Project based organisations

Big Idea

What are project based organisations?

Project based organisation (PBO) is an organisational structure where projects are the main driver of business. In a pure project based organisation the project manager will have control over all functions of the project, with only senior management to refer to. This means that the functional units, ie. R&D, finance, marketing etc. are integrated in each project in the PBO instead of going across multiple projects. Furthermore, because projects are the main driving force, each project organisation structure looks different. This is because projects drive the business and therefore also shapes the organisational structure. Figure 1 illustrates that projects are the driving force of the project based organisation, whilst the functional units and their expertise is the driving force of a functional unit, they are respectivly in the top of the organisational diagram. Furthermore it illlustrates how in the PBO, the functional units are integrated under each project and that each project in the PBO looks slightly different in the organisational structure, i.e. the functional units may be placed differently and some may be more important to some projects than others. The project based organisation stucture gives the project manager authority over resources. This high level of control that lie with the project managers of each project in the PBO leads to high flexibility within the project.

Figure 1: Project based organisation structure and functional organisation structure (Created by J. Steinfurth, inspired by

Why choose a project based organisational structure?

The purpose of introducing a project based organisation is that it has the ability to deal with fast change as well as being proactive to uncertainty and project risk. Furthermore, PBO's have an openness in the organisational structure that makes it easier to work across organisations and include external stakeholders in the project process. Thus the PBO becomes an enabler for co-creation in projects. PBO's are proven to be useful when dealing with complex products or systems where the clients needs may change through the progression of the project as they gain more knowledge.

The PBO terminology

The definition of a project based organisation can be hard to determine. This is because in litterature there are several terms and forms of project based organisations. This is partly because the project based organisation is dependent on context and therefore changes with it, which makes it difficult to define. Furthermore, the PBO can exist as a pure form like described above, but can also be diluted. In the diluted form "in which the needs of the project outweigh the functional influence on decision making"

In the following will be given an overview of some of the terms that can refer to a form of PBO.

In this article we will adopt the terminology of Davies, A. and Hobday, M., where project based organisations are the closest to the pure form whilst the diluted form i.e. some functional and formal units outside the project frame, will be called project led organisation.

What are the key characteristics of project based organisations?

• Knowledge- transfer is one of the key things to utilised to reap the benefits of PBOs, but is really hard(Sundqvist et al., 2014)
• Innovation (creativity) in PBO's (Söderlund et al., 2014)(Thiry and Deguire, 2007)
• Efficiency… effectiveness…. These are the kay aspect that PBO structures focus on improving more holistically (Sundqvist et al., 2014)

How do project based organisations relate to program management

• Connecting to project management and the PMI (or other standard) – there is multiple levels of project and they form huge complexities within organisations(Söderlund et al., 2014). The different levels may be called programs and portfolios, and need management as well, and this management need to be and embedded part of the context of the project, programs and portfolios. (Project Management Institute, 2017)
• The theories on project management and organisational structures have not always been interrelated and investigated as correlating topics and theories. (Sundqvist et al., 2014)

Why choose a project based organisation structure?

This chapter will answer:

• Problem it solves: organisational structures instead of operational project management – the framework and context of the project management has an influence on the management and the success (Leiringer and Zhang, 2021)
• How Efficiency and effectivness can be improved (relate to the key aspects of PBO's)
• how PBO's can help stabilize specific factors whilst keeping flexibility for the changing nature of projects. (Jerbrant, 2013) (Jerbrant and Karrbom Gustavsson, 2013)(Pryke, 2017)
• How PBO's can be a supportive framework for program and portfolio management and its success, due to several tasks being streamlined across project (Petro and Gardiner, 2015)
• How PBO's are different from Matrix organising structure (Davies and Hobday, 2005)
• Explain how they tackle fast change and innovation (Davies and Hobday, 2005)

Application

In what context?

• how and in what context to utilise the benefits of having an project-based organisational structure, drawing on the theory above in the applied field. (Mahura and Birollo, 2021)
• how the above mentioned structure influences the leadership, discussing both centralised and decentralised management (Project Management Institute, 2017)
• how knowledge sharing and learning can happen within the organisation to help learn across the project - and when this is is relevant and when it is not (Mahura and Birollo, 2021)

A case study

• Not yet specified (will be chosen later to fit the context of the rest of the wiki article)

Limitations

What to be aware of in project based organisations

• how the framework has flexibility as a core, and this can also a limitation because project-based organisation can differ so much it becomes more difficult to understand and generalise across project based organisations (Turner and Miterev, 2019)
• in line with the above and the theory how knowledge sharing could be a strength but if not done is one of the weak links of project-based organisations
• More to be added

The status qou in the litterature

• a lot of articles referring to project based organisations but a lot may not use the terminology Project-based organisation, but rather describe it or call it something else
• Articles often refer to it but do not describe it in greater detail – one book had “project based organisation” in the title but did not refer to that actual term once in the text of the book. (Pryke, 2017)
• “The embeddedness in projects” is pointed out by (Sundqvist et al., 2014), to be one of the acknowledgements one needs to make.
  • When is an organisation project based?
  • How embedded should the project practice be in an organisation to call it project based?
  • Do project based organisations have the same structure? Is it a question of structure or a question of the amount of project or that the organisation have somehow organised themselves around project in some way (not specified/defined by literature)
• The definition of a project is highlighted as a part of the discussion on project management and organisation theories – this is the most important thing to remember (Söderlund et al., 2014)