Question

3. Discuss the advantages and disadvantages of housing projects within each of the three major organizational forms: functional, pure project or matrix organization. Explain the effects of the organizational form on coordination and interaction both within the project team and between the team and the rest of the firm.

Answer 1

The current types of organizational structure of project management are: functional organizational structure, project-based organizational structure and matrix organizational structure.

1. Functional organizational structure.
Functional organizational structure is to be managed in the current organization hierarchical structure, once the project begins operation, the various components of the project are taken by the functional units, each unit is responsible for its charged component. If the the project established, a functional area play a dominant role, functional areas on completion of the project, senior managers will be responsible for project coordination.

Advantages of this structure: First, the use of personnel with greater flexibility, as long as the choice of a suitable functional departments as the project supervisor, the department will be able to provide professional and technical personnel required by the project, and technology experts can also be used by different projects and after completion of the work can go back to his original work; Second, when the project team members leave or leave the company, the functions can be used as the basis for maintaining the continuity of the project; third, functional department can provide a normal career path for professionals.

The disadvantage of this structure is: First, projects often lack of focus, each unit has its own core functions of general business, sometimes in order to meet their basic needs, responsibility for the project will be ignored, especially when the interest taken in the project brought to the unit not the same interest; Second, such organization has certain difficulties in the inter-departmental cooperation and exchanges; Third motivation is not strong enough for project participants, they think the project is an additional burden, and not directly related to their career development and upgrading; Fourth, in such organizational structure, sometimes no one should assume full responsibility for the project, often the project manager is only responsible for part of the project, others are responsible for the other parts of the project, which leads to difficulties in coordination situation.

2. Project-based organizational structure.

Project organizational structure refers to the creation of an independent project team, the team’s management is separated from the parent organization’s other units, have their own technical staff and management, enterprise assigns certain resources to project team, and grant project manager of the largest free implementation of the project .

The advantages of this structure: First, focus on this project team, project manager is solely responsible for the project, the only task for project members is to complete the project, and they only report to the project manager, avoiding the multiple leadership; Second, the project team’s decision is developed within the project, the reaction time is short; Third, in this project, members work with strong power, high cohesion, participants shared the common goal of the project, and individual has clear responsibilities.

The disadvantage of this organizational structure: First, when a company has several projects, each project has its own separate team, which will lead to duplication of efforts and the loss of scalable economies; Second, the project team itself is an independent entity, prone to a condition known as “Project inflammatory” disease, that is, there is a clear dividing line between the project team and the parent organization, weakening the effective integration between project team and the parent organization; Third, the project team members lack of a business continuity and security, once the project ended, return to their original functions may be more difficult.

3. Matrix organizational structure.

Matrix organizational structure is a hybrid form, it loads a level of project management structure on the functional hierarchical structure. According to the relative power of project managers and functional managers, in practice there are different types of matrix systems, respectively, Functional Matrix: in this matrix, functional managers have greater powers than project managers); Project Matrix: in this matrix, project managers have greater powers than functional managers); Balance Matrix: in this matrix, functional managers and project managers have the equal powers.

The advantages of this organizational structure: First, it is the same as functional structure that resources can be shared in multiple projects, which can significantly reduces the problem of redundant staff; Second, project is the focus of work, with a formal designated project manager will make him give more attention to the project, and responsible for the coordination and integration work between different units; Third, when there are multiple projects simultaneously, the company can balance the resources to ensure that all the projects can progress to complete their respective costs and quality requirements; Fourth, the anxiety of project members is reduced greatly after the end of the project, while they are strongly associated with the project, on the other hand, they have a “home” feeling about their functions.

The disadvantage is that this organizational structure: First, the matrix structure has exacerbated the tensions between functional manager and project manager; Second, under any circumstances, sharing equipment, resources and personnel among different projects will lead to conflict and competition for scarce resources; Third, in the process of project implementation, the project manager must negotiate and consult with the department managers on various issues, which leads to the delay in decision making; Fourth, matrix management is not according to the principles of unified management, project members have two bosses, the project manager and functional managers, when their commands are divided, it will make members at a loss.

Three different forms of the matrix organizational structure does not necessarily have the advantages and disadvantages described above: Project Matrix can increase the project’s integration, reduce internal power struggle, its weakness is poor control of their functional areas and prone to “project inflammation”; Functional Matrix can provide a better system for managing the conflict between different projects, but maintaining the control of functions is at the cost of inefficient integration of projects; Balanced Matrix can achieve the balance between technology and project requirements better, but its establishment and management is very subtle, is likely to encounter many problems related to matrix organization.

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