How Organizational Structures Affect Projects and Project Management




It is correct that the structure of an organization may have a major impact on project management.

Think about your personal experience. Is it tough to find grip on your projects? Are there several layers of authority that you have to navigate to get approvals for basic tasks? Does your budget get cut due to competition for limited funding? Do your jobs lose out in favor of day-to-day routine surgeries? And you thought it was something you're doing, or failing to perform! Well it may have been, but it's more likely that you're feeling the impacts of the organizational structure in which you operate. Recognizing your working environment better will help you to rise above organizational issues and also easy the way to successful project management.

By studying three different organizational structures - functional, matrix and projectised - we shall discover how every different organizational design affects project administration.

Functional Organizational Structure. These firms are organized into operational divisions based on primary functions such as engineering, human resources, finance, IT, planning and coverage. Each various operational branch works independently and isolated groups of workers in a division report into a functional manager. The functional manager generally both allocates and tracks the job and carries out tasks like performance analysis and setting payment levels. In this model project supervisors have very limited authority. Functional organizations are set up for continuing operations as opposed to jobs and so this organizational arrangement is often found in firms whose chief purpose is to generate standardized goods and services.

Matrix Organizational Structure. In a matrix organization control is shared. The job manager shares responsibility for the project with a number of individual functional managers. Shared responsibilities can include assigning priorities and tasks to individual team members. But practical managers still make the final decisions about who will operate on jobs and are still responsible for government. Project managers take charge of allocating and organizing the work for your designated project staff. In this type of structure there's a balance between continuing operations and projects, so it is a common arrangement for organizations that have these dual functions. For example, local body organizations that are responsible for both maintaining existing infrastructure (ongoing operations) and commissioning the building of new infrastructure (jobs) frequently have matrix structures.

Projectised Organizational Structure. In a projectised company the project director has complete authority over the job. This includes the ability to establish priorities, employ tools, and to guide the work of the project team. All members of the staff report directly to the project manager and everybody is assigned to your project. After conclusion of the undertaking, resources will be re-assigned to another project. This sort of construction is common in firms that operate on size-able, long-term projects, such as in the construction market.

Take a moment to reflect on which type of organizational arrangement you work in before we move on to discuss how these organizational structures affect jobs. Then see if you understand any of the problems raised.

So what would be the consequences for project management?

In a functional organization, projects that exist within a single operational division generate no particular organizational problems, but jobs that cut across functional divisions can be difficult to manage. Why? Since the project manager has no direct operational authority and must get continual cooperation and support from functional managers of other divisions to be able to meet project objectives. This can get complicated.

Because the matrix structure gives authority to both project managers and operational managers the outcome is to provide a more seamless division of labor and finally to create a stronger team culture. However, the potential for conflict between functional managers and project managers nevertheless exists because there's still resource conflict. Everybody who is on a project team has two managers - their operational supervisor as well as their project supervisor.

In a projectised organization jurisdiction is centralized. Because projects are removed from functional divisions the lines of communication are shortened. These two factors enhance the ability to generate swift decisions. Project teams develop a solid sense of identity which in turn makes a high degree of commitment from staff members. On account of their participation in consecutive projects of a similar nature projectised organizations can create and keep up a long-term body of experience and techniques in technical areas.

It is apparent that projectised organizations make it easier to run projects because the entire structure is put up for that purpose. But if you're managing a project within other organizational structures, then recognizing and understanding that the impacts will raise your awareness of the potential project management pitfalls, so that you can be proactive about resolving them. Communication, conflict resolution and team building will be key to your success.


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