Organizational Structure and Project Planning

SPM -->>

• Structures are created within an organization to manage input, processing and output of resources.
• Many organization adopt structure based upon functions, some based on products or customers.
• These structures may use brand management or geographical divisions. 
• As long as firm performs well, a particular structure and strategy will exist.
• When it does not do well, change in structure is needed.

There are three types of Organization Structures:

1. Functional Organization

2. Project Organization

3. Matrix Organization.

1. Functional Organization:

• traditional organizational form
• based upon organizing resources to perform specialized tasks or activities in order to attain the goals of organization.
• Projects in function organization are typically coordinated through customary channels and housed within a particular function.
• Two main issues that must be resolved at outset of project:

           1. Who will be responsible for project?

           2. What resources will each sub-unit provide?

 Advantages:-

1. Increased flexibility.

2. Breadth and depth of knowledge and experience.

3. Less duplication (coordination of resources and activities can lead to less duplication of resources)

Disadvantages:-

1. Determining authority and responsibility:- who has authority and responsibility for a project must be resolved at outset, especially when project involves more than one functional area.

2. Poor Response Time:- Projects may take longer if important decisions have to pass through several layers of management and across several functional areas.

3. Poor Integration:- The individuals in a function area may act in their own best interests instead of taking holistic view. Duplication may increase. 

2. Project Organization:-

Supports project as the dominant form of business.

Each project is treated as separate and relatively independent unit within the organization.

Project Manager has sole authority over and responsibility for project and its resources, while organization provides financial and administrative controls.

Both Project Manager and Project team are typically assigned to particular project on a full-time basis.

Advantages:-

1. Clear Authority and responsibility.

2. Improved communication.

3. High level of integration.

Disadvantage:-

1. Project Isolation.

2. Duplication of effort.

3. Projectitis

3. The Matrix Organization:-

• It is combination of vertical functional structure and horizontal project structure.
• provides many opportunities and challenges.
• Ability to integrate areas and resources throughout an organization
• each project team member will have more than one boss, leading to the possibility of confusion, frustration, conflict and mixed loyalties. 
• Matrix organization can take on various forms that can create hybrid organizations. The most common forms include:-

       Balanced Matrix:- Project manager focuses on defining all of the activities of project, while function managers determine how those activities will be carried out.

     Functional Matrix:- Project Manager focuses on coordinating the project activities, while functional manager completes activities related to particular area.

      Project Matrix:- Project Manager has most authority and responsibility for defining and completing the project activities, while functional managers provide guidance and resources, as needed.

Advantages:-

1. High level of integration

2. Improved communication.

2. Increased project focus.

Disadvantages:-

1. Higher potential for conflict.

2. Poorer response time.