Organizational structures are arrangements or frameworks that govern the hierarchy of employees, its function, workflow, and reporting system.
The organisation structure is an enterprise environmental component that significantly influences how you conduct yourself and how your firm operates.
A Project Organization is a structure that enables the coordination and execution of project operations. Its primary objective is to foster relationships between team members while minimising interruptions, overlaps, and disagreements. The organisational structure that will be utilised for the project is one of the most significant factors in project management.
Types of Organizational Structures
These are four different types of organizational structures.
- Functional structure: Organizes employees based on their specialized functions or departments.
- Project-oriented structure: Organizes employees based on specific projects or tasks.
- Matrix structure: Combines functional and project-oriented structures, assigning employees to both a functional department and a project team.
- Composite structure: A combination of two or more different organizational structures, tailored to meet the specific needs of the organization.
Functional organisations, or centralised organisations, are entities with a distinct separation of business divisions and their corresponding tasks. Communication is typically lengthy and formal, passing via the hands of senior managers and departmental leaders.
The disadvantage of the structure is that it has the potential to erect walls between different tasks, and it might be ineffective if the firm has a wide variety of products or target markets. But sometimes they become unquestionably necessary due to their highly specialised skill and pursuit of technical excellence.
The matrix organisation structure is a combination of functional and project-based organisation structures. There are two command hierarchies visible in a matrix organisation structure: vertical and horizontal. An employee may be a member of a functional group, but he may also be assigned to a project. This design combines the best of both worlds.
In a matrix system, certain individuals typically report to multiple supervisors (usually two). The first supervisor will be their functional manager, while the second is typically a project manager.
In a robust matrix organisation, the project manager has more authority than the functional manager. For instance, the project manager has input on resource allocation.
A project manager functions as a project coordinator or project expeditor within a weak matrix framework. A project coordinator can influence the allocation of resources, whereas a project expeditor only acts as a liaison between the client and team. Overall, the functional manager reigns supreme in a weak matrix.
In a balanced matrix, both elements have equal weight. Due to a lack of clarity on to whom a project’s resources should report, communication issues may arise.
In projectized/project organisations, activities are organised into programmes or portfolios and then implemented through projects.
Here, the project manager is in control and has complete authority over the project. The entire team reports to him. In contrast to the functional organisation structure, the projectized organisation structure is contrary. Either there will be no functional manager, or if one exists, his job and authority will be extremely constrained.
Advantages of Different Organizational Structures
Advantages/Disadvantages of different organizational structures:
- Functional structure:
- Clear lines of authority
- Efficient use of specialized skills and knowledge
- Better coordination and control of related activities
- The Project Manager has no Authority.
- Employees focus in their operational work
- Project-oriented structure:
- Focuses resources on specific projects
- Provides flexibility for different projects
- Better control over project timelines and budgets
- No Home for Team; they are either moved to other projects, company or country
- Less efficient use of resources as every time the project starts from scratch
- Matrix structure:
- Balances functional and project needs
- Allows for cross-functional collaboration and problem-solving
- Better resource utilization across multiple projects
- Administration takes a toll because of multiple hierarchies
- Conflict prone
- Composite structure:
- Can be customized to meet specific organizational needs
- Can create a synergistic effect by combining different structures
- Facilitates adaptation to changing business environments.
Project Manager, Project Coordinator and Project Expeditor
These are three different roles in project management:
- Project Manager:
A person is responsible for planning, executing, and closing a project. They are responsible for the overall success of the project, including ensuring that it is completed on time, within budget, and to the satisfaction of stakeholders.
- Project Expeditor:
A person who helps to ensure that a project is completed on time. They often work closely with the project manager to identify and resolve any delays or roadblocks that could impact the project timeline.
- Project Coordinator:
A person who supports the project manager by helping to organize and coordinate various aspects of the project. This may include scheduling meetings, tracking project tasks, and communicating with project team members. The project coordinator plays an important role in ensuring the smooth operation of the project and the efficient use of resources.
Organizational Structures Influence on Project
Factors to consider in selecting an organizational structures
The organizational structure can have a significant impact on the success of a project. Some of how organizational structure can influence a project include:
- Resource allocation: The structure of an organization can determine who has control over the allocation of resources for a project and how those resources are distributed.
- Communication: The structure of an organization can affect the flow of communication between project team members and stakeholders, impacting the effectiveness of decision making and problem-solving.
- Decision-making: Different organizational structures can result in different decision-making processes, which can impact the speed and effectiveness of decision making on a project.
- Responsibilities and accountability: The structure of an organization can determine the roles and responsibilities of different team members and stakeholders, as well as their levels of accountability for project outcomes.
- Conflict resolution: Different organizational structures can result in different approaches to conflict resolution, which can impact the effectiveness of problem solving and decision making on a project.
- Adaptability: The structure of an organization can impact its ability to adapt to changes in project scope, timeline, or resources, which can impact the overall success of the project.