Since each team works in silos, management is expected to guide all departments into one unit. It is also known as grid organization or project or product management organization. As a result, some argue that the modularity of a firm should be limited to the extent the flexibility it affords results in gains. Product Divisional Structure In a divisional structure, the teams are organized in set of divisions, where each division corresponds to the end product or services provided by the organization. Arbitrary and one-sided decisions by either the project or functional manager can only lead to or intensify the potential for conflict. Types of Organizational Structure There are four general types of organizational structure that are widely used by businesses all around the world: 1.
For example, let us say you are a mechanical engineer working in a functional department. A matrix organization is defined as one in which there is dual or multiple managerial accountability and responsibility. Elements of a Bureaucratic Structure There are two elements of a bureaucratic organizational structure that are deemed to be the most important. These divisions can correspond to either products or geographies. Cons: However, there are apparent disadvantages to this conventional structure. A common occurrence would be the transfer of a person who had demonstrated the ability to work across functional departmental lines to the project office as an assistant project manager. An organizational structure wherein the organizational functions are classified into divisions as per product or service lines , market, is called Divisional Structure.
Some naysayers of functional organizational design say a big problem is incoherence. In the multidivisional structure, subsidiaries benefit from the use of the brand and capital of the parent company. If the organization does have multiple product lines, then the functional hierarchy at lowest level does get divided along product lines, thereby creating deeper hierarchies. Cost Economical, as the functions are not repeated. To illustrate the organizational principles, a matrix will be considered first in which there is a balance of power between the project and functional managers.
They indicate that many of these difficulties occur in more conventional organizations, but that the matrix seems somewhat more vulnerable to these particular ailments. The need was for an organizational form capable of managing the recent very large and very complex programs, projects, and problems, and for managing limited resources. Divisional Strategies Each division within this structure can correspond to either products or geographies of the organization. Hence managerial development is easier. A weak matrix organization structure resembles the characteristics of a functional organization structure. Launching new products is a project for the company.
Anarchy is defined as a company quite literally coming apart at the seams during a period of stress. For instance, accountants will focus on doing accounting work rather than on sales. Growth of the Matrix As problems and projects have become more complex, the inadequacy of the hierarchical organizational structure became apparent. In contrast, decentralized companies simplify. Thus, it requires more outlay on labor and overhead.
Implicit in the definition of the matrix organization is the recognition that the project is temporary whereas the functional departments are more permanent. Since these authorities flow downward and sideways, this structure is called the matrix organization structure. Matrix is said to be the more suitable structure for large organizations. In the quest to become a more competent professional, Edward studied for and passed the , , and. However, the matrix is a complex organizational form and will not automatically work. This type of organizational structure leads to dual responsibility where the employees are answerable to both the functional manager and project manager, creating a higher manager-to-worker ratio.
Program Management: The functional design is divided into smaller projects; each project produces a deliverable that is integrated into the final product. Functional Structure Under this structure, employees are grouped into the same departments based on similarity in their skill sets, tasks, and accountabilities. If the organization has properly crafted performance management that promotes the visibility of individual skills, functional structure makes it easier to coach other and climb the hierarchical ladder. Teams are created by grouping employees in a way that generates a variety of expertise and addresses a specific operational component of an organization. Each of the three division is in charge of a different set of tasks: environmental responsibilities, nuclear-energy responsibilities, or research responsibilities. Effective Command No unity of Command 4.
Managing the transition of the team when you becomes even more important. No specific organizational form can be guaranteed to work at all times, or to improve productive output. As companies grow, it becomes difficult to stay with this arrangement. If done correctly, flatarchies can increase employee morale. A strong project manager may place undue emphasis on time and cost constraints, while a functional manager may concentrate on technical excellence at the expense of schedules. Functional Structure The two structures that a small business typically uses to create the matrix are the functional and divisional structures. Layering is defined as a phenomena in which matrices within matrices are found.
In a matrix there are usually two chains of command, one along functional lines and the other along project, product, or client lines. Several more organizational structures are proposed by business theorists, but there may be only relatively nonessential differences in between them, based largely on the degree to which they retain the classic hierarchical structure verus the degree to which they incorporate elements of the newer associative structure. Edward shares his certification experience and resources here in the hope of helping others who are pursuing these certification exams to achieve exam success. Type of Matrix Organization Structure The matrix organization structure can be classified into three categories, mainly depending on the level of power of the project manager. Also, communication from employees to managers is less likely to be distorted since there are not as many layers that messaging has to travel through.