Projects and Organization, what is the deal? To give a proper answer to this question, we first need to understand the final aim of the company organization. We know that complex activities must be split into more straightforward tasks, manageable by individuals or groups of individuals. The single outputs must then be recombined to deliver a final output. When we speak about the Organization, we consider mainly how to split and then recombine the tasks. Projects (but also processes) are the tools managers use to recombine the job. How it is split, instead, depends mainly on the company's organizational form. Organizational theories tell us that companies can choose different forms of macro-organizations ranging from the functional to the divisional ones (per region, products, clients…). Even in this second case, though, at the lowest levels of the division, the Organization is almost always designed in subfunctions that aggregate people with the same skills and doing similar jobs. For the sake of simplicity (as this is not a course about Organization Design), we will consider a base case of a company organized by functional departments. Typical departments can be: Manufacturing Research and Development (often called to R&D) Purchasing, Marketing (including the selling function) Human Resource Management Accounting and Finance and ICT In these departments, we usually find human resources with similar skills and sharing the same competencies and perspectives all marketing people on the one side, all the production ones on the other. This organizational form might seem ineffective if we consider that activities will be hardly self-contained into a single functional department. For example, the production activity will require estimates from the sales department, materials coming from the purchasing department, manufacturing, and all the logistics activities connected. Similarly a new product development will require inputs from the marketing department, components for the purchasing department, design from the research and development, industrialization and process design by manufacturing, and so on. In other words, hardly processes (like production) or projects (like new product development) will be self-contained into a single functional department. We usually say that both projects and processes "cut the Organization  horizontally", which means they require splitting the job across different organizational units and then recombining it. But functions, unfortunately, don't always cooperate and collaborate efficiently for at least two main reasons: the objectives trade-off and the inter-goup conflicts. Regarding the first, we can imagine that all functions' main goal might be the same, for example, the company profit or growth. Nevertheless, when the main goal is split into functional sub-goals, some trade offs might appear. Consider, for example, a company having profit growth as the primary goal. When seen from a marketing and sales perspective, this means to sell more products, which might imply to have uncountable product variants to serve every possible customer need. The same main goal, though, seen from the manufacturing point of view, means to reduce the production cost. This reduction might be easily achieved by having a single version of the product to reduce the set-up times, resource training, the emergency supply of components and so on. It is not surprising that the two departments can experience a conflict, not on the primary goal but about how to achieve it. Besides the possible trade-off between objectives, we can also have inter-group conflicts among people in different functional departments. This is a subtle dynamic of the human brain well described by Sherif's Robbers Cave experiment in the 1950s, which describes the conflict originated between different groups that compete for scarce resources. In the experiment, 22 white, 11-year-old boys were sent to a special remote summer camp in Oklahoma, Robbers Cave State Park. The boys were divided into two groups and gave themselves a name: The Eagles and The Rattlers. During a four-day series of competitions between the groups (mainly physical and  sports competitions), prejudice became apparent between the two groups (both physical and verbal). Experimenters then attempted to reduce the inter-group conflict forcing the groups to work together to reach common goals (like cleaning the camp or cooking for the whole community). Still, this had the opposite effect, and the level of conflict among the groups increased even more. It is important to note that the boys were very homogeneous: same age, socio-economic and religious background. Moreover, they were assigned to groups randomly. This means that there were no other reasons for conflict but belonging to different randomly-defined groups. Thus, Sherif showed that being part of groups competing for limited resources increases the level of inter-personal conflict, a dynamic that we all experiment in our organizations daily under the shape of prejudices such as marketing people are like this or production people only care about that. So, to conclude, we saw that both processes and projects require functional departments to collaborate and integrate their efforts, but we also saw that this is hard because of trade-off effects and the intra-group conflict. Now we must consider that these dynamics are challenging process management hardly but become even dramatic in projects. Unlike processes, indeed, projects are done only once and need to be successful at the first attempt. Coordinating organizational units' efforts is critical in projects and calls for a structured approach to project organization management.
