Organisational structure refers to the pattern of relationships among the various components exiting in an organisation. It establishes the relationship between individual occupying various positions in the organisations. The report describes the challenges faced by the project manager when dealing with different kind of organisational structure. The study starts with a discussion on the various types of organisation structure. It further analyses the characteristics of each organisational structure and tries to find out the challenges faced by the project manager for executing the project under different organisational structure.
2. TYPES OF ORGANIATIONAL STRUCTURE
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The structure of an organisation depends on various factors. It can be seen that in most of the oganisations the structure is not predetermined but it is evolved with time. The study carried out by Pearson, 2010 states that the external environment of the organisation plays an important role in deciding the structure of any organisation. Factors like customer mix, competitor actions, government regulations and policies, economic conditions, availability of resources and technology plays pivotal role in formulating the organisational structure (EGPL, 2004). The structuring of organisations can be carried out based on functions, projects or combining both. The different types of organisational structure are given below.
a. Functional organisation
Functional organisations are structured by grouping people performing similar activities (Pearson, 2010). All activities connected to a particular function are placed under one unit. Sub units are created under units to cater to the different activities coming under one unit. This results in the organisational structure to look like a pyramid as shown in Figure 1. The functional organisational structure offers the maximum flexibility and efficiency in the usage of staff (Bobera, 2008). The allotment of an individual for a particular function increases the efficiency in the long run which helps to maintain the intellectual of the organisation. The formation of structure in terms of structure helps to avoid duplication of activity.
Figure 1 Functional organisational structure (Bobera, 2008)
b. Project organisation
Project organisation is structured by grouping people into teams to achieve a common mission (Pearson, 2010). This type of organisational structure combines a team of experts from different disciplines to achieve a common goal within a given amount time and resources. Organisations which adopt project organisational structure also have some staff position to cater to the requirements of different projects (Shtub and Karni, 2010). The main advantage of the structure is that the main focus of the team is on the mission or the clients for whom the project is carried out. The structure of a project organisation is given in Figure 2.Bobera (2008) states that project manager play a crucial role in project organisational structure. He functions as the central authority for implementing the necessary actions to achieve the goal of the project within the given time.
Figure 2 Project organisational structure (Shtub and Karni, 2010)
C. Matrix organisation
Matrix organisation tries to find a balance between project and functional organisational structure. The matrix structure creates a dual hierarchy in which there is a balance of authority between the project emphasis and the firm’s functional departmentalization (Pearson, 2010). Matrix organisations help to achieve quick response to external requirements as well as good operating efficiency. The structure of a matrix organisation is given in Figure 3.
Figure 3 Matrix organisational structure (Pearson, 2010)
3. CHALLENGES FACED BY PROJECT MANAGER
This section discusses the challenges faced by the project manager in dealing with different types of organisational structure.
a. Challenges in functional organisation structure
The staff in a functional organisation is structure based on function and has a clear superior. One of the advantages of this type of structure is that it is easy to find out experts required to work in a project due to the availability of experienced staff in the structure. This will help the project manager to identify required resources at lower cost and time (University of Utah, 2009).
The project manager has to face many challenges in functional organisational structure due to the simple fact that this structure is not designed for executing a project. The project scope of this structure is limited to the boundaries offered by the function assigned to each team. It can be seen that even though the project manager guides the project based on client requirements, the interests of client is getting only secondary importance in this type of structure. The staff in the functional structure is more oriented towards one type of function. The job orientation of staff acts like a hurdle for Project manager due to the fact that multidisciplinary job capability of staff is highly essential for the successful implementation of project. Bobera (2008) states that even though authority and responsibility of project are clearly defined for the project manager, it is not explicit for his team members due to the functional structure of organisation. This creates lack of commitment and reduced feeling of responsibility and affects the successful completion of the project (Impacto4dev, 2007). The motivational opportunity of the project manager on his team members is also limited due to the reduced control.
The resources and budget in the functional organisational structure is controlled by the functional manger. This acts like a hindrance to the smooth functioning of project manager because of the non-availability of human and financial resources at the correct time and place which is highly essential for the management of the project.
b. Challenges in project organisation structure
Project organisation structure can be considered as the other extreme of functional organisation structure. Studies by University of Utah (2009) points out that even though the project organisation structure offers great flexibility in terms of managing a project, project manager has to face some challenges for the execution of the project.
Shtub and Karni (2010) states that a project organisation deals with a number of projects at the same time which call for the requirement of highly specialized expertise in different project at the same time. This creates a challenge for the Project manager to ensure the availability of the right kind of person for his project. It is also seen that some projects appoints experts on full time basis even though the full time participation of the person is not required. Under these circumstances Project manager finds it difficult to divide the job equally among his team members.It is also found the scope of individual learning is very limited in project organisation structure due to the non-availability of repetitive jobs. Studies by Flannes (2004) show that individual learning skills is one of the important factor for the success of a project. The lack of learning opportunity also stands as a hurdle for project manager in terms of availability of experienced man power.
Studies by Techrepublic (2001) shows that Project manager can easily justify and manage the resources in long duration of projects while it will be difficult in small duration projects. It is found that the requirement of resources like people, technology etc. will be between projects. The execution of small duration projects can cause wastage of human and technological resources which can cause challenges for the project manager in terms of the viability of the project.
c. Challenges in Matrix organisation structure
Matrix is a grid like organisational structure that allows a company to address multiple business dimensions using multiple command structures Studies show that in matrix organisation project manager is a part of functional organisation structure and he will change to project organisation structure as and when required. Project manager may devote only part of his time for small projects while he will be fully engaged in complex projects. The organisational structure of matrix organisation ensures that project manager is the single contact point for the customer (Thomas and Laura, 2004).
Project manger has got certain advantages in matrix organisation like quick and easy transfer of resources, increased information flow through lateral communication channels and innovative solutions to complex problems. It is found that project manager has to face some challenges in Matrix organisation along with the mentioned advantages. Studies by Bobera (2008) shows that good clarity is existing for the power of decision making in functional and project organisational structure.The decision making authority is very balanced in Matrix organisation and any ambiguity in it can cause chaos which leads to difficulty for the project manager to lead the project.
Matrix organisation is having the opportunity to share resources among projects. This may cause shortage of resources in projects when a number of projects are dealt at the same time. It will lead to conflict among project managers and can affect there morale. The definition of organisation structure as stated by Bobera (2008) brings out that in matrix organisation the administrative decisions are taken by the project manager while the technical decisions are controlled by the manager in the functional department. The capability of the project manager to negotiate for the technical resources at the correct time is a key issue for the success of the project.
The study analysed the different forms of organisational structure and the challenges faced by project manager under each structure of organisation. It is found that in functional organisational structure the control of project manager on his team employees is less due to the functional nature of working of this structure. The study also revealed that the client’s requirements are getting only secondary importance in this structure which is acting as a hurdle for project manager for the successful completion of the project. The research also points out that even tough project organisational structure is designed for managing projects, project manager faces the challenge of getting the right kind people for carrying out the job at the right time. He also finds difficulty in promoting individual learning. The study also show that managing small projects is difficult due to the ambiguity in the allocation of resources for the project. The problem of lack of clarity in decision making can cause chaos in matrix organisation which can hinder the smooth flow of project activities. The study concludes that the management of project under any organisational structure is a big challenge. The ability of project manager to negotiate and communicate with people plays a big role to overcome the challenges and to handle the project in a smooth and successful way.
a. Type of organisation structure which is most effective for managing projects in a small to medium sized enterprise with 150 employees.
Small and medium sized enterprise are either in the emerging or growth stage. The enterprise in the emerging stage is usually controlled by the founder. He makes all decisions and employees under him execute his decisions. The simple organisational structure for an emerging organisation is given in Figure 4.
Figure 4 Simple organisational structure (Craig and Cole, 2010)
The organisation slowly transforms from emerging stage to the growth stage. During this stage owner realizes that he will not be able to handle the entire functions of the company. He starts inducting new people to the organisational structure to perform various functions. The function includes activities like marketing, sales, human resources and accounts. The organisational structure for a medium sized organisation is given in Figure 5. It can be seen that the structure represents a functional organisation where individual teams are made to perform each function. The study also shows an enterprise with 150 employees cannot handle more number of projects simultaneously. This also justifies the adaptability of functional organisational structure for small and medium sized enterprise for managing projects.
Figure 5 Organisational structure for medium sized enterprize (Jones International, 2010)
PART – B
The Gantt chart for the advertising campaign of PM computers is given in Figure 6. The start time, finish time and slack of each activity is given in Figure 7.
Figure 6 Gantt chart for the advertising campaign of PM computers
Figure 7 Start time, finish time and slack of each activity
Figure 8 Network diagram for the advertising campaign of PM computers
It can be seen that the project starts on August 4, 2014 and ends on November 14, 2014. The present project is having two critical paths based on the given schedule. They are 1-3—8-12-15-17 and 1-3-4-10-11-14-17. The specified starting date in question is shifted by one day since August 3, 2014 is a Sunday. The project analysis shows that the slack of activity ‘developing print advertising layout with agency’ is zero. This means that the activity forms part of critical activity. Delay of four days in the activity delays the project by four days. The delay in the activity makes 1-3-4-10-11-14-17 as the critical path. The early finishing of design training course by two days will not affect the project schedule as this activity is not part of critical path. A delay of two days for activity ‘review and print of in-house material’ will not affect the project schedule as the slack of the activity is 11 days.
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Flannes, S. (2004) Effective People Skills for the Project Manager: A Requirement for Project Success and Career Advancement. Oakland: Flannes Associates. Available at: < www.sas.com/proceedings/sugi29/131-29.pdf> [Accessed 22 April 2014].
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Pearson (2010) ‘The organizational context’, Journal of Project Management, (2): pp. 30-69.
PM4DEV (2007) ‘Project management organizational structure’, Project Management for developmental organisations, 3(8): pp. 9-15.
Shtub, A. and Carni, R. (2010) ‘Organization and Organizational structures’, The dynamics of supply chain and process management, XIII: pp. 20-30.
TechRepublic (2004) Project Management Best practices. Texas: TechRepublic. Available at:
Thomas, S. and Laura, S.D. (2004) ‘Challenges and strategies of Matrix organisations’, Human Resource Planning, 28.1: pp. 39-48.
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Challenges Faced By the Project Manager. (2019, Mar 08). Retrieved from https://phdessay.com/different-challenges-faced-by-the-project-manager-when-working-within-the-alternative-organisational-structures-used-to-implement-projects/