Construction Project Organization

CONSTRUCTION PROJECT ORGANIZATION
 Organization Design
 Organization Structure
 Differentiation of Organizational Structure
ORGANIZATION DESIGNS
What is an organization?
 Is a social entity that has a collective goal and is linked to an external
environment
What is the purpose of an organization?
 To coordinate the effort of many to accomplish goals
Types of Organizational Structures
 Functional (Pyramid of Hierarchy)
 Project
 Matrix
https://www.youtube.com/watch?v=KuS3Ss59o1g
ORGANIZATION STRUCTURE
 Represent the management hierarchy
 Reporting relationships who report to whom
 The official chain of control or authority
 Organization can be grouped into major subdivisions on the basis of

number of frameworks.
 Responsibilities & type of work for each subdivision

 Official lines of authority & communication
ALTERNATIVE STRUCTURE
 Other options
 Depends on goals
 Type of work it supposed to do
 Environment within which it operates
FORMS OF ORGANIZATION STRUCTURES

 Functional Organization
 Project Organization
 Matrix Organization
FUNCTIONAL ORGANIZATION
 This type relies on formal rules, procedures, coordinated plans,
budget, fairly common, segmented by department and their
functions.
 Works well in repetitive,
stable environment
https://cacoo.com/templates/functional-org-chart
FUNCTIONAL ORGANIZATION
 It is the most common type of the three
 It works best in small organization
 The organization is broken into different section based upon
specialty
 The project manager’s role is to ensure smooth execution of
processes and projects
 The functional manager has the most power and makes the final
decisions
TYPES OF FUNCTIONAL ORGANIZATION
 Geographic Differentiation
 Product Differentiation
 Costumer Differentiation
 Process Differentiation
ADVANTAGES OF FUNCTIONAL ORGANIZATION
 An advantage to the functional structure is the role of the functional
manager, which means there is only one Boss. This reduces or
prevent conflicts of interest and makes it easier to manage
specialist:
 Clear line of authority

 Career development
 Comfortable and easy
 Technical expertise
 Flexible resource assignment
DISADVANTAGES OF FUNCTIONAL ORGANIZATION
 A disadvantage of this type of structure is that the project manager

has limited authority and limited career path.
 No accountability over the complete project
 No project emphasis
 Low coordination across function
 No costumer focal point
 Low delegation of authority
 Work delays due to red tape
 Heavy politics
 Lack of big picture view
PROJECTIZED ORGANIZATION
 Is a project focused organizational structure where project manager

has the final authority over the project to make project decisions,
priorities and assign resources.
 A projectized organization refers specially to an organizational

structure that has been set up in a manner in which the project
manager leads the group and which the project manager has the
ultimate authority to make any and all decesions involving the
organization.
 In a projectized structure, all the work is looked at as a project. The
project manager has complete control, unlike in the functional
structure, and all team members report directly to the project
manager.
ADVANTAGES/DISADVANTAGES OF PROJECT
ORGANIZATION
 Advantages to projectized structure include the project manager’s

opportunity for career progression. In addition, because good
communication exists within the project work, the team members
tend to be more committed to, an excel in their responsibilities.
 The disadvantage of the projectized structure is that, because the

team breaks up and disperses after the completion of the project,
there are no long-term goals or sense of job security for the rest of
the workers. Another disadvantage is that the organization has to
essentially clone the same resources for each project (project
manager, work area, administrator)
COMPARISON BETWEEN ORGANIZATIONS TYPES
There are several differences between projectized and other types of

organizations:
 In projectized organizations, the Project Manager has all the
authority he wants, as opposed to matrix and functional
organizations, where the Project Manger has no or little authority.
 In projectized organizations, the Project Manager owns the

resources as opposed to matrix and functional organization where
they borrows the resources.
 Resources are only allocated to projects in projectized
organizations. In other types of organizations, resources report to
their functional managers and usually do routine, non project work.
MORE ADVANTAGES OF PROJECT ORGANIZATION
 The main advantage of having a projectized organization is that

decisions are made much faster due to shorter communication
paths.
 Additionally, project managers have real authority and the team is

more loyal, more dedicated, and is not disturbed by the problem of
“multiple managers”
PROJECT ORGANIZATION
 PURE PROJECT organization involve creating independent

organization specially for accomplishing a particular goal.
 The pure project organization is characterized by the usually great

importance, large scope, the large uncertainty, the high time
pressure, the long duration and high complexity of the project
TYPES
 Project Center
 Stand-Alone Project
 Partial Project
PROJECT CENTER
 Is linked to parent organization to draw resources and personnel as

needed
Examples
 General Motors task force to develop suggestions for downsizing
 Relocation Operations
STAND-ALONE PROJECT
 Newly created organization for this mission drawn from several

organizations
Examples
 Large-scale public works
 NASA space station development
 Construction joint-ventures
PARTIAL PROJECT
 Project manager responsible for some other activities

o Support-oriented such as accounting remain with
functional division
 This is common
PURE PROJECT DISADVANTAGES
 Cost in personnel (facility duplication)

 Lose training investment
 Team members do not feel secure
 Inefficiency, no place else to use key people
 High risk in early project phases

MATRIX ORGANIZATION
MATRIX ORGANIZATION
MATRIX ORGANIZATION
ADVANTAGES MATRIX ORGANIZATION
 Advantage to the matrix structure lies in the efficient use of

resources because of ease of access. This structure also
demonstrates efficient communication both vertically and
horizontally.
 Because of this, once the project has ended, the team members
are likely to receive a job elsewhere in the organization.
ADVANTAGES OF MATRIX ORGANIZATION
 The advantages of a matrix include:
o Individuals can be chosen according to the needs of the project.
o The use of a project team which is dynamic and able to view
problems in different way as specialists have been brought together
in a new environment.
o Project managers are directly responsible for completing the
project within specific deadline and budget.
o Required resources can be managed moving into and out of the
project team.
o Project cost is lessened because resources are used as needed
o There are appropriate focus on the project objectives through a
single Project Manager
o The overall enterprise utilization of resources is better handled in
the mode
DISADVANTAGES OF MATRIX ORGANIZATION
 A disadvantage of the matrix structure is complexity, which can
be difficult to manage.
 Example, if the functional manager and the project manager do
not communicate well, the team members can be caught in the
middle, causing confusion.
The disadvantages include:
o A conflict of loyalty between line managers and project
managers over the allocation of resources.
o Project can be difficult to monitor if teams have a lot of
independence
o Cost can be increased if more managers (ie project managers)
are created through the use of project teams.
MATRIX ORGANIZATION PROBLEMS
 Unclear lines of authority, two bosses, dual reporting
 No man can serve two masters
 Military principle of Unity of Command
 Chaos, confusion more common

 Often project manager tells you what to do, but your raise comes
from functional manager
 Success highly depends on individuals
MATRIX ORGANIZATION CAPABILITIES
 Functional part provides repository for technical expertise and
physical resources
 When in functional home, workers keep up professionally (train)
 Functional homes a place to go when project is over (no new job

search)
HYBRID ORGANIZATION
HYBRID FORMS
OTHER TERMS
Cellular Organization
 small work groups with people skilled in each required task were
organized together
Liaisons
 Are used to integrate two groups not part of the same organization,
useful between the people who fund the project and the project
team
Task Forces
 Temporary grouping of individuals to solve a particular problem
Expediters (Coordinator)
 Are individual whose jobs is to make sure that something happens,
no authority but they inform the project manager of the need for
additional resources. Pushes for speedy completion of work.
SUMMARY
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Construction Project Organization

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CONSTRUCTION PROJECT ORGANIZATION

 Organization can be grouped into major subdivisions on the basis of

 Responsibilities & type of work for each subdivision

FORMS OF ORGANIZATION STRUCTURES

 Clear line of authority

 A disadvantage of this type of structure is that the project manager

 Is a project focused organizational structure where project manager

 A projectized organization refers specially to an organizational

 Advantages to projectized structure include the project manager’s

 The disadvantage of the projectized structure is that, because the

There are several differences between projectized and other types of

 In projectized organizations, the Project Manager owns the

 The main advantage of having a projectized organization is that

 Additionally, project managers have real authority and the team is

 PURE PROJECT organization involve creating independent

 The pure project organization is characterized by the usually great

 Is linked to parent organization to draw resources and personnel as

 Newly created organization for this mission drawn from several

 Project manager responsible for some other activities

 Cost in personnel (facility duplication)

 High risk in early project phases

 Advantage to the matrix structure lies in the efficient use of

 Chaos, confusion more common

 When in functional home, workers keep up professionally (train)

 Functional homes a place to go when project is over (no new job

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