, not all organizations can afford the use of project structures, despite the fact that such a principle of organizing work is very fruitful.

One of the forms of project management is the creation of a special unit - a project team (group) working on a temporary basis, that is, for the time necessary to implement the project tasks. The group usually includes various specialists, including work management. The project manager is vested with so-called project powers, covering responsibility for planning, scheduling and progress of work, spending allocated funds, as well as for material incentives for workers. In this regard, the manager’s ability to develop a project management concept, distribute tasks among group members, clearly outline priorities and constructively approach conflict resolution is of great importance. At the end of the project, the structure dissolves and employees move to a new project team or return to their permanent position. In contract work, they are fired in accordance with the terms of the agreement.

Thus, the scope of application of design structures are:

When creating a new enterprise;
When creating a new innovative product;
Institutions, subsidiaries or branches;
Conducting large-scale R&D;
A temporary organization created to solve individual problems.

Specific management tasks under a project management structure are:

Justification of criteria, identification of target projects;
Specific requirements for the selection of project managers;
Ensuring a unified innovation policy;
Prevention of conflicts due to milking subordination of employees;
Development of special innovative mechanisms regulating intra-company cooperation.

The project management structure has its positive aspects and disadvantages:

Matrix structure.

A matrix management structure is created by combining two types of structures: linear and program-targeted. When operating a program-target structure, the control action is aimed at fulfilling a specific target task, in the solution of which all parts of the organization participate.

The entire set of works to implement a given final goal is not considered from the standpoint of achieving the goal provided for by the program. The main attention is focused not so much on improving individual departments, but on integrating all types of activities, creating conditions conducive to the effective implementation of the target program. At the same time, program managers are responsible both for its implementation as a whole and for the coordination and high-quality performance of management functions.

In accordance with the linear structure (vertical), management is built for individual areas of the organization’s activities: R&D, production, sales, supply, etc. Within the framework of the program-target structure (horizontally), the management of programs (projects, topics) is organized. The creation of a matrix organizational structure for managing an organization is considered appropriate if there is a need to develop a number of new complex products in a short time, introduce technological innovations and quickly respond to market fluctuations.

Matrix structures are used in the following areas:

· Multi-industry enterprises with a significant amount of R&D;

· Holding companies.

Matrix management structures have opened up a qualitatively new direction in the development of the most flexible and active program-targeted management structures. They are aimed at boosting the creative initiative of managers and specialists and identifying opportunities to significantly improve production efficiency.

The main objectives of management under a matrix management structure are:

Ensuring a unified innovation policy in all product groups;
Determination of the composition of functional services and divisions;
Careful preparation of regulations on departments and job descriptions;
Development of special motivational mechanisms regulating intra-company cooperation;
Providing centralized management of facilities.

As can be seen, special staff bodies are introduced into the established linear structure, which coordinate significant horizontal connections for the implementation of a specific program, while maintaining the vertical relationships inherent in this structure. The bulk of the workers involved in the implementation of the program find themselves subordinate to at least two managers, but on different issues.

Program management is carried out by specially appointed managers who are responsible for coordinating all communications within the program and achieving its goals in a timely manner. At the same time, top-level managers are freed from the need to make decisions on current issues. As a result, at the middle and lower levels the efficiency of management and responsibility for the quality of execution of specific operations and procedures increases, that is, the role of heads of specialized departments in organizing work according to a clearly defined program is noticeably increased.

With a matrix management structure, the program (project) manager does not work with specialists who report not directly to him, but to line managers, and basically determines what and when should be done for a specific program. Line managers decide who will do this or that work and how.

The matrix management structure has its advantages and disadvantages:

Advantages	Flaws
Clear differentiation by products (projects);	High demands on line and functional managers;
High flexibility and adaptability of the main divisions;	High requirements for communication;
Economic and administrative independence of divisions;	Difficulties and lengthy coordination when making a conceptual decision;
High professional qualifications of functional managers;	Weakening of personal responsibility and motivation;
Favorable conditions for a collective leadership style;	The need and danger of compromise solutions;
Ease of development and implementation of a unified policy.	The possibility of conflict between line and functional managers due to the dual subordination of the former.

Requirements for building management structures:

Efficiency (i.e. the control action must reach the control object before the change occurs (it will be “too late”)).
Reliability.
Optimality.
Economical.

But the structure must first of all correspond to the goals, given principles and methods of managing the company. Forming a structure means assigning specific functions to departments.

The organizational structure determines the direction of project implementation at enterprises, the rules for allocating resources for a particular project. There are no ideal organizational structures for project management, but there are several basic types: functional, matrix and project. These organizational structures differ both in the degree of managerial responsibility and in the level of authority that arises in the decision-making process or the degree of freedom granted to the project manager and his team 1 .

Let's take a closer look at each type of organizational structure.

IN functional structures project management, each employee has only one immediate supervisor (Fig. 13.1).

Rice. 13.1.

Structural divisions are identified on the basis of similar labor processes, and their employees have similar professional skills, but different work experience - from beginners to experienced specialists. In a functional organization, different types of work and phases of a project are carried out almost independently in different functional units.

Functional organization has the following advantages 1:

clear reporting structure - project team members report to one boss and clearly understand the management structure;
the presence of a single group - group members know each other well, as they work in the same department. Since their abilities and merits are also well known, the distribution of work is greatly simplified;
separation of functions - this structure allows employees to improve their professional skills and become experts over time.

The disadvantages of a functional management structure are the following:

project managers simultaneously perform the duties of functional managers, which often diverts the manager’s attention to several directions at once, which can lead to low quality of work;
slow response to changes in the external environment due to the need for many approvals for decision making, since decisions are made at the upper levels of the hierarchy;
project managers' power is limited - project managers in a functional organization usually have to rely only on their negotiation skills to get functional managers to commit resources. They also have little authority to make demands on project team members.

IN matrix structure members of the project team report to both the project manager and the heads of the functional departments in which they work permanently (Fig. 13.2).

The project manager has project authority, which can range from almost all-encompassing line authority over all details of the project to purely staff authority. The project manager is responsible for the integration of all activities and resources related to a given project, oversees and is responsible for project planning, and checks the progress of its implementation. The heads of functional structural units delegate some of their responsibilities to the project manager, decide where and how this or that work should be performed, and monitor the progress of tasks.

Rice. 13.2.

Depending on factors such as the level of authority and the role of the project manager, the availability of resources, three types of matrix structures are distinguished: weak, balanced and strong matrix. The weak matrix has a strong resemblance to the functional structure. The role of the project manager in it is more consistent with the role of the project coordinator. A strong matrix is close to a project organizational structure. The project manager's job is entirely dedicated to the project, as are the key members of the project team.

The following advantages of matrix organizational structures are highlighted 1:

the organization is focused on the implementation of design work - resources are directed primarily to the implementation of the project;
availability of professional specialization - employees with a narrow specialization can use their professional skills and abilities throughout the organization, participate in various projects and develop professional skills and abilities;
availability of growth prospects - employees just starting their professional career can gain experience working in different departments of one organization, which is almost impossible in a functional structure.

The disadvantages of a matrix organization are:

the presence of a double chain of command - group members report simultaneously to several managers, which can lead to conflicts or missed deadlines;
mixing of responsibilities - team members can change priorities, especially if there is a conflict situation between the functional manager and the project manager;
possible conflicts between managers due to the struggle for resources and priorities, which affects the relationship between project managers and functional managers, putting the project at risk.

Project structures project management is focused not on the work of a functional department, but directly on a competitive project. In this structure, project managers have all possible powers, and other functional units report to them. This approach makes it possible to achieve increased flexibility and adaptability of the organization to changes occurring in the global external environment (Fig. 13.3).

Rice. 13.3.

Project organizational structures have the following advantages 1:

Project managers have the highest authority - team members report to only one boss and have a clear understanding of the leadership structure;
project teams are usually located together, which greatly simplifies communication;
project managers make decisions independently, which simplifies communication, problem solving and prioritization;
the organization is focused on project work - all resources are focused on the project and design work. Special loyalty is shown to the project and its manager.

Project organizational structures have the following disadvantages:

redistribution of project team members after the completion of the project, which makes it necessary for team members to find work. New projects do not always appear immediately;
downtime of specialists - highly qualified specialists may be in demand only at a certain time to perform special design work. In such an organization it is difficult to resolve the issue of their employment for the rest of the time;
competition - when forming project teams and obtaining materials, project managers compete for internal organizational resources, which can negatively affect external consumers.

Let's consider the influence of types of organizational structures on key characteristics associated with the project (Table 13.1).

Table 13.1

Impact of organizational structure on project 1

Characteristic	Project organization form
	functional		balanced		design
Project Manager Permissions	Minor or not	Limited	Low or medium level	Medium or high level	High level or almost complete control
resources
Who controls the project budget	Functional supervisor		Mixed type of control	Project manager
Workload in the project: administrator manager	Partial
	Partial
Percentage of personnel fully involved in the project

1 See: Guide to the Project Management Body of Knowledge (PMBoK Guide). 5th ed. M.: Olimp-Business, 2014.

The criteria for choosing one or another organizational structure for project management are given in Table. 13.2.

Selection criterion	Functional	Matrix	Design
Level of uncertainty
Technology			Innovative
Complexity
Duration
Implications for the company			Key
Level of relationships between parts of the project
The importance of the time factor (the presence of critical deadlines)
Dependence on a parent organization

Thus, organizational structures such as strong matrix and project structures are more suitable for the implementation of large-scale, complex, long-term and significant projects for the enterprise. At the same time, the functional organizational structure is optimal for routine, short-term projects of low importance for the organization.

Rice. 6.6. Dedicated organizational structure

If the main management mechanisms and direct sources of the main resources of the project are within the same organization, then it is necessary to create an intra-company organizational structure of the PM, while somehow coordinating the “parent” structure (i.e. the structure within which the project will be implemented) with new, project structure. Moreover, if the planned project seems to be a one-time project for the “parent” organization, then options for a dedicated (outside the “parent” organization) project structure are possible (the degree of “separation”, of course, can be different), and if the enterprise has to regularly implement various types of projects , then a deeper integration of the “mother” and project structures is required here. The last option is called project management.

Such a dedicated organizational structure is created exclusively for one project, after the implementation of which it is liquidated. The main resources for such a structure are the resources of the “parent” organization, which are temporarily allocated to the project structure and after its completion are returned to the “parent” structure. The degree of separation can be different - from a separate independent enterprise controlled only at the highest level, to a structural unit within the organization that interacts with other units of the “parent” structure.

Rice. 6.7. Project Management

In this case, a dedicated organizational structure for project management can turn into an internal, permanent project management structure. Organizations that regularly implement one or several projects are characterized by deep integration of the project and “parent” structures, and we can only talk about their differences conditionally.

Rice. 6.8. Total Project Management

With this scheme, the organizational structure of the project and the “parent” organization form a single whole and are managed by a common management system. The boundaries between the project and “mother” structures are extremely blurred. Resources for the project and for other activities of the “parent” organization can be shared and used jointly. If the activities of the “parent” organization consist entirely of project management activities, then an organizational structure of overall project management arises.

The three types of organizational structures described above (dedicated, project management and overall PM) are used in the following cases:

The general contractor of the project is one organization that assumes the functions of managing it and performs all or the main part of the work on its implementation;

The customer, general contractor and investor are one organization (these are so-called internal projects, which are implemented by one structural division for other divisions of the same organization. For example, in a project to create a new product, the customer may be the sales department, the general contractor - the production and design department , and the investor is the development department or the enterprise as a whole).

Rice. 6.9. Dual organizational structure

If two organizations of equal importance from the point of view of its management participate in a project, a so-called dual organizational structure of the management project arises. It is characterized by the fact that it allows for equal participation in the management system of two organizations - project participants. This may be expressed in the creation of a joint PM committee in which both organizations are represented, in their equal participation in the management bodies of a legal entity specially established for the implementation of the project (general meeting of shareholders, board of directors, audit commission, board) or in the existence of two project managers - one from each organization that has the authority to make joint decisions.

A dual organizational structure is applicable in the following cases:

The customer and the general contractor of the project have equal importance in the decision-making processes in the PM system or perform work of equal importance;

There are two equal investors or initiators of the project, equally interested in its results and taking an active part in its implementation.

Rice. 6.10. Complex organizational structures

If more than two organizations with different significant functions participate in the project, it is possible to implement the so-called complex organizational structures of the management program. There are three main types of such structures. UP is implemented by: 1) the customer; 2) general contractor; 3) specialized management company.

Within the framework of the “management - customer function” scheme, the customer can organize the implementation of individual sets of work, involving other contractors in the rest. The organizational structure of the project is formed by the customer. Organizational resources for project management are allocated to them and used during the implementation of the project on an ongoing basis. Resources from other organizations are used temporarily.

Within the framework of the “management is a function of the general contractor” scheme, the customer transfers management functions to the general contractor, retaining control of individual intermediate and final results. The general contractor independently forms the organizational structure of the management project, allocates permanent resources and implements all functions related to the management program, while engaging contractors and its own departments on a temporary basis to perform individual sets of work on the project.

Within the framework of the “management is a function of a management company” scheme, the customer entrusts the project management functions to a company specializing exclusively in project management. The company retains the most important project management functions, develops the organizational structure and implements management, while not performing any work on the project and transferring it to contractors. This scheme may have the following variety: the management company transfers all work on the project to the general contractor, who is the responsible executor of all work and can involve subcontractors in performing individual sets of work.

Thus, certain functions according to the management program are transferred to the general contractor, but the management company has dominance in this system.

Principles of classification of organizational structures depending on the content of the project. The whole variety of organizational structures for PM can be represented in the form of a continuum, the boundaries of which indicate possible solutions for the division of labor - vertical (functional-administrative) division of labor and horizontal (project-target) (Fig. 6.11). It should be noted what is meant in this case by the vertical division of labor. What is meant here is not the traditional consideration of the organization by levels of hierarchy, but the division of labor depending on participation in various vertical management processes and management functions. And the horizontal division of labor is understood as the structure of the activities of the organization’s employees depending on their participation in horizontal, technological processes of performing work.

The classic option for implementing the priority of division of labor in vertical processes is a functional organizational structure. An example of a classic functional organizational structure is presented in Fig. 6.12. Its general advantages and disadvantages are presented in table. 6.1.

Rice. 6.11. Classification of organizational structures in the space of horizontal division of labor

Table 6.1. advantages and disadvantages of a functional organizational structure

Advantages	Flaws
Encourages business and professional specialization	Stimulates functional isolation
Reduces duplication of effort and improves resource efficiency across functional areas	Increases the number of cross-functional conflicts and reduces the effectiveness of achieving common goals
Improves coordination in functional areas	Increases the number of interactions between individual participants in end-to-end, horizontal processes, thereby reducing the effectiveness of communications
Helps improve the performance of operations in functional areas	The established functional manufacturability does not contribute to the resolution of complex, interdisciplinary problems
Employees have a clear prospect for career growth and professional development	When attracting employees to implement a project, they significantly reduce motivation

Within functional organizational structures, mechanisms can sometimes be used to enhance horizontal integration and thus somewhat smooth out the negative aspects indicated in Table. 6.1.

The most commonly used mechanisms for horizontal integration of functional structures are intermediaries and teams.

Intermediaries are individuals or groups of people who facilitate communication between departments. An example of a mediator would be a computer specialist. An example of the use of an intermediary mechanism in the integration of project and “parent” structures are project representatives at the head office of the entire company, as shown in Fig. 6.13.

Rice. 6.12. Functional management structure

When the issues addressed by the mediators become more complex and important, or when more than two departments have a need for coordination, then teams are organized instead of mediators. Such teams are created “above” existing functional connections and act as independent organizational units. Teams can be created both to solve temporary problems and on an ongoing basis.

Rice. 6.13. Interaction of the functional structure with the project structure with the help of intermediaries (project representatives)

In Fig. Figure 6.14 shows two commands within an existing functional structure. Solid lines connect the members of these teams, with Specialist A being a member of both. Each team member is administratively subordinate to his functional department.

The issues of forming PM teams are discussed in detail in Chapter. 19.

Matrix organizational structures. While mediators and teams are useful in helping to mitigate the shortcomings of functional structures, they are still of limited use.

Rice. 6.14. Functional organizational structure using teams

poverty. For full horizontal integration, a project-target structure is superimposed on the vertical functional structure, thus forming a matrix organizational structure, an example of which is shown in Fig. 6.15.

Being a combination of project and functional structures, the matrix organization can take a wide variety of forms depending on which “end” of the organizational spectrum it gravitates towards in each particular case. Matrix organizational structures usually differ in the full powers of the project manager (or the person responsible for implementation: this is not always the project manager), in the amount of organizational resources involved in project activities, and in the existence and role of permanent PM staff.

On the left end of the spectrum (see Figure 6.11) of matrix organizations is a weak matrix, more like a functional structure. In this case, the project can have only one permanent employee - the project manager. Such a manager may be called a project manager and serve as a communications center.

Rice. 6.15. Matrix organizational structure of an investment construction company

A strong matrix structure is characterized by the fact that the project manager has great rights and powers, from 50 to 95% of all organizational resources of the enterprise are involved in projects, the project manager (in a strong matrix he is most often called a project manager) functions on a permanent basis and usually has his own own staff.

To explain the strong matrix, consider Fig. 6.16. Project Manager 1 (PM1) reports to the Program Manager, who also manages other projects.

Project 1 has three people assigned to it from the production department, one and a half times from the marketing department, half time from the finance department, four people from the science and technology department, and half time from the human resources department. These employees work in their own functional departments, but are assigned to the project on a full-time or part-time basis depending on the need for them. It should be emphasized that the project manager determines when and what should be done, and the function

Rice. 6.16. Illustration of a strong matrix organizational structure

The national manager determines who will be assigned to the project and what technologies should be used to complete the project tasks.

Based on the fact that the most specialists from the production and scientific and technical departments are involved in the project, we can conclude: project 1 represents the development and implementation of a new type of production process; Project 2 could be new product development or market research; Project 3 concerns the implementation of a new computerized financial control system. And in all these projects, specialists from functional departments perform their routine work.

All types of matrix organizational structures have their advantages and disadvantages, shown in table. 6.2.

Matrix organizational structures are effective for achieving simultaneous vertical, functional specialization and project-targeted (project, product, market, geographic, etc.) horizontal integration. In general, matrix structures are used to implement a project within one enterprise and in cases where it is necessary to manage several projects simultaneously on an ongoing basis.

Table 6.2. Advantages and disadvantages of matrix organizational structures

Advantages	Flaws
The project and its goals are at the center of attention, as are the needs of the clients	Conflicts arise between the project and functional structures, which create big problems when making decisions on the project
All the advantages of functional structures in optimizing activities in functional areas and using resources for the needs of several projects are retained	There is a need to coordinate the activities of several projects, for example, on issues such as the distribution of limited resources
Staff anxiety about careers at the end of the project is significantly reduced	A serious problem arises in the distribution of powers between project managers and heads of functional departments
It becomes possible to flexibly “customize” the organizational structure within a wide range: from weak to strong matrix	The principle of unity of command is violated, which disorients the staff and causes many conflicts

A project-target structure arises when all the activities of an organization are concentrated on the implementation of a specific project (or program as a set of projects) and the achievement of a specific goal. At the same time, all other structural formations are either absent or have an auxiliary significance (headquarters and service units, committees, etc.), which is shown in Fig. 6.17. Project structures usually have a clear boundary with the “parent” organization and interact with it at the highest level or function independently from the structures of the project participants.

Rice. 6.17. Project organizational structure with preservation of service functional units

In fact, shown in Fig. 6.17 project organizational structure is a combination of several parallel functional structures, which differ from conventional ones in that the achievement of project goals, horizontal integration, and also in the fact that these structures are temporary are of fundamental importance.

The advantages and disadvantages of project-targeted organizational structures are presented in Table. 6.3.

Table 6.3. Advantages and disadvantages of project-based organizational structures

Advantages	Flaws
The project has a holistic, horizontal, target orientation, which is ensured by the broad powers of the manager	There is duplication of functional areas and a decrease in the efficiency of resource use
Direct subordination of employees to the project manager is implemented and thus a unified direction of efforts of these employees is achieved	The project manager usually creates an additional supply of resources, which in most cases are not used
Communication links from employees to the project manager and from him to the top management of the “parent” company are shortened	Reduced manufacturability in functional areas
The project structure has a constant operating principle, and if one project is completed, its resources smoothly flow into other projects	There is inconsistency in the implementation of organizational procedures and general operating principles
There is unity in making decisions and issuing commands	Project team members are concerned about losing their jobs after the project is completed
Simplicity and flexibility are achieved in UE	In the case of simultaneous implementation of several projects, excessive and often negative competition arises between projects and their teams

All of the organizational structures presented above are used in one way or another for project management. Generalized characteristics of such use are presented in table. 6.4.

Divisional structures. Project-targeted structures include various divisional structures that organize activities not according to the principle of functional division of labor, but concentrate towards achieving goals in a geographic region, in a separate market sector, or differentiate their internal activities, focusing on certain clients or certain types of goods, with thereby relegating the functional principle of the organization to the background and not turning into a matrix structure.

Table 6.4. Comparison of project management organizational structures

Organizational structure	Functional	Matrix			Design-target
Project characteristics	Functional	Weak	Balanced	Strong	Design-target
Project Manager Authority	Extremely minor	Limited	Weak to medium	Medium to High	High to unlimited
Share of organizational resources used to complete the project	Practically O%		From 15 to 60%	From 50 to 95%	From 85 to 100%
Role of the Project Manager	Temporary	Temporary	Constant	Constant	Constant
Common titles for a project manager	Project coordinator/leader	Project coordinator/leader	Project manager/project manager		Project Manager/Program Manager
Project team status	Temporary	Temporary	Temporary	Constant	Constant

So, in Fig. Figure 6.18 shows the product divisional structure of the organization.

Rice. 6.18. Product divisional organizational structure

Such structures also include structures: - focused on the type of clients (consumers);

Regional organizational;

Targeted at different market sectors.

Mixed (hybrid) organizational structures. In addition to the above “pure” organizational structures, so-called mixed, or hybrid, structures find some application in project management. Such structures combine substructures of various types. For example, “partial” matrices are somewhat famous (an example is shown in Fig. 6.19). This organizational structure is used when an enterprise manages (or participates as a performer of individual sets of work) projects on an ongoing basis, but not everyone is regularly involved in projects, but only certain functional units, while others carry out their work as usual.

Functional and project organizational structures can coexist with others, as illustrated in Fig. 6.20.

Rice. 6.19. An example of a hybrid organizational structure - a “partial” matrix

Rice. 6.20. Mixed project-functional organizational structure

Such an organizational structure is possible in the case of implementing an internal autonomous project. So, some companies use it to gradually “grow” a project. At the time of initiation, the project is a small group of specialists united into a team. As the project “matures,” employees and departments are added to its organizational structure, and then, as the project “dies,” the remaining uninvolved divisions and individual employees are removed from it.

The effectiveness of using a particular organizational structure depends on the content of the project, which is a set of goals, objectives and results. The content of the project does not always require exclusively horizontal integration; very often it assumes a functional structure. For example, if the result of the project is not the creation of a single object, but a large number (batch, series) of the same type of goods or services, although for such production it is preferable to use a functional form of organization. Nevertheless, due to the cyclical nature of the emergence and collapse of such productions, each of them represents precisely projects for the creation and development of new types of goods.

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