The project organization consists of a number of horizontal organizational units to complete projects of a long duration.
Each project is vitally important to the organization. Therefore, a team of specialist from different areas is created for each project.
The size of the project team varies from one project to another. The activities of a project team are coordinated by the project manager who has the authority to obtain advice and assistance of experts both inside and outside the organization.
The core concept of project organization is to gather a team of specialists to work on and complete a particular project. The project staff is separate and is independent of the functional departments. Project organization is employed in aerospace, construction, aircraft manufacture and professional areas like management consultancy etc.
Project organization is appropriate when the enterprise is undertaking tasks that have definite goals that are frequent and unfamiliar to the present structure, that are complex because of interdependence of tasks and that are crucial for the success of the firm. A project team is a temporary set up. Once the project is complete, the team is dissolved and the functional specialists are assigned some other projects.
Merits of Project Organization
- It provides concentrated attention that a complex project demands.
- It permits the timely completion of the project without disturbing the normal routine of rest of the organization.
- It provides a logical approach to any challenge in fulfilling a large project with definite beginning, end and clearly defined result.
Demerits of Project Organization
- There is an organizational uncertainly as a project manager has to deal with professionals drawn from diverse fields.
- Organizational uncertainties may lead to interdepartmental conflicts.
- There is a considerable fear among personnel that the completion of the project may result in loss of job. This feeling of insecurity may create considerable worry about career progress.