From the working group to the consortium: project companies at a glance

Project staff usually come from different disciplines, organisations, companies and cultural backgrounds. The structural organisation forms the basic framework of the project and defines the general conditions for the distribution of tasks, responsibilities and powers of the project steering committee, manager and team. With the creation of a project-related organisational structure, the hierarchical classification of the team members is made possible, the respective scope of work and decision-making is defined and the basis for successful work in the team is laid. The project manager has the option of using different organisational forms, taking into account their specific advantages and disadvantages, and can shape the relationship between the project organisation and the base organisation in different ways.

In most cases projects are integrated in the base organisation of an existing company and as long as
 

• only one organisational unit is involved in the project (e.g. a laboratory group)
• there are few links and no resource links with other organisational units,
• other units only have to provide service functions, and
• the number of staff is relatively small,

no special organisational measures are required either within or outside the functional organisation. In a laboratory, for example, the laboratory manager would lead R&D projects without being explicitly appointed as a project manager. He will and can implement the projects within the base organisation. However, it is important that the number of projects for which a manager is responsible does not become too large.

Complex projects involving a particularly large number of organisational units, specialists or individual activities can quickly overwhelm the base organisation. This problem can be described using the example of a project that affects several areas of a functionally organised company. If there are no special coordination measures in the project, it tends to run sequentially. This means that the individual tasks are processed one after the other (= sequentially), i.e. they are strung together like a chain. One department completes its tasks and forwards its documents and results to the next department. That department completes its tasks and passes on its results to the next department. In this way, the holistic view of the project is increasingly lost. If someone had an overview of the whole project and coordinated the processes optimally, it would be possible to reduce cycle times and costs.

In this example, it makes sense to organise the project autonomously. However, there are other situations in which it can make sense to run a project outside the base organisation. These situations arise when the project task is highly complex, when resource consumption has reached a critical threshold (this may vary from company to company), when the task has a high degree of novelty or strategic value for the company (for example, when entering a new market segment), or when there is a risk that the people involved will not be able to perform their tasks because they are already too busy with their operational tasks.

In most cases, one or two of these characteristics will justify a special organisational measure to install an autonomous project organisation. Minor organisational interventions are only sufficient for projects that meet the criteria listed in the picture:

The base organisation needs to define these criteria in a way that makes them workable in practice. For example, it needs to define what 'short project lifecycle' means and under what circumstances the need for central control is 'low'. If the definitions are clear, those responsible can quickly decide whether special organisational arrangements are needed.

Legally and organisationally independent projects that are separate from the core organisation - carried out by a project company, for example - represent the most powerful variant in terms of project organisation, but in project reality they tend to be the exception. For large construction and plant engineering projects, for example, such companies are founded. Project companies are organisations that have become legally independent from the core organisation. Often several companies or other organisations participate in them. In these companies, which can have the legal form of a limited liability company or a joint-stock company, the project goals are identical to the organisational goals. Once the project goal has been achieved, the company is dissolved.

For projects that are to be given a quasi autonomous organisational structure from the parent organisation in order to coordinate the activities of several companies, three common organisational forms can be used:
 

• Partnership
• Integrated project team (IPT)
• Consortium (with one consortium member as general contractor)

A partnership is a temporary collaboration of companies or organisations working together on a project. The participating companies remain legally and organisationally independent, but work together on a cooperative level. The partnership is a common form of organisation when it comes to coordinating the activities of several companies in a project. Different companies can take on different parts of the project, drawing on their expertise and resources. However, in a partnership there is no core company that takes responsibility for the whole project. This can lead to poor coordination and poorer results in complex projects.

A better alternative to the partnership model is the integrated project team (IPT). This is an association of representatives from different disciplines within an organisation or between different organisations working together on a project. In contrast to the partnership, the experts act as an autonomous unit within the company. The IPT has its own project organisation where decisions can be made quickly because the representatives of the different disciplines work closely together. In order to form an IPT, the companies involved must agree to assign project management and responsibility to a project manager and to place the project team under his authority. The IPT may in turn report to a parent management company. This form of organisation offers more flexibility and faster decision-making than a consortium, and allows for better integration of disciplines.

Consortia are considered to be the best organisational form for projects that require extensive coordination between several companies or organisations. The partners work together under the leadership of a prime contractor to implement the joint project. The consortium forms an independent organisational unit to which each partner contributes its specific skills and resources. The main contractor acts as a link between the partners and coordinates the activities of the consortium. The consortium is managed by the consortium committee, which consists of management representatives from each of the participating companies. The committee designates the lead company, which is responsible for the project, while the other consortium members act as subcontractors. This form of organisation is used in particular for larger projects that require extensive coordination between the partners involved.

When implementing projects, it is important to create an appropriate organisational structure to ensure successful teamwork. The project manager can choose between different organisational forms to shape the relationship between the project and the base organisation. Projects can either be integrated into the base organisation or, if they are highly complex or of strategic importance to the company, they can be carried out outside the base organisation. In these cases, a separate project organisation is usually justified. Project companies can be run as legally and organisationally independent projects, offering advantages such as clear separation from other business areas and a higher degree of flexibility and adaptability. Choosing the right organisational form for a project is therefore crucial to its successful implementation. The specific needs and characteristics of the project should be taken into account.