1. Management organization
Definition : Management structure establishes the relationship between the project participants together with defining their duties, responsibilities and lines of authority and lines of communication.

2. Organization Structure
Types Of Organization Structure:
Functional
Divisional
Matrix

3. The Diagram
Representing the connections between the various departments within an organization
Provides information about the various tasks performed within an organization and the formal lines of authority between them.

4. The Basic Dimensions of Organizations
Hierarchy of Authority: a configuration of the reporting relationships within
organizations (i.e., who reports to whom)
Tall organizations - have many levels in the hierarchy
Flat organizations - have few levels in the hierarchy

5. The Basic Dimensions of Organizations
Division of Labor : process of dividing the many tasks in an organization into specialized jobs
The more tasks are divided into separate jobs, the more those jobs are specialized

6. The Basic Dimensions of Organizations
Span of Control : the number of subordinates in an organization who are required to report to each manager
Wide span - many subordinates report to a manager
- typical of flat organizations
Narrow span - few subordinates report to a manager
- typical of tall organizations

7. The Basic Dimensions of Organizations
Chief
Executive
Tall hierarchy
Relatively narrow
span of control

8. The Basic Dimensions of Organizations
Chief
Executive
Flat hierarchy
Relatively wide
span of control

9. Functional Organizational Structure
Also called Traditional organization structure.
Based on the sub-division of disciplines into separate departments together with vertical hierarchy
vertical lines of authority
Objective is to emphasize technical excellence.

10. Functional Departments

11. Functional Organization

12. Functional Organization

13. Functional Organization
Project Coordination
Red boxes represent staff engaged in project activities

14. Advantages of Functional Organization
Simple
Lines of communication within department are well established
Clearly defined responsibility and authority for work within the departments

15. Disadvantages of Functional Organization
No Single point of responsibility as project scope moves from one department to another department leading to coordination chaos
It offers excellent facility within its own department ; but for a multi-disciplined projects which calls for interaction with other department then the system may be lacking

16. Disadvantages of Functional Organization
Lengthen the lines of communication and slow down the response time
Formal line of communication is through the functional managers
Competition & conflict between functional departments
Department work may take priority over project work

17. Suitability The functional organization is the primary client
The project is small

18. Divisional Organizational Structure
Positions are grouped according to similarity of products, services, or markets. There are three types of divisional structure.
Product Structure
Geographic Structure
Customer Structure

19. Product Organizational Structure
Product structure groups employees together based upon specific products produced by the company. An example of this would be a company that produces three distinct products, "product a", "product b", and "product c". This company would have a separate division for each product.

20. Product structure characteristics
Similar to the functional organization structure except all the departments are dedicated to the product/project
The Project Manager has high level of authority to manage and control the project resources
Self contained unit within own technical staff and administration

21. Vice President Research & Development
Product Structure
Vice President
Sales and Marketing
Vice President Research & Development
Vice President Materials Management
CEO
Vice President Finance
Canned
Soups
Division
PDM
Frozen
Vegetable
Entrees
Baked
Goods
4 - 21
4-19

23. Chief Executive Officer
Product A
Product B
Sales &
Marketing
Human
Resources
Finance
Production
Engineering
Accounting
Sales &
Marketing
Human
Resources
Finance
Production
Engineering
Accounting 23

24. Advantages of Product/Project structure
Relatively simple means of working on a project. Conflicting responsibilities are minimized.
Accountability is clearly placed in one person
PM has full authority over project
Simplified coordination across functions
High level of commitment to project schedule, technical and cost goals

25. Advantages of Product/Project Structure
Strong orientation to customer requirements
Rapid reaction time due to ability to make swift decisions
accurate performance measurement 25

26. Disadvantages of a product/Project structure
Lack of “big picture” companywide orientation
Duplication of effort increases organizational costs
Difficult to share individuals/expertise across projects
Tendency to retain personnel longer than needed
Uncertainty about job after the project

27. Suitability Large projects Long-term projects
“Crash” projects – emergency response
Projects that change into permanent functional organizations

28. matrix organizational
Structure

29. Matrix Structures
The matrix organizational structure is one in which functional and staff personnel are assigned to both a basic functional area and to product manager
The matrix form is intended to make the best use of talented people within a firm by combining the advantages of functional specialization and product-project specialization

30. Matrix Structures
This structure is one where there is a combination of functional and divisional structure at the same time
Two ‘chains of command’, one vertical and one horizontal

31. Objective is to implement a consistent process that delivers reliable analysis.2

34. Matrix Structures
A matrix is a highly flexible form that is readily adaptable to changing circumstances.
Matrix structures rely heavily on committee and team authority.
Some companies use the matrix organization as a temporary measure to complete a specific project. The end of the project usually means the end of the matrix

35. Suitability Moderate priority, moderate size projects
Projects where efficiency is paramount need
When project activities closely correlate with those inside the functional organization
Objective is to implement a consistent process that delivers reliable analysis. 2

36. Matrix Structure Disadvantages Role conflict, ambiguity
decentralized decision making
strong project coordination
flexible use of human resources
efficient use of support systems
Disadvantages
Role conflict, ambiguity
potential confusion over authority & responsibility
increased potential for interpersonal conflicts

37. The Matrix Structure Strengths (cont.) Description More flexibility
Efficient allocation of specialists
Economies of scale
Weaknesses
Confusion created
Stress placed on workers
Increased ambiguity
Unclear reporting relationships
Power struggles
Role conflicts
Unclear expectations
Description
Combines two forms of departmentalization
functional
product
Breaks unit of command
Dual chain of command
Strengths
Facilitates coordination
Complex and independent activities
Better communication

38. Choosing a structure Size of project Strategic importance
Novelty, need for innovation
Need for integration (# depts. involved)
Environmental complexity (# of external interfaces)
Budget, time constraints
Stability of resource requirements
Small project focused entirely on the functional department
Large project involving many different departments.
Objective is to implement a consistent process that delivers reliable analysis. 2

39. CONCLUSION focus is on in-depth application of a technology
Functional Form
focus is on in-depth application of a technology
Most of the talent/expertise resides in one functional area
Selection of metrics and VEPs measured. 3

40. CONCLUSION Product Form
firm engages in a large number of similar projects (construction)
one-time, highly specific unique tasks that is not appropriate for a single functional area ( product development: marketing, design engineering,
manufacturing engineering, quality engineering)

41. CONCLUSION Matrix Form
integration of inputs from several functional areas
involves reasonably sophisticated technology
Employees effectively have two bosses
Conflicts with the principle of ‘unity of command’
technical specialists are not required full-time