How to Manage a Project

Project Management

Project Structures

There are three generic ways that organisations structure themselves to manage projects. They are:

No one form is inherently "right". Each has its advantages and disadvantages and each are more suitable for certain project environments than others. Organisations tend to move from one to another as situations change.


Projectised Organisation

In many ways the simplest and most obvious organisational form for managing projects is the projectised organisation. In this, each project becomes a self-contained organisation with all resources and functions within the project divisions. Top management see their role as that of a "holding company" managing a portfolio of project businesses.

This form is often used by organisations carrying out major projects. Thus British Aerospace uses this structure - project A might be the new Airbus, project B might be the Harrier replacement etc.

Projectised Organisation

The project is often initiated by top management and central support, then a project division is formed with its own director. Each project is largely self-contained with its own budget, support operations, staff, and facilities. Some major charities adopt this form - thus project A might be a famine project in Ethiopia.

It is often best suited to large, long-lasting, stable projects.

For projects to be managed effectively:


Functional Organisation

In this, the most common form of organisational structure in general use, staff are grouped into teams or sections or divisions according to some particular basic function.

Most common ones are:

Functional Organisation

In the functional organisation most projects are initiated by the top and divisional management, and a project manager is then appointed who must form a team from people in the various sections. The people are only on the project on a part-time basis and the project may not have a dedicated budget.

For projects to be managed effectively:


Matrix Organisation

The matrix organisation attempts to combine the advantages of the Functional organisation (cost effectiveness and specialist groupings) with the advantages of the Projectised organisation (focus and clear responsibilities and delivery)

It is often used where people need to be grouped into specialisms for management purposes, but brought together on particular projects of multi-disciplined teams.

Staff are organised into functional groupings (specialisms, geography, business) and then brought into projects to work on them when needed. Each project would have a project manager leading a team of seconded specialists. In some organisations, the project managers would be full time professionals located in a separate group under a Director of Projects. Hi-tech companies like Microsoft and Hewlett Packard use this, as does the BBC (a new TV programme).

Matrix Organisation

For projects to be managed effectively: