Every resource belongs to a function and he has a functional manager. Organizational functions within an organization are Sales and Marketing, production, human resources, finance, Research & development, and Purchasing etc. Please respond to the discussion questions below – references must be provided Wk 4: Organizational Culture – Learning Activity 2A – $3.00 Created by Dvir Samet on Sep 15, 2016 The concept of a vision is so a company as a whole, leadership, management, employees, as well as the general public and customers understand the way for the future of the company, and the mission is … It can easily be seen which department is successful in making profits while which are bearing losses. Within a hierarchical organizational structure, clear lines of communication are established for everyone. The following are some top benefits to use the organizational chart: The organizational chart helps build and design the organization structure to meet the business' objectives. Advantages of Organizational Charts. Unifie… Below are some merits and advantages of line organization or vertical organization 1. It can cause managers to become territorial. 6. Master of Project Academy delivered online courses to more than 50,000 participants in more than 170 countries around the world. Because there are several disciplines and there will be several resources from these several functional departments in a project. They also create uncertainty within the workplace, as workers may not know who needs to receive information about the work they’ve done. Change is hard. Because resources are grouped based on their specialties. Organizational Structures | What are the Advantages and the Disadvantages of Different Organizational Structures? In this article, we are going to review the advantages and disadvantages of each organizational structure: Functional, Projectized, and Matrix. Therefore, it is more complex. It’s a must for avoiding any misunderstandings between the departments. Importance or Significance of a Sound Organizational Structure! Teams and individuals can be very responsive. The runarounds occur when we do not know who is responsible for what and we are not sent to the right people in the first instance for getting some work done. An advantage of a divisional structure is that each division can operate as a separate, self-sufficient unit without having to rely heavily on the parent company or … It’s not possible to name one organizational structure as the best for every kind of companies or projects. Do you want to earn money just by sharing this article? Simplicity. Your company can present a unified front to customers, vendors and investors when a common marketing message is used ... Promote Upward Mobility. Report a Violation, 3 Steps that should be taken to Build the Structure of an Organization. 5. Structure of Organization; Advantages of Functional Organizational Structure. The Advantages of an Organizational Structure. M2: Analyse the advantages and disadvantages of the interrelationships between organizational functions and its impact that can have upon organizational structure. It results in traceability of outcomes and the work interdependency of that particular task is reduced to a minimum. Do you want to earn money just by sharing this article? Which organizational structure works the best for the company’s overall sustainability. Since a good organizational structure requires that the duties be clearly defined and assigned, such duplication of work is eliminated. For example, the person heading the IT department will have the education and skill necessary to shoulder this … This method of assigning position and relative levels of power provides advantages and yields disadvantages. It helps managers manage the human resources issues. Matrix organizations need extensive policies and procedures. Let’s consider that project assignments of a software engineer takes 4 out of 5 days of his work week, so he is 80% utilized. A number of factors, including the rapid evolution of business models and the inevitability of change within organizations, demand that business leaders master the ins and outs of organizational change. When it comes to discussing the advantages of horizontal organizational structure, the benefits are typically limited to smaller, less complex organizations. Fundamentally, organization charts benefit users for its visual communication of information, which is more effective than pure text. Which organizational structure gives the most authority to the project managers? "description":"Master of Project Academy offers online & self-paced certification courses", There is easy accountability for each employee and thus employees get their reward through a fair and just practice. Functional managers may have different priorities than project managers and this causes higher potential for conflict. This method of assigning position and relative levels of power provides advantages and yields disadvantages. Project teams work in the same location, even in the same room in projectized organizations. Governments, militaries and many corporations employ this type of organizational structure. This means the power and the responsibilities of each department. Instead of the C-Suite needing their middle managers to collect information assets from the front-line staff and then reporting it to them, they can obtain the information directly. If these requirements are clearly established and the yearly increments or the cost of living increments for each type of job are properly and clearly understood, then compensation administration policies are easier to implement. Even if he has enough time to do additional work, he is fully dedicated to the project and this unutilized time of the resource cannot be used. 4. This increases the effective and efficient communication among the project team. This dedication automatically increases the focus and motivation of team members for the success of the project. In Matrix organizations, the team members report to their project manager and also to their functional managers. 2. The last advantage of this type of organizational structure is that team members maintain a home. A line organisation has only direct, vertical relationships between different levels in the firm. 3. Because team members of the project are reporting to the project manager as well and this gives respective authority to the project manager. Organizational structure is extremely important during a business. For instance, if a software architect needs to support a project for only 2 days, he can be assigned to other projects or activities for the remaining days of the week. In functional organizations, Project manager’s role, resource availability, control of the project manager on the project are lowest. It also helps employees understand what are their positions, who … It facilitates promotions of personnel: Since the organizational chart clearly pinpoints the positions … In Functional Organization, people are grouped by areas of specialization. 3. And this affects the success of projects respectively. Since the goals are clearly established and resources clearly identified, both short term as well as strategic planning becomes more focused and realistic and such planning contains the provision to permit changes to be made in the right direction including expansion and contraction of facilities, operations and activities when it becomes necessary. It is the simplest form of organization and very simple to understand and implement. Lets get started by exploring the benefits of organizational charts. Some of the beneficial outcomes of optimally designed organizational structures are: While there are many different structures that organizations can adopt, depending upon the type of organization including whether it is a service organization or a manufacturing organization, a well structured organization has many benefits. Advantages of A Hierarchical Organizational Structure 1. The first advantage of functional organization is that it makes the management of specialists easier. Let's take a look at the advantages and disadvantages of each so you know what you're up against when you join a new structure. 1. Project organization, based on team concept, is the best means of getting the right things done right. Organizational Structures | What are the Advantages and the Disadvantages of Different Organizational Structures? Briefly, Project manager’s role, resource availability, control of the project manager on the project are highest in projectized organizations, while the functional manager’s is the lowest. Organizational structure is extremely important during a business. Please respond to the discussion questions below – references must be provided Wk 4: Organizational Culture – Learning Activity 2A – $3.00 Created by Dvir Samet on Sep 15, 2016 The concept of a vision is so a company as a whole, leadership, management, employees, as well as the general public and customers understand the way for the future of the company, and the mission is … These kinds of conflicts may arise in matrix organizations. Disclaimer 9. If the same tool will be needed for a second project in the organization, a new tool needs to be aligned for the new project team since the existing tool solely belongs to the first project team. Advantages of Functional Organizational Structure The employees are made into groups according to their skills, and thus the overall effectiveness and efficiency of the tasks increase. 1. A sound organisational structure facilitates the optimum use of technological improvements such as automatic techniques of production, control devices, computer system etc. The last disadvantage of the functional organization is that the project manager has little or no authority. Another disadvantage of the projectized organizations is the duplication of facilities and job functions. Image Courtesy : images.flatworldknowledge.com/carpenter/carpenter-fig07_001.jpg. Matrix organization enables maximum utilization of scarce resources. The Matrix Organization Structure can deliver this, provided people have the skills to make the matrix work. Instead of the C-Suite needing their middle managers to collect information assets from the front-line staff and then reporting it to them, they can obtain the information directly. Image Guidelines 5. It creates a defined structure for communication. It may cause a lack of collaboration. There are three different organizational structures, Functional Organization, Projectized Organization and Matrix Organization. 1. The advantages and disadvantages of a matrix organizational structure make it easier to move resources to the most important projects which need to be completed. It also helps employees understand what are their positions, who … List of Advantages of a Flat Organizational Structure 1. As you see in this table, the authority of the Project managers, resource availability, who manages the project budget, project managers role and how project management administrative staff works are compared and listed for the different organizational structures. The first disadvantage of this organizational structure type, is that people place more emphasis on their functional specialty to the detriment of the project. You can work on lots of different things, sometimes in parallel—although this point can be argued as a disadvantage as well. The executive or the team leader has the knowledge and experience of that particular field. Companies like a steady rudder, sailing smoothly into uncomplicated futures, but it often doesn't go that way. Since the organizational chart clearly pinpoints the positions of individuals relative to one another, it is easier to know as to which level a person has reached at any given time in the organizational hierarchy. All courses are 100% Online, Self-Paced and 30 Day Money Back Guaranteed. What Are the Advantages & Disadvantages of Hierarchical Structure? This causes the organization to lose its professionalism in disciplines. Last advantage is that a more effective communication is ensured in projectized organizations compared to other organizational structures. All the employees know exactly what position they are in and also know what job they have to do. Change can be brought on by a variety of things, including crisis, performance gaps, process improvements, new technology, new opportunities, mergers, acquisitions and more. This is a type of organizational structure which facilitates a horizontal flow of skills and informations. Furthermore since each job is well described in terms of qualifications and duties, the promotional stages can be more clearly established. Let’s consider a software engineer worked in a project. { Duplication exists when work distribution is not clearly identified and the work is performed in a haphazard and disorganized way. 4. There is not a career path in project management. Because a functional structure groups people performing similar tasks that require certain skills, more experienced or talented group members serve as examples and mentors to individuals with less experience. List of the Advantages of a Hierarchical Organizational Structure 1. It helps managers manage the human resources issues. For instance, for a software developer working in software development department, developer, senior developer, expert developer, and architect can be a career path as long as he improves his skills and competence. Production of Workload. Members of the project team are more loyal in projectized organizations. Unify Your Marketing Message. Learn How. It has a built-in system of “checks and balances” so that the progress towards the attainment of objectives is evaluated along the way so that any required adjustments can be made and any new decisions required can be taken. This structure strengthens the dissemination of information and better coordination of the staff. Naturally, this will also bring the need of additional administration. Matrix organizations enable better coordination, better horizontal and vertical dissemination of information. They enable a more sustainable and healthier corporate environment. 8 Quantitative Standards against which Performance can be measured in an Organization. Content Guidelines 2. Because there will be two managers of a resource: functional manager and project manager. When disruptions crash toward them, companies should know there are benefits of organizational change. For instance, how to request a resource for a project, how to prioritize projects if they need the same resource, how to release a project team member, they all need to be documented clearly. The advantage of this horizontal organizational structure is that it allows decisions to be made faster. Did you take a look at our Certification Courses? If you want to learn more about these three types of organizational structures a detailed article can be found here. Let’s consider that a department has its own works and a project manager is requiring a new resource from this department. Because staff mainly reports to the functional manager and therefore,the project manager does not have that much power and influence on the project team. Since there will be lots of functional departments and resources, these need to be supported with the policies and procedures in order to avoid conflicts. This causes project management to be underestimated by the staff. Team members report to only one supervisor. If there will be lots of projects to initiate, this will cause resource allocation problems respectively. Diverse interestsare consolidated to the above problems. Projectized organizations use resources less efficiently. So even if they are released from projects, they turn back to their department and start doing departmental work. This causes lack of professionalism in disciplines. The last advantage of Functional organizations is that they define clear career paths for the staff. Master of Project Academy course portfolio includes but not limited to: To learn more, visit our course portfolio. Allows managers to tackle as to how employee treatment occurs in the organization. A number of factors, including the rapid evolution of business models and the inevitability of change within organizations, demand that business leaders master the ins and outs of organizational change. Advantages of Project Organization. Which type of organizational structure has more focus on the projects? In an hierarchical structure, members know to whom they report and who reports to them. Because resources specialized in one area, report to the same manager who knows the domain or area as well. It Promotes Faster Decision Making Another advantage about a flat organiza… Organizational Structure Type #1: Functional Organization. Responsibility is fixed.In this form of organization responsibilities are fixed and defined. Project organization, based on team concept, is the best means of getting the right things done right. Advantage – Clear Chain of Command In an hierarchical structure, members know to whom they report and who reports to them. The following are some top benefits to use the organizational chart: The organizational chart helps build and design the organization structure to meet the business' objectives. Since project resources are dedicated to a project, even if this resource is not 100% utilized, they cannot be allocated to another task. 3. Management issues may arise because it is more bureaucratic and the functional organization are not accountable to each other and the poor horizontal coordination within the department may occur. Collaboration between different departments. A fair and equitable wage and salary schedule is based upon the premise that the jobs with similar requirements should have similar benefits. The divisional organizational structure allows each division of a firm to be accounted for in isolation. In a turbulent environment, such organization is preferable for planning, implementing and control of costs projects. For instance, for the software projects of a company, software engineer resources will be requested from the software development department. There is pointed supervision in … This reduces the conflicts or contradictions of reporting to both project and functional manager. Because all of these three organizational structures has advantages and disadvantages. TOS 7. Matrix organizations keep the power and influence of functional and project managers in balance. In case of a lack of technical knowledge, the resources can consult to their senior colleagues or managers within the same functional domain. 2. In this type of organization shifting of responsibility is not possible because responsibilities are fixed. What needs to be achieved to complete a project successfully is clearly defined and understandable for the project team. Project Management Professional Certification Training, Certified Ethical Hacker Certification Training. Because their ultimate manager is their functional manager. "name":"Certification Courses", Content Filtrations 6. 1.4.4 Networked Organizational Structure Following are the advantages of Networked Organizational Structure: Rigid hierarchies are replaced by formal and informal communication networks that connect all parts of the company. Advantage – Clear Chain of Command. 2. Every person is crystal clear to whom he is answerable and who are accountable to him. One of the advantages of a functional structure is the positive atmosphere it provides for skill development. This ensures the sustainability of the organization because the knowledge and know-how remain in the department even after the projects are completed. Creativity is developedthrough interaction with various specialists. "@context":"http:\/\/schema.org\/", It can be easily define and explain to all staff. There Is Proper Authority and Control Over Employees In a hierarchical structure, functional … It is an effective way of producing highly complex product systems. The success of the project directly depends on the team members and this increases the loyalty to the project. Plagiarism Prevention 4. In other words, an organizational structure is a framework that helps your employees achieve their goals and do their jobs in the most efficient and productive way. The organizational structure, as the name suggests, affetcts the whole organization’s structure. 1. A company can change its organizational structure according to the internal or the external conditions or requirements. It leads to the development of strong team-workand teams with identity fully with … So, a structure is developed to give the shape to a tentative idea at the initial stage. Change can be brought on by a variety of things, including crisis, performance gaps, process improvements, new technology, new opportunities, mergers, acquisitions and more. Salary-related expenses are reduced, enabling the company to save money as well as provide better pay for its workers.2. Let’s consider that a project needs a testing tool to complete its quality assurance activities in a project.