What is one disadvantage of a projectized organization?

According to PMBOK®, Project-based organizations (PBOs) refer to various organizational forms that create temporary systems for carrying out their work. Businesses that need and expect fast innovation is most likely to be suited to project-based organizations. Many businesses like entertainment, construction, aerospace, etc. organize their work by dividing it into various projects. In a functional structure, departments are created to organize work based on specialties like marketing and finance. However, in a project-based organization, most of the business functions are organized in projects. A small-business manager should consider adopting a project-based structure as it improves the efficiency of the work. Implementation of project-based management also gives increased responsiveness, allowing him to adjust quickly to market changes. Considering the functioning of project-based organizations, we will learn about the project-based structure and the advantages of project-based organizations in this article. 

Basics of Project-Based Organization Structure

PBOs can be formed by different types of organizations including functional, and matrix. Implementation of a project-based system in the organization may diminish the hierarchy and bureaucracy in the organization. PBOs focus on the final result of the projects instead of unnecessary politics and positions.

Functioning of Project-Based Organization

A project focuses on one specific task or target. It could be for internal development or for a client. To utilize these business opportunities, companies set up projects to work according to individual needs. The client suggests feedback and the team works according to it.

The manager is responsible for the overall quality of the project. He ensures that projects have access to the team with the right functional expertise. The project managers’ responsibilities include choosing team members, assigning tasks to them, and monitoring performances. The team members execute all the plans and do all the work.

Advantages of Project-Based Organization

Numerous advantages are associated with project-based organization:

• Opportunity: Due to the close interactions between project tasks and strategies of the organization, its products and services are improved, which in turn increases the business value and thus, opportunities for innovations and improvements are also enhanced.
• Tact: The dynamic nature of a project allows its members to be exposed to different knowledge and skills. They get expertise in dealing with new and emerging challenges.
• Knowledge Management: An uninhibited flow of knowledge transfer is encouraged in project-based organizations. They create ‘lessons learned’ repositories in which they share and carry forward their experiences and knowledge to successive projects, thus improving the overall standard and quality of project performance.
• Effectiveness: The structural flexibility of PBOs facilitates the allocation of physical and human resources to endeavors that are of most benefit to the organization.
• Equality: The chances of internal politics and favoritism reduce to a great extent.
• Appraisals: Since the manager pays individual attention to each member of his team appraisals, and dedication of team members increases.
• Flexibility: The response time and flexibility improves because the manager has direct authority over project operations.

Disadvantages of Project-Based Organization

• A project team is meant for delivering results, preferably without anyone’s help. Isolation from other teams could prove to be a drawback.
• With less communication between teams, knowledge transfer might be a problem.
• When personnel keeps shifting from one project to another, the career continuity and professional growth of employees suffer.

Conclusion

The disadvantages in comparison to advantages are fairly insignificant and negligible. Project-based organizations are especially suitable for small or medium business organizations, desiring fast development of the organization and high-quality products. PBOs are based on and work on the philosophy that every little fragment of the work is important, irrespective of the size and structure of the organization. That’s why work is divided into projects so that individual and exclusive attention can be paid to the work. Give yourself a chance to evolve in your project management role with the PMP certification training and gain the best skills and practices in project management. 

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In today’s world among many business style and organizational structures a newly emerged and rapidly growing business structure is Projectized organization structure there are many opinions of business fertility upon the emerged structure in favor and against while many businesses has successfully adopted the structure and getting amazing outcomes of it, So do I; unintentionally the structure I developed for my organization was projectzied from very start. Adopting it was not a chioice but somehow situation brought my organization to make it an official structure for procedding after practicing it for several years I have come to list of advantages and disadvantages of the said structure; I won’t say that everyone should adopt it but analyzing your organizational needs you can assess for it.

Projectized Organization Structure

The first thing to understand about a projectized organization is that they rarely have a functional manager, in the case that they have one, they have very little authority over the employees or how things are done in the organization. A projectized organization works by arranging their activities into portfolios or programs and execute them through projects.

In these type of structures, the project manager is the final authority over the project they are handling. The team that is working on the project reports solely to them. Projectized organizations work well as they are not in binding for the employees in discovering new ways to do things. They allow the employee to grow on their own and from their peers’ experience as well.

Projectized organizations make sure that majority of the resources are allocated for projects and their proper completion. Their output is based on the deliverables they get from external clients so most projectized organizations will not be producing products or services for their own use.

There are some smaller departments which help keep things going, such as accounting, administration, and human resources. These give the employees ease when the basic functions of the organization are considered.

The project manager in a projectized environment has team members that are working under them full time. If an external team member is to be added to the core team, they are grouped and are located in such a way that coordination and communication is not hindered in any way. This optimizes their performance and creates a very good flow of work for project completion.

It is true that the project manager has full authority in the project, but that obviously does not give them the full right to do as they please. In cases where a resource is available with one team, but the current team in possession of the equipment does not require it, the resource can be reassigned whether the manager agrees with it or not.

In projectized organizations, the project managers are given the authority required to complete the project successfully and the outcome will solely be their responsibility.

Advantages Of Projectized Organizations

·        The team members have a clear line of communication with a single authoritative project manager at the helm.

·        With the team working together in the same place, there are faster responses to the client needs and the completion of the project is achieved on time.

·        Learning curves are faster in these kinds of organizations as all employees learn from their peers’ experiences.

·        Versatility in team members increases as they work on a project together, they gain experience from every aspect of it.

Disadvantages Of Projectized Organizations

·        Too much authority for one person can cause arrogance and problems for the team members in some cases.

·        Projects have tight schedules and deadlines which makes the job environment a bit stressful for everyone.

·        The organization may get a less loyal workforce as the employees may feel they can be laid off after the project is finished.

·        Hiring equipment and personnel with skills can be costly and since projects can span a longer time, it will become harder to contain the cost if there’s too much reliance on external resources.

What do you think what is the suitable business structure for your organization?