In the project type organization, employees work for different projects in a team-like structure. Example for project type organization is construction companies. In construction companies, different teams work on different projects.
In this structure teams are put together for a project. Each project is headed by a project leader. Each team will have employees to suit its demands and to complete the project successfully. Only employees with specialized skills are considered for project teams. These members of project team will join back their parent company once the project gets finished.
In project-type organizational structure, each project is handled like a small company. All the essential resources and the equipments needed to execute the projects are procured till the project closes out. Employees having specialized knowledge and exposure to similar project environment will be appointed on contractual terms to work in a group and deliver the project expectations.
Advantages of project type organization
Clear line of authority:
The project manager has complete authority over the project. All the members of the project team are responsible only to the project manager.
High level of commitment:
The project team has a separate and strong identity, and all members are committed to the project and to each other strongly.
Swift decision making:
Because the authority is only with the project manager, the capacity to make swift decisions is increased.
Simple and flexible:
Project-type organisations are structurally flexible and simple, which makes them comparatively easy to implement.
Disadvantages of project type organization
Duplication of effort:
Each project team is fully staffed, which can result in a duplication of effort in every area from clerical staff to technological support.
The project organisation structure can be cost inefficient because of under utilization of resources or stockpiling equipment for future use.
Stretching out work during slow periods:
During slack times, team members may not work at high level of productivity.
Low level of knowledge transfer:
There is low level of knowledge transfer between projects as employees are committed to working only on one project. So, there is no source of knowledge transfer and shared functional expertise.
At the completion of a project, the employees may be fired if there is no similar type of project.