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Project Management: Module - 05

The document discusses organizational structure and its key components. It describes the major types of organizational structures including functional, divisional, and matrix structures. It outlines the benefits of a good structure including specialization, performance, control and communication. The advantages and disadvantages of each structure type are also summarized. Finally, it defines key structural elements such as departmentalization, authority, span of control and centralization/decentralization.

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Jeyanayagam Jeyathees
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28 views22 pages

Project Management: Module - 05

The document discusses organizational structure and its key components. It describes the major types of organizational structures including functional, divisional, and matrix structures. It outlines the benefits of a good structure including specialization, performance, control and communication. The advantages and disadvantages of each structure type are also summarized. Finally, it defines key structural elements such as departmentalization, authority, span of control and centralization/decentralization.

Uploaded by

Jeyanayagam Jeyathees
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Module - 05

Project Management

K.Elamkumuthan
BA-TM, BSc-IT, MSC-IT, MBA_PM
Mob : 0776578420 , email : ekthan@yahoo.com
Organizational Structure
 Organizing
 Arranging the activities of
the project/ enterprise in
such a way that they
systematically contribute to
the enterprise’s goals.

 Organizational Structure
 Formal system of task and reporting
relationships showing how workers use
resources.
Major Types of
Organizational Structure

 Functional structure

 Divisional structure

 Matrix structure
Benefits of a Good Organizational Structure

• Facilitates Specialization
• Better Employee Performance
• Control Over Resources
• Easier Communication
• Easy accessible
• Effective planning
• Encourages creativity
• Eliminates overlapping and duplication of work
Functional Organizational Structure
A form of organization that groups a Business /
Project’s activities around essential functions such
as manufacturing, sales, or finance.

CEO

Finance Production Marketing


Functional Structure
Advantages Disadvantages
 Specialisation – each
 Closed communication
could lead to lack
department focuses on
of focus
its own work
 Departments can
 Accountability – become resistant
someone is responsible to change
for the section  Coordination
 Clarity – know your and may take too long
others’ roles  Gap between top and
bottom
Types of Divisional Organizational
Structure
Grouping divisions around a Project / firm’s
products or services, or each family of
products or services; also referred to as a
departmental organization.

 Different forms of divisional structure


 Product/ Project structure
 Geographic structure
 Market structure.
Product Structure

An organizational structure composed of separate


Projects/ business units within which are the
functions that work together to produce a specific
product for specific customer.

CEO

Consumer Lighting Medical


Products Products Systems
Geographic Structure

Separate departments are established for each


of the regions, states or countries in which the
enterprise does business.

CEO

Northern Western Eastern


Region Region Region
Market Structure

Departments focus on particular marketing


channels, such as drugstores or grocery stores.

CEO

Drugstore Grocery store Department


Channel Channel Store channel
Divisional Structure
Advantages Disadvantages
 Clear focus on market  Duplication of functions
segment helps meet  Negative effects of
customers’ needs
competition
 Positive competition
between divisions  Lack of central control
 Better control as each over each separate
division can act as division
separate profit centre  Requires more
 Easier to judge managers with general
performance management abilities.
Matrix Organizational Structure
An organization structure in which employees ( ) are
permanently attached to one department but also
simultaneously have ongoing assignments in which they report
to project, customer, product, or geographic unit heads.
CEO

Engineering Marketing Design

Project A
Manager

Project B
Manager

Project C
Manager
Matrix Organizations
Advantages Disadvantages
 Access to  Confusion of
expertise. command.
 Stability of
 Power struggles
permanent
department and conflicts.
assignments for  Lost time in
employees. coordinating.
 Allows for focus  Excess overhead
on specific for managing
projects, products, matrix functions.
What Is Organizational Structure?
Work Specialization
The degree to which tasks in the organization are
subdivided into separate jobs

Division
DivisionofofLabor
Labor
•• Makes
Makesefficient
efficientuse
useofofemployee
employeeskills
skills
•• Increases
Increasesemployee
employeeskills
skillsthrough
throughrepetition
repetition
•• Less
Lessbetween-job
between-jobdowntime
downtimeincreases
increasesproductivity
productivity
•• Specialized
Specializedtraining
trainingisismore
moreefficient
efficient
•• Allows
Allowsuse
useofofspecialized
specializedequipment
equipment
What Is Organizational Structure? (cont’d)

Departmentalization
The basis by which jobs are grouped together

Grouping
GroupingActivities
Activitiesby:
by:
•• Function
Function
•• Product
Product
•• Geography
Geography
•• Market
Market
•• Matrix
Matrix
What Is Organizational Structure? (cont’d)
Authority
The rights inherent in a managerial position to give orders
and to expect the orders to be obeyed

Chain of Command
The unbroken line of authority that extends from the top
of the organization to the lowest level and clarifies who
reports to whom

Unity of Command
A subordinate should have only one superior to whom he
or she is directly responsible
What Is Organizational Structure? (cont’d)
Span of Control
The number of subordinates a manager can efficiently and
effectively direct
Wider
WiderSpan
SpanConcept
Concept
Wider
Widerspans
spansofofmanagement
managementincrease
increase
organizational
organizationalefficiency
efficiency

Narrow
NarrowSpan
SpanDrawbacks
Drawbacks
••Expense
Expenseofofadditional
additionallayers
layersofofmanagement
management
••Increased
Increasedcomplexity
complexityofofvertical
verticalcommunication
communication
••Encouragement
Encouragementofofoverly
overlytight
tightsupervision
supervisionand
and
discouragement
discouragementofofemployee
employeeindependence
independence
Contrasting Spans of Control

Narrow Span Wider Span


What Is Organizational Structure? (cont’d)

Centralization
The degree to which decision making is concentrated at a
single point in the organization.

Decentralization
The degree to which decision making is spread
throughout the organization.

Formalization
The degree to which jobs within the
organization are standardized.

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