Project based organisations
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'''The functional organization''' | '''The functional organization''' | ||
| − | The traditional functional organization, is structured in departments or functional units each specialized within a certain domain. Classical examples of these functional units or departments are; R&D, Finance, Marketing etc.. The structure of the functional organization is illustrated in figure X, where it can be seen that the departments all run parallel to each other with no links in between. Each department refers to the Senior management, who are in charge of creating the objectives of the organizations vision and strategy. The functional managers thus have to make sure that initiatives within their department align with these to keep the support of Senior Management.<ref name="PMI_senior"/> This is done through structured documenting practices and well defined formal procedures, such as reporting. | + | The traditional functional organization, is structured in departments or functional units each specialized within a certain domain. Classical examples of these functional units or departments are; R&D, Finance, Marketing etc.. <ref name="Kroon"> The structure of the functional organization is illustrated in figure X, where it can be seen that the departments all run parallel to each other with no links in between. Each department refers to the Senior management, who are in charge of creating the objectives of the organizations vision and strategy. <ref name="DaviesHobday"/> <ref name="Kroon"> The functional managers thus have to make sure that initiatives within their department align with these to keep the support of Senior Management.<ref name="PMI_senior"/> This is done through structured documenting practices and well defined formal procedures, such as reporting. |
The structure of parallel running departments in the traditional organizations creates silo systems, that makes this type of organization well suited for repetitive operations with small incremental changes. However the structure becomes problematic if the organization introduces a higher rate of projects. This is because there is little range for flexibility or cross domain collaboration in such silo structures. A project manager in such an organizational structure would in the hierarchy be under a head of department. If the project needs collaboration across departments, the manager would have to refer to, and ask permission from all department managers when making decisions. This creates high control for the head of departments yet low control for the project manager, leading to problems in project progress due to low flexibility and authority. It leads to poor communication for the project manager internally with their team and with external partners, because the PM can rarely answer questions without having the decision accepted by each department manager. For the above mentioned reasons it becomes difficult to execute innovative and experimenting initiatives or projects that need competences across specializations in a functional organization. | The structure of parallel running departments in the traditional organizations creates silo systems, that makes this type of organization well suited for repetitive operations with small incremental changes. However the structure becomes problematic if the organization introduces a higher rate of projects. This is because there is little range for flexibility or cross domain collaboration in such silo structures. A project manager in such an organizational structure would in the hierarchy be under a head of department. If the project needs collaboration across departments, the manager would have to refer to, and ask permission from all department managers when making decisions. This creates high control for the head of departments yet low control for the project manager, leading to problems in project progress due to low flexibility and authority. It leads to poor communication for the project manager internally with their team and with external partners, because the PM can rarely answer questions without having the decision accepted by each department manager. For the above mentioned reasons it becomes difficult to execute innovative and experimenting initiatives or projects that need competences across specializations in a functional organization. | ||
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=== Project, program and portfolio management in the PBO === | === Project, program and portfolio management in the PBO === | ||
| − | Organisational strategy - et program bliver sat in for at løse komplekse problemer og bliver | + | In the PMI standard for program management, it is written that " " |
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| + | Organisational strategy - et program bliver sat in for at løse komplekse problemer og bliver ofte en del af operations - i en PBO sammenhæng vil dette ske hvis PBO'en er en del af en functional organisation <ref name="PMI_organi_strategy"/> | ||
"An investigation of the influence of organizational design on | "An investigation of the influence of organizational design on | ||
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Pure vs. sub organisation in a mechanistic (do not use this word or use it with description) | Pure vs. sub organisation in a mechanistic (do not use this word or use it with description) | ||
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| + | Questions to ask if you are ready - <ref name="Kroon"/> | ||
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| + | * A Framework for Project Portfolio Strategic Planning by Utilizing Thematic Analysis Method | ||
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This book is a great resource for understanding the core principles of project based organisations. The book is about projects and complex products and systems and suggests a form of PBO for the development of such complex and uncertain systems. In it you will find project management and organisational theories in general with a specific chapter dedicated to project based organisations. Here a case study compares the PBO to a functional organisation. | This book is a great resource for understanding the core principles of project based organisations. The book is about projects and complex products and systems and suggests a form of PBO for the development of such complex and uncertain systems. In it you will find project management and organisational theories in general with a specific chapter dedicated to project based organisations. Here a case study compares the PBO to a functional organisation. | ||
| + | Kroon, J., 1995. General Management, Second. ed. | ||
| + | |||
| + | This book is about management, and has here been used mainly to get an understanding of different organizational structures. The book has an entire chapter devoted to organizing presenting organisatiional types in detail also displayed through graphical tools; organizational charts. | ||
== References == | == References == | ||
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<ref name="PMBOK">Project Management Institute, Inc. (PMI). (2021). A Guide to the Project Management Body of Knowledge (PMBOK ® Guide) – 7th Edition and The Standard for Project Management. Project Management Institute, Inc. (PMI). Retrieved from | <ref name="PMBOK">Project Management Institute, Inc. (PMI). (2021). A Guide to the Project Management Body of Knowledge (PMBOK ® Guide) – 7th Edition and The Standard for Project Management. Project Management Institute, Inc. (PMI). Retrieved from | ||
https://app.knovel.com/hotlink/toc/id:kpSPMAGPMP/guide-project-management/guide-project-management</ref> | https://app.knovel.com/hotlink/toc/id:kpSPMAGPMP/guide-project-management/guide-project-management</ref> | ||
| + | <ref name="Kroon">Kroon, J., 1995. General Management, Second. ed.</ref> | ||
<ref name=""></ref> | <ref name=""></ref> | ||
<ref name=""></ref> | <ref name=""></ref> | ||
Revision as of 14:14, 4 May 2023
Introduction
In recent years more and more industries are moving towards project based approaches [1]. The traditional way of organizing development is rigid in its structures leading to problems in execution of new and innovative initiatives. This is because the organizational structures inhibits the flexibility necessary to develop in a dynamic environment, and inhibits the flexible nature of projects [2]. This has lead researchers and practitioners to looking at ways of organizing in a more flexible manner; projects. The film industry is a classic example of an industry that has historically been working more of less purely project based; a Project Based Organization [1] [3]. This way of working has reached increased attention in other industries in the last couple of decades, where Michael Hobday's work on Project based organisations[4] has been a key source of inspiration for many researchers to build on [3] [5] [6][7][8][9]. This article will focus the Project Based Organisation5 comparing it to the traditional functional organization.
This article will give an overview of Project Based Organizations (PBO's), mainly focusing on the engineering industry. The article will first present the big idea; the characteristics of PBO's and how they solve the problems that occur in the traditional organizational structures, including an overview of the PBO and traditional functional organization structures and perspectives on how Project, Program and Portfolio management relates to the PBO. It will present an application of the PBO; what strategies exist for transforming organizations and which steps to take to enhance the specific values that a PBO structure brings. lastly the article will present the limitations of PBO's, both giving an overview of the limitations inherent to the PBO, as well as limitations in application.
Big Idea
What are Project based organizations?
The Project Based Organization is an organizational form that attempts to create a structure that favors the dynamic and flexible environment of projects.[2] To better be able to understand the project based organization an introduction of its opposite; the traditional functional organization, is necessary.
The functional organization
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