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

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 PERSONNEL ENGIN’G MARKETING FINANCE PROJECT MANAGER ENGIN’ G FINANC E PERSONN EL 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 except all the departments are dedicated to the project Similar to the functional organization structure except all the departments are dedicated to the 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 Matrix structure has same format as a mathematical matrix Matrix structure has same format as a mathematical matrix 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

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 principle Violates one-boss principle Unity of command Unity of command Communication may be chaotic Communication may be chaotic PM controls administrative decisions (when and what the people assigned to the project will do); functional managers control who will be assigned to the project, This thing may create conflict. PM controls administrative decisions (when and what the people assigned to the project will do); functional managers control who will be assigned to the project, This thing may create conflict.

Suitability Moderate size projects Projects where efficiency is paramount need

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