Project organization

Purpose --> Understanding the context

Abstract

The success of a project is highly dependent on the term project organization. The term is defined as a clear establishment of the project management team structure along with a communication approach in the beginning of the project. Maintaining the project organization during the entire project is essential to make the project a success. According to the PRINCE2 standard, the purpose of project organization is to define and establish the project's structure of accountability and responsibilities .

To successfully create and institutionalize a project organization, the project authority should be clearly communicated throughout the project team. This implies that each project team member knows their respective responsibilities. An effective way to visualize and hence intuitively communicate the organizational structure along with its division of authority is using organization charts (or organigrams). .

Big idea

• What is project organization (including essential aspects described), and what is its purpose (why is it important)?
• What consequences occur if project organization is neglected?

Project organization is a term describing the structure of a project throughout its entire lifecycle based on communication, coordination and management. The purpose of project organization is to define a structure of responsibilities and accountability across the project management team . Therefore, an effective establishment of a project organization requires unambiguously communicated authority. Additionally, each project management team member should know their specific role along with the associated responsibilities. This decrease of confusion and uncertainty about responsibility and accountability will reduce the risk of conflict emergence between employees working on the project. Also, a well-defined project organization establishes common expectations among the project team members, which implies a united project team work to achieve the desired project objectives. Neglecting efficient organization of projects often leads to a lack of motivation, which causes schedule overruns and hence budget overruns . Accordingly, well planned project organization and maintaning it during the project is essential to the success of the project .

State of the art

• What are the current modern and updated ways of doing this? (This have will be further discussed in applications).

The modern way to establish an effective organizational is to create an organizational chart. Organizational charts vertically represent the role or status and authority of each organization member. The status and authority decreases from top to bottom of the chart, which means the most powerful member organizational role is located in the top of the chart. An example of organizational chart is given in Figure 1. This tool is very powerful to demonstrate and clearly communicate the authority and roles within projects. Additionally, it emphasizes the internal organizational context of the project. This can further be useful to communicate the organizational project governance structure and interdependencies between the specific project and other projects and/or programs of the organization .

Figure 1: Organization chart simplified example

- Agile versus non-agile

Application

• How should project managers approach project organization?

This section will provide a broad type of guidance to PMs, which is applicable to all projects.

• What do they need to reflect upon before diving into different methods and tools?

This section will describe what needs to be considered in the individual projects before choosing which methods to apply. This is because every project is unique despite there is a lot of identical aspects in all projects.

An effective way to establish the project management team structure and the communication foundation is through organizational charts.

Agile PM methods with well-established project organization

• How are agile methods like SCRUM or KANBAN applied to a well organized project?

Section 8.12

• Are agile methods more applicable than rigid methods like the waterfall method?

Limitations

• Critical reflection regarding project organization in general.
• What can each tool/method do, and under what circumstances should they be applied?

It is important to acknowledge that effective project organization only reduces the need for change throughout the project lifecycle and does not completely eliminate the need for change. Therefore, despite organizing the project effectively, project managers still need to be open-minded towards changes throughout the project lifecycle .

• Which tools/methods are a part of the current standards of project organization, and which ones extend the current standards of project organization.

Organizational charts

Despite organization charts are very effective to communicate organizational structure and division of authority, they are illustrated by vertical lines of communication. In practice, communication is far more complex due to informal communication across the organization. Hence this tool is mostly applicable to emphasize organizational structure and its responsibility division rather than constraining the organizational communication . For instance using the Organization chart simplified example above, the manager of department A could be using the members of department B as consultants temporarily. In that case, the members of department B will report to the manager of department A instead of the manager of department B. Therefore, organizational charts are effective foundation for project organization but not necessarily for strictly defining organizational communication.

Due to organizational changes or new projects arising, it is advantageous to create new organizational charts. However, the resulting organizational changes of individuals' status or authority can cause unexpected reactions from people. Some people may feel they are not appreciated as sufficiently important employees, and an organizational feeling of injustice can arise . A potential solution is to distribute updated organizational charts with a thorough explanation and enable employees to express their feelings and thoughts through open communication.

The organization charts typically only show the role of the project team member and not the specific assigned responsibilities. To emphasize the assignment of project tasks to individuals or teams within the overall project team, a Responsibility assignment matrix is suitable to apply. An effective way of doing this is to construct and implement a RACI matrix, which describes different categories of responsibility assignment .

Project organization in an agile project management environment

In the modern business society characterized by rapid project execution, it can be difficult to develop a comprehensive project organization due to the lack of available information in the beginning of projects. Because of this continuously increasing uncertainty, it is beneficial to manage projects in an agile environment.

Despite that today's project management is heavily dominated by an agile approach, the traditional practice of project organization is still essential to achieve the desired objectives of a project. The informal approach of agile project management built on a dynamic and fluid approach experience difficulties without any implementation of traditional project management practices . Hence, even in an agile project management environment, establishing an efficient project organization creates a structured project management foundation. Consequently, the uncertainty related to responsibility and accountability is minimized as much as possible. Implementing this traditional project management practice will complement the agile approach by WHAT.