Organizational Structures
Introduction The design of a company affects every aspect of the business such as the way its members communicate, how decisions are made, and how the work is delegated, etcetera (Dictionary.com, 2006). This layout is known as the organization structure formally defined by Wikipedia (2006) as, "the way in which the interrelated groups of an organization are constructed. From a managerial point of view the main concerns are ensuring effective communication and coordination." In respects to project management there are three primary organizational break downs they are functional structure, pure project structure, and matrix structure. We will take a look into each of these structures to better identify the similarities and differences between them.
Functional Structure In a functional arrangement, power or status is defined by a vertical hierarchy. This structure clearly defines the roles and responsibilities of its members and the chain of command is plainly outlined. (Kerzner, 2003). Functional structure is seen in large organizations such as the central government, polices forces and the armed forces. Large businesses have continuous rolling programs of similar repetitive or semi-repetitive work and this structure is typically used to improve systems, procedures, methods or products within the company. Due to the repetitive nature of the functional structure people are able to build a variety of skills that they can use from one project to the next. Projects within this structure would commonly be handled internally rather than externally. (Cogeco, 2006). When modifying systems or methods within a business it is beneficial for the company to have in-house employees who have direct contact with the work to handle the improvements. A huge disadvantage of this structure is that it is inflexible. (Kerzner, 2003). The flow of communication although clearly laid out has to pass through several different people; creating an issue if a quick decision needed to be
Functional Structure In a functional arrangement, power or status is defined by a vertical hierarchy. This structure clearly defines the roles and responsibilities of its members and the chain of command is plainly outlined. (Kerzner, 2003). Functional structure is seen in large organizations such as the central government, polices forces and the armed forces. Large businesses have continuous rolling programs of similar repetitive or semi-repetitive work and this structure is typically used to improve systems, procedures, methods or products within the company. Due to the repetitive nature of the functional structure people are able to build a variety of skills that they can use from one project to the next. Projects within this structure would commonly be handled internally rather than externally. (Cogeco, 2006). When modifying systems or methods within a business it is beneficial for the company to have in-house employees who have direct contact with the work to handle the improvements. A huge disadvantage of this structure is that it is inflexible. (Kerzner, 2003). The flow of communication although clearly laid out has to pass through several different people; creating an issue if a quick decision needed to be
References: (2006). Module 4 Project Management Organizational Structures and Standards. Retrieved on December 16, 2006 from http://home.cogeco.ca/~pcreighton/PMWEB/Module%2004.htm Kerzner, H. (2003). Project Management: A Systems Approach to Plan, Scheduling, and Controlling 8th Edition. John Wiley & Sons Inc. Organization. (2006). Dictionary.com. Retrieved on December 17, 2006 from http://www.dictionary.com Organizational Structures. (2006). Wikipedia the free online encyclopedia. Retrieved on December 17, 2006 from http://www.wikipedia.com