Management organization/ organization structure

Three basic organizational structures

Functional

Project

Matrix

PROJECT AS PART OF FUNCTIONAL ORGANIZATION

What is a Functional Organization Structure?

Functional organization structure,in which authority rests with the functional heads; the structure is sectioned by departmental groups.

 Most Common & Traditional

Activities are assigned based on expertise

Authority Flow is vertical 

Based on the sub-division of disciplines into separate departments together with vertical hierarchy

 

Functional Organization Structure

C.E.O

VP Finance

VP Marketing

VP Manufacturing

VP Personnel

Functional Organization Structure

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P res id en t

Functional Organization Structure

Functional Organization Structure

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F u n c tion a l M an ag er

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C h ie f E xecu tive

Red boxes represent staff engaged in project activities

Project Coordination

Functional Organization Structure

  Advantages of Pure Functional Form

Simple Lines of communication within department are well

established Clearly defined responsibility and authority for work

within the departments Maximum flexibility in the use of staff Experts assigned to different projects with relative

ease within a division/department.  Professional & Career Growth and Advancement

Disadvantages Client Not the Focus: because people in different department are responsible

for their assigned jobs only.

Complete Responsibility for the entire project missing because the functional units are responsible for the their own activities.

Provides scope for different department heads to pass-off company project

failures as being due to the failures of other departments . Lack of coordination…

Lengthen the lines of communication slowers down the response time

Competition & conflict between functional departments

Department work may take priority over project work

 

suitability

small projects

Pure Project Organization

Suitable to projects that are very large & complex and/or geographically located away from the parent organization.

Pure Project Organization

Pure project organization structure

CEO

PERSONNELENGIN’G MARKETINGFINANCE

PROJECT MANAGER

ENGIN’G

FINANCE

PERSONNEL

MARKETING

Pure Project Organization structure

Dedicated Project Team

FIGURE 3.2

Pure Project Organization structure

P.M is a senior level person.  P.M has total authority/responsibility  Overall arrangement is temporary but persons

working on FULL TIME basis on Project.

Similar to the functional organization structure Similar to the functional organization structure except all the departments are dedicated to the except all the departments are dedicated to the project project

Pure Project Organization

The project manager has full line authority over the project

All members of the project work force are directly responsible to the project manager, there are no functional division heads whose permission must be sought.

Because the authority is centralized, the ability to make a swift decision is enhanced

Advantages

Unity of command exists

Accountability is clearly placed in one person

Strong/short communication channels

High level of commitment to project schedule, Quality and cost goals

Clearly defined customer focus

Rapid reaction time due to ability to make swift decisions

Advantages

• Each project tends to be fully staffed which can lead to a duplication of effort in every area from clerical staff to technological support.

• The need to ensure access to technological knowledge and skills that results in an attempt by project managers to stockpile equipment and technical assistance.

Uncertainty about job after the project Tendency to retain personnel longer than needed Difficult to share individuals/expertise across projects

 

Disadvantages

Suitability

Large projects Long-term projects “Crash” projects – emergency response

MATRIX ORGANIZATION STRUCTURE

THE MATRIX ORGANIZATION

An organization structure that assigns specialists from different functional departments to work on one or more projects being led by project managers.

MATRIX ORGANIZATION STRUCTURE

MATRIX ORGANIZATION STRUCTURE

MATRIX ORGANIZATION STRUCTURE

MATRIX ORGANIZATION Matrix structure has same format as a mathematical Matrix structure has same format as a mathematical

matrixmatrix A combination of pure functional and pure project.  No Separate staff for project – people from

functional departments temporarily assigned to the project/s.

Advantages• The use of a project team which is dynamic and

able to view problems in a different way as specialists have been brought together in a new environment.

• Project managers are directly responsible for completing the project within a specific deadline and budget.

• The project is the point of emphasis• Access to entire technology of firm• PM responsible for the project• Flexible utilization of personnel across projects

Advantages

There is a better balance between time, cost and performance

Authority and responsibility are shared Stress is distributed among the team

Disadvantages

Violates one-boss principleViolates one-boss principle Unity of commandUnity of command Communication may be chaoticCommunication may be chaotic PM controls administrative decisions (when and what the PM controls administrative decisions (when and what the

people assigned to the project will do); functional people assigned to the project will do); functional managers control who will be assigned to the project, managers control who will be assigned to the project, This thing may create conflict.This thing may create conflict.

Suitability

Moderate size projects Projects where efficiency is paramount need

Weak matrix structure

Weak matrix structure

No assigned project manager Team members are assigned to several

projects, in addition to their line functions (daily functions)

Team remain under control of functional/line manager

Strong matrix structure

Balanced matrix