Log in / Register
Home arrow Business & Finance arrow Project Risk Governance
< Prev   CONTENTS   Next >

Complexities of Project-Based Organisations

While there are dear advantages that can be identified for PBOs, there are a number of complexities that should be considered.


The temporary nature of a project introduces potential concerns among managers and employees. Perceptions of impermanence and discontinuance go against the human desire for stability and certainty. As projects will vary in length and number, predictions about future employment conditions are virtually impossible. Requirements for project staff can undergo substantial variations, causing volatility of the working environment. Even for activated projects, decisions can be made to change the scope of the project or even to terminate it at short notice should the expected benefits not materialise.


The emergence of numerous projects, often quite diverse in nature and loosely connected, makes project knowledge complex. Landaete (2008) sees this as a paradox for PBOs: faced with expectations of having knowledge to identify new and innovative endeavours, project teams rely on exploiting knowledge gained from previous projects. The concern is about the extent to which project knowledge gained from completed projects is useful in identifying and completing new projects.


Knowledge management may be weakened further by certain traits of human behaviour. Being given greater autonomy over projects due to the increased responsibility to integrate project and business activities, project managers may want to keep a competitive advantage by being less prepared to 'give up' the knowledge that they are gaining. Negative behaviours among project teams may also show up, such as free-riding and knowledge hiding.


A lack of caring about issues outside the present projects may arise. Projects are often fast-paced (to meet market needs) with a fluctuating workforce (due to inability to predict the number of projects), leaving little time or willingness

for reflection on the experiences gained and how they could benefit other projects. The risk arises that the 'wheel' is unnecessarily re-invented over and over again.


PBOs have to manage the relative short-term objectives of projects with longterm organisational objectives. Complexity is introduced by multiple projects running sequentially and/or concurrently and requiring alignment with each other as well as with broader organisational activities. PBOs tend to lack the incentives and formal structures required for strategic management that can be found in traditional organisations.

Checklist: Understanding the Characteristics of a Project-Based Organisation

• Are multiple projects operating simultaneously within the organisation?

• Are projects regarded as the basic form of organising operations?

• Are projects expected to add creative and innovative capacity?

• Are projects seen to add business value?

• Are the differences between a project- and product-based organisation understood?

• Are projects of a temporary nature?

• Is the organisation structure regarded as flexible?

• Are the disadvantages of flexibility, such as lower economies of scale, accepted?

• Are projects of a heterogeneous nature?

• Is there excellence in project management?

• Is organisational strategy implemented through projects?

• Is the project portfolio closely aligned with business strategy?

• Are the implications of a PBO understood?

• Is a system of project governance implemented?

• Are tensions between project governance and project management resolved?

• Are some central functions, such as IT support, retained?

• Is it recognised that the arrival of projects is stochastic?

• Is the competition for resources between projects resolved?

• Do project activities extend beyond the organisation's boundaries?

• Are there elements of a traditional and/or matrix organisational structure?

• Are projects staffed by professionals who are attracted to their dynamic nature?

• Is project knowledge shared among project members?

• Are the consequences of the impermanence of projects on the project team recognised?

• Is there evidence of negative behaviour in projects?

• Is there time for reflection at the completion of projects?

Found a mistake? Please highlight the word and press Shift + Enter  
< Prev   CONTENTS   Next >
Business & Finance
Computer Science
Language & Literature
Political science