W14_OAN_Project Management Organization

  1. Problem Definition

A project organization is a structure that facilitates the coordination and implementation of project activities. As function foucus on project, thus the right decisions to form the organizational structure of project management will be prioritized.

  1. Development of Feasible Alternatives

Most organization structure arrangements are structured in 3 ways:

  • Functional
  • Project based
  • Matrix

3. Possible Solution

The principles requirement of forming the EPC organization chart described as bellows:

  • Optimizing the resource
  • Power and authority
  • Unity of command and direction
  • Increase productivity

4. Selection Criteria

The selection criteria will be organization chart with many plusses and mitigated as many negatives as possible, also focus and fit characteristic most of our project which is need a long-term focus and commitment.

  1. Analysis and Comparison of the Alternatives
  • Functional organizational structure

The programmatic focus refers to a traditional structure in which program sector managers have formal authority over most resources.

Figure 1: Functional Organizational Structure

  • Project-based organizational structure

Independent project team that separated from the parent organizations, with their own technical staff and management.

Figure 2: Project-Based Organizational Structure

  • Matrix organizational structure

Matrix organizational structure is a hybrid form, it loads a level of project management structure on the functional hierarchical structure.

Figure 3: Matrix Organizational Structure

  1. Selection and Preferred Alternatives

Table 1 show us Organization Type analysis. Project-based organization type has come out as the appropriate design in forming the incoming EPC project organization chart. It has more advantages and we can mitigate negative aspect. There will be hard time for serving more than two managers at the same time. Team member tend to focus on their main manager, because usually performance evaluation is done by main manager, not by project manager.

Table 1: Organization Type Analysis

  1. Performance Monitoring and the Post Evaluation of Result

All of these, project-based organizational structure is the most suite type considering the complexity of EPC Project. However, further evaluation on the implementation is subjected to review.


  1. Benefits & Disadvantages of Functional Organizational Structure.
    Retrieved from: http://smallbusiness.chron.com/benefits-disadvantages-functional-organizational-structure-11944.html
  2. Project-Based Organizational Structure.
    Retrieved from: https://yourbusiness.azcentral.com/projectbased-organizational-structure-17237.html
  3. Challenges and Benefits of Matrix Management in the Workplace from: https://www.thebalance.com/matrix-management-2276122
  4. 1_Shinta_Project Management Organization
    Retrieved from https://kristalaace2014.wordpress.com/2014/03/23/w4-1_shinta_project-management-organization/



1 thought on “W14_OAN_Project Management Organization”

  1. Sorry I missed your posting Pak Nunug!!! You should have sent me a reminder…

    Nicely done analysis!!!

    The only way to solve the problem of “serving two masters” is by having “internal contracts” which means setting up the functional groups as “profit centers”. But they HATE this as they don’t like the accountability that comes with having to document the “value added” they contribute.

    Dr. PDG, Jakarta


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