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Management organization/ organization structure
Three basic organizational structures
Functional
Project
Matrix
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PROJECT AS PART OF FUNCTIONAL ORGANIZATION
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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
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Functional Organization Structure
C.E.O
VP Finance
VP Marketing
VP Manufacturing
VP Personnel
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Functional Organization Structure
M arke t R es .
A d v. an d P rom .
S a les A d m .
M arke tin g
D es ig n E n g .
E lec trica l E n g .
M ech . E n g .
Q u a lity E n g .
E n g in eerin g
P rod . P lan n in g
P u rch as in g
In d u s t. E n g .
Too lin g
P rod u c tion
F in an c ia l P lan n in g
B u d g e ts
G en era l A cc tg .
C os t A cc tg .
F in an ce
P res id en t
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Functional Organization Structure
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Functional Organization Structure
S ta ff
S ta ff
S ta ff
F u n c tion a l M an ag er
S ta ff
S ta ff
S ta ff
F u n c tion a l M an ag er
S ta ff
S ta ff
S ta ff
F u n c tion a l M an ag er
C h ie f E xecu tive
Red boxes represent staff engaged in project activities
Project Coordination
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Functional Organization Structure
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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
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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
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suitability
small projects
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Pure Project Organization
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Suitable to projects that are very large & complex and/or geographically located away from the parent organization.
Pure Project Organization
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Pure project organization structure
CEO
PERSONNELENGIN’G MARKETINGFINANCE
PROJECT MANAGER
ENGIN’G
FINANCE
PERSONNEL
MARKETING
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Pure Project Organization structure
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Dedicated Project Team
FIGURE 3.2
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Pure Project Organization structure
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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
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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
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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
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• 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
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Suitability
Large projects Long-term projects “Crash” projects – emergency response
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MATRIX ORGANIZATION STRUCTURE
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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.
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MATRIX ORGANIZATION STRUCTURE
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MATRIX ORGANIZATION STRUCTURE
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MATRIX ORGANIZATION STRUCTURE
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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.
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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
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Advantages
There is a better balance between time, cost and performance
Authority and responsibility are shared Stress is distributed among the team
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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.
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Suitability
Moderate size projects Projects where efficiency is paramount need
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Weak matrix structure
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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
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Strong matrix structure
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Balanced matrix