Just as a company's organizational structure needs to be carefully designed, the organizational structure of temporary and non-permanent activities such as projects requires specific design as well. Thus, it is essential to understand the design alternatives and the levers to design the best organizational structure for each project. It is easy to understand that there will not be the right solution a priori, but that the best organizational solution will depend mainly on the project's specific characteristics. In particular, we will see three possible organizational forms: functional-based and task force, in this lesson and matrixes in the following. Let's imagine managing a project within a typically organized enterprise with a functional structure. We know that the project’s different activities will demand different competencies located in different organizational functions. For example, in developing a new product, the marketing will supply the customer needs, the Research and Development will design the product, the purchasing department will provide the materials for tests and prototypes, and so on. Starting from this example, the first possible organizational solution that we will analyze goes under the name of project functional organization. In this organizational structure, the resources allocated to the project remain inside their functions and continue to report hierarchically to the functional manager. The project is split into elementary activities called work packages, which require only one competence to be carried out. In terms of time, cost, and quality, the work packages' responsibility is entrusted to the Functional Manager, who will assign these packages to his resources and be responsible for the final result of his function's contribution. It is important to note that there is no project manager in the functional structure. The Functional Managers are responsible for the division and subsequent re-composition of the workflows. In other words, the project's government is jointly agreed upon by the functional managers. This type of organizational approach is not suitable for all projects. Suppose the project's uniqueness level exceeds a minimum threshold, like when we are doing something significantly different from what we usually do. In that case, it is possible that resources in different functions need direct contact and coordination. In these cases, the functional structure cannot effectively support this need. Consider the example of a company that makes traditional diesel lawnmowers and decides to develop a new automated version powered by an electric engine. It will be essential for product designers and production process designers to work in close coordination. This is difficult with a functional project organization, where resources respond directly to their functional managers, who might estimate functional objectives more important than project objectives. Therefore, this organizational structure adapts well to projects with a low degree of innovation and uniqueness, where the interdependence of decision-making processes is negligible, and each function can work almost independently of the others. If the project presents a high degree of uniqueness, it is necessary to face the organizational problem in a diametrically opposite way: through a structure called task force. In this case*, the resources needed to carry out the project will be extracted from their functions, co-located in a common space, and will not respond hierarchically to their functional managers as long as they are allocated to the project. In contrast to functions, which aggregate resources with similar competencies into stable organizational units, task forces are temporary organizational units that aggregate resources to ensure the presence of all competencies necessary to obtain the project output. Besides, considering that the task force's resources no longer have a hierarchical dependency, these structures require identifying a new hierarchical manager, who we will call Project Manager. It is important to emphasize that to have a task force, is not enough that resources are allocated 100% only to the project with no other functional tasks. The hierarchical transition is essential. As long as a resource is assigned to a task force, its hierarchical manager is the project manager with whom, for example, the resource will discuss the holiday plan and performance bonuses if applicable. The functional and the task-force organizational structures are clearly two opposite solutions. In the former, the project gives way to functions and the project government remains in the functional managers' hands. On the contrary, in the latter, functions give way to a temporary organizational unit devoted to the project and hierarchically responsible for the resources. Being opposite solutions, we can see that one's strengths are simultaneously the weaknesses of the other. A positive aspect of the task force is the coordination of different resources and skills. The resources no longer sit in the office with colleagues with similar skills, but share the physical space with those coworkers they need to collaborate with. Moreover, task force resources are 100% dedicated to the project and are not distracted by other projects or processes. For these reasons, the task force appears as a structure devoted to maximize the project effectiveness. On the other hand, however, the drawback of such effectiveness, is a reduction in efficiency. In fact, the task forces temporarily remove resources from their original functions, thus reducing those functions' production capacity. In the meantime, the functions will have to continue to support the fundamental processes, but they will have fewer resources to be able to do so. Therefore organizational tensions will be generated, and some processes might suffer  performance failures. Besides, task forces may also have internal efficiency problems due to the difficulty of balancing the workload. Being allocated 100% only to the project, a task force resource could be underused in some phases of the project with the paradoxical effect of having overallocated resources in functions and underallocated ones in the task force. Finally, these organizational structures create significant problems when they are dismissed. The resources will return to their original functions. But in the meantime, they will have lost some of the knowledge growth developed by their colleagues. In many cases, their position may have been taken by other resources, and often this will also apply to their offices and physical spaces. Finally, the resource has usually acquired new and valuable managerial skills due to the exposition to different expertises and skills of other task force members, and will therefore aspire to higher managerial positions generating additional organizational tensions. On the contrary, functional structures maximize efficiency. The management of resources is delegated to the functional manager, who balances both standard processes and projects' workloads. A functional manager can independently decide what resources to allocate to a project, both in quantity and kind. This allows to accelerate, slow down, increase quality, or reduce costs if necessary. Functional structures are more flexible in using resources. Accordingly, the Project Manager is relieved of relevant and time-consuming tasks such as balancing the workloads. It follows that for projects with a low level of innovation, where the primary indicator of success is efficiency, the best organizational structure will be functional. On the contrary, for projects with a high degree of uniqueness and innovativeness, when the probability of failure and the relative impacts are high, companies can rely on the task force.
