In: Operations Management
Projects occur within many different types of organizational structures and projects themselves tend to have varying structures as well. Organizational structures can be characterized as functional, matrix, or projectized (most commonly found in IT-based organizations where much of the work is project focused). Project teams may be made up of members on loan (both full- and part-time) from functional areas within an organization and those members may be active for all or part of the project’s length.
1. List at least one advantage and one disadvantage for one of the different types of project management organizational structures.
2. Illustrate the advantage and disadvantage using an example (Types: Functional, matrix, project, and mixed organizations).
3. Find one additional source beyond our texts as a source in your initial post.
The are many Organizational Structures defined. But for project management, the major types that are used are:
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Advantages and Disadvantages of Project Management Organization Structures and Examples
i) Functional
This type of structure is also known as the traditional structure. It more of a vertical organization with multiple hierarchies. The head of a department is skilled in a particular domain or function and there are multiple functional managers. Take Engineering company as an example. The electrical functional manager will hire electrical engineers under him or her and the mechanical functional manager will hire mechanical engineers under him or her. They both will look after their own departments separately.
Advantage - The employees are specialists within one department and they share knowledge with each other and always stay updated. Moreover, because they all have one boss, the order following mechanism and communication becomes simple. The example can be any Automobile company that requires multiple functions like, electrical, electronic, and mechanical.
Disadvantage - In this kind of structure, none of the employees have overall responsibility for the project. They are just responsible to complete their own piece of work. The employees are not fully utilized as well. The example can be the same stated above.
ii) Matrix
In today's world, this structure is very common in a project management company. Opposed to the functional structure, in this case, lines of authority flow both vertically and horizontally. It means employees report to their functional managers but at the same time, they are also assigned one or multiple project managers until the project or projects lasts.
Advantage
Employee utilization is maximum in this case. Also, the cost is minimized. An example can be any consulting company like Deloitte, the employees work on one or more projects. They are utilized to the maximum and they bring value to the firm at the same time.
Disadvantage
The disadvantage of this kind of structure is that some time is lost between the end of one project and the start of another one. Thus employees need time for transitioning from one project to another.
iii) Projectized Organization Structure
In this kind of structure, the organization arranges their activities in programs and portfolios. These programs and portfolios are executed with the help of individual projects. Each project has a project manager assigned and he is the whole and sole authority for that project. All the resources of the company are mainly utilized in implementing the project. The team working on the project can also be co-located until the project gets over. So, small companies who focus mainly on short-term and long-term projects can be a good example. For example, any project under the telecom company for laying down the cables.
Advantage
Due to single authority and point of contact, communication is easy and short. Decision making also becomes faster and the learning curve is faster for a new member.
Disadvantage
Due to a tight schedule and strict deadline, st times work environment can become stressful. the employees have a fear of losing their job after the project gets over.
iv) Mixed Structure
A mixed organizational structure is a mix of all different kinds of structures. In this case, some employees report to one or multiple managers. There can be both functional and project managers. The project managers may also report to the functional managers. One of the examples is Citigroup. They have a concept of Country Leader and Product Leader. They both work together whenever it is required for a project.
Advantages
This kind of structure ensures optimum utilization of resources. Learning opportunities are more as people from different departments come together to work on a project. This kind of structure is more flexible in nature and provides a lot of learning opportunities for employees.
Disadvantage
It requires a great deal of coordination and effort as compared to other structures. It can lead to stress for employees because they are reporting to more than one boss and at times the responsibilities may contradict.
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Source - Internet resource