WHY PROJECTS?

The standard forms of organisation of any productive activity are the functional form and the product form (Mintzberg 1979). In the functional form, the resources required for production are organised into discipline-based departments, and the flow of information and materials in the production process passes sequentially from one to another as required. These functionally organised resources are normally shared between a number of production processes. In the product organisation, all the resources required for the production of a particular production process are organised into a single organisation, often called a product division. The advantage of functional organisation is that it facilitates the efficient use of resources, while the latter favours responsiveness to market needs. Inversely, product organisation can be inefficient, while functional organisation can be inflexible. Where a combination of market responsiveness and efficient resource utilisation is required, the matrix form of organisation is sometimes chosen where both functional and product orientated managers collaborate. It may also be used where a product organisation requires a geographic dimension, such as in a marketing division. Such organisational forms tend to be unstable because of conflicts between the functional and product orientated managers, and are not widely used. However, a version of the matrix form - project organisation - is well established in a number of industries, and the evidence is that its use is becoming more widespread. Its main distinction from matrix organisation is that it is temporary in character (Bryman et al 1987), and usually operates as an overlay on the functional form. While the life of a matrix organisation is normally indeterminate, the life of a project organisation is clearly determinate, with a delivery date identified as part of its declared objectives. The aim of a project organisation is to mobilise the required resources from their functional bases towards the market demand; it can be considered to be a "création collective, organisée dans le temps et l'espace, en vue d'une demande" (Giard and Midler 1993 p 18). This temporary organisation consists of two types of firms which, building on the terminology of Kristensen (1995), may be called skill containers and project coordinators. The former provide the technical and human resources required to do the work of the project, while the latter ensure that those resources are effectively mobilised towards the client's objectives. The time component of project organisation gives a particular characteristic. All projects consist of flows of information which define, initiate, and control flows of materials (Winch 1994). There is, therefore, an inherent level of uncertainty at their inception. This level of uncertainty differs depending on whether the project represents an incremental or radical innovation, but is always present to some degree. Projects are only mounted when an innovation is required, otherwise the client would purchase the good or service "off the shelf". These flows of information and materials can, therefore, be seen as a process of reducing uncertainty through time in the manner illustrated in figure 1. This information flow is not, however, smoothly continuous. Within the flow are critical points where key decisions are taken that qualitatively narrow of the breadth of the information flow. These may be considered as screens on the flow (Usmani and Winch 1993; Wheelwright and Clark 1992)