Structure is the motivation behind why we allude to organizations as “associations.” Did you take a look at our Certification Courses? An organizational structure that works perfectly for all the business-as-usual work doesn’t always work for projects, and you have to manage within the environment in which you work. It leads to the development of strong team-workand teams with identity fully with … First and the most important advantage of this organizational structure type is the efficient project organization. Strong product/project co-ordination. Project objectives are highly visible in matrix organizations. Some advantages for bureaucratic structures for top-level managers are they have a tremendous control over organizational structure decisions. Regardless of the type of organizational structure you choose, there will always be a reporting channel that ends with a final decision maker. In a top-down structure, decision-making occurs at the senior management level and is then clearly communicated to the rank-and-file to implement. Master of Project Academy They enable a more sustainable and healthier corporate environment. The main reason of this is, there will be lots of projects needing resources from a single functional department. This dedication automatically increases the focus and motivation of team members for the success of the project. This is mainly applied in large projects or product development processes, and hiring employees from different disciplines.. 4. Every person is crystal clear to whom he is answerable and who are accountable to him. It can be easily define and explain to all staff. There is more support from functional areas. This will require management and coordination of different functional managers. This helps to prevent duplication of work. This causes lack of professionalism in disciplines. Also to know is, what are the advantages of organizational structure? Let’s consider a software engineer worked in a project. For instance, software developers belong to the IT department or sales specialists belong to the sales department. One benefit of the matrix structure is that it allows cross-collaboration between staff and departments that may not always have opportunities to work together. The functional manager wouldn’t want to assign a resource to the project since he wants to complete the departmental work first. Matrix organization enables maximum utilization of scarce resources. Which type of organizational structure has more focus on the projects? "@context":"http:\/\/schema.org\/", This structure makes it easier to share resources in different divisions. This increases the performance of the team. Last advantage is that a more effective communication is ensured in projectized organizations compared to other organizational structures. { If you’ve had a job, you likely worked in a functional organizational structure.The functional structure is based on an organization being divided up into smaller groups with specific tasks or roles. Project teams work in the same location, even in the same room in projectized organizations. 9. Advantages of Divisional Structure Accountability. Improved environmental monitoring. The advantage of this horizontal organizational structure is that it allows decisions to be made faster. Because their ultimate manager is their functional manager. 6. Do you want to earn money just by sharing this article? Members of the project team are more loyal in projectized organizations. The project manager has control over resources. Although they are assigned to a project, they take the directions of their functional managers more seriously compared to a project manager’s direction. The organizational structure, as the name suggests, affetcts the whole organization’s structure. 4. The success of the project directly depends on the team members and this increases the loyalty to the project. The last disadvantage of the functional organization is that the project manager has little or no authority. In this article, we are going to review the advantages and disadvantages of each organizational structure: Functional, Projectized, and Matrix. By organizing employees according to business functions, departments can reduce the chance for multiple departments to complete similar work. This means that there are less wages, fringe benefits, and so on, to pay for management. The first advantage of functional organization is that it makes the management of specialists easier. Advantages of Functional Organizational Structure The executive or the team leader has the knowledge and experience of that particular field. Advantages And Disadvantages Of Organizational Structure 1447 Words | 6 Pages. A strong organizational structure is better able to prepare qualified employees for management. Project organization, based on team concept, is the best means of getting the right things done right. Tougher problems with resource allocation is another disadvantage of the Matrix organizations. Advantages of Organizational Charts. Or when a new project is initiated, they can be re-assigned to new projects. The old adage “failing to plan is planning to fail” is most applicable to the organizational structure you implement at your business. Advantages & Disadvantages. 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 functional organizational structure helps in achieving the benefits of specialization of work. 4. Do you want to earn money just by sharing this article? Project Management Professional Certification Training, Certified Ethical Hacker Certification Training. Salary-related expenses are reduced, enabling the company to save money as well as provide better pay for its workers.2. It is the simplest form of organization and very simple to understand and implement. One advantage of this sort of flatter hierarchy is that it is easier for employees to communicate with each other and it facilitates learning. Let’s consider that a project needs a testing tool to complete its quality assurance activities in a project. Below are some merits and advantages of line organization or vertical organization 1. This dedication automatically increases the focus and motivation of team members for the success of … 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. This ensures the sustainability of the organization because the knowledge and know-how remain in the department even after the projects are completed. "@type":"Product", This structure creates a system by which you can delegate decisions, identify roles and responsibilities and define the chain-of-command. Flexible use of resources. They also create uncertainty within the workplace, as workers may not know who needs to receive information about the work they’ve done. 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. Outlining the Company Structure: Providing a basic structure of the division of work and responsibilities. Because team members of the project are reporting to the project manager as well and this gives respective authority to the project manager. Advantages of Formal Organization. Disadvantages are that as the company grows, there may be a lack of … 6. The divisional organizational structure allows each division of a firm to be accounted for in isolation. With this operational framework in mind, your workers are empowered to meet and exceed performance standards that can help them climb the upward ladder in their career trajectory. Without structure, there’s next to no clearness and center; no one knows whom to answer to and duties are passed around like a hot potato. Benefits in a Flat Organizational Structure, Techniques for Implementing Change in an Organization, Baylor University: What Are the Benefits of Organizational Structure, Point Park University Online: 4 Types of Organizational Structures, The Impact of Organization Structure on Productivity. What Are the Functions of an Organizational Structure? Following are the important advantages of functional organizational structure: 1. A unified marketing message can help the entire company better understand its marketing goals, and then work together to achieve them. When the company operates under a strong structure, a comprehensive management training plan is easier to create and execute to help maintain a strong managerial core. High administration cost. When organizational structure regulates the flow of information, then changes in information are easier to monitor and update in a company-wide training program. This analysis is not possible when a firm is … Team members report to only one supervisor. Advantages of Functional Organizational Structure. And improving skills, knowledge, and competence in that specialization can be proposed as a career path for the resource. 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. A sound company structure can benefit your organization in several ways, including making it easier to delegate responsibility and affecting change throughout the workplace. When multiple departments are involved in a single endeavor, a unified marketing message can be essential to project success. Master of Project Academy course portfolio includes but not limited to: To learn more, visit our course portfolio. 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. This structure strengthens the dissemination of information and better coordination of the staff. This is the result of the flow of communication that an organizational structure offers, as well as the establishment of responsibility and respect for the company hierarchy that comes from strong structure. 1. It’s a must for avoiding any misunderstandings between the departments. Functional managers may have different priorities than project managers and this causes higher potential for conflict. Unifie… This increases the effective and efficient communication among the project team. Another disadvantage of the projectized organizations is the duplication of facilities and job functions. It helps the company to use resources wisely in the pursuit of company goals as opposed to doubling efforts or experimenting with options perhaps not in the company's best interests. When the company operates under a strong structure, a comprehensive management training plan is easier to create and execute to help maintain a strong managerial core. This works best for managers who have a command and control style of managing. In Functional Organization, people are grouped by areas of specialization. Naturally, this will also bring the need of additional administration. Similar resources are centralized in groups. Let’s consider that a department has its own works and a project manager is requiring a new resource from this department. For instance, for the software projects of a company, software engineer resources will be requested from the software development department. If he is assigned to a project, he reports to a project manager as well. 3. Also, there will be several resources from different functional disciplines in a project. Responsibility is fixed.In this form of organization responsibilities are fixed and defined. List of the Advantages of a Hierarchical Organizational Structure 1. To benefit from a strong framework, it is important to understand the advantages of organizational structure. © Because there are several disciplines and there will be several resources from these several functional departments in a project. In a turbulent environment, such organization is preferable for planning, implementing and control of costs projects. If there will be lots of projects to initiate, this will cause resource allocation problems respectively. 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. Which organizational structure gives the most authority to the project managers? Efficient use of support systems. So even if they are released from projects, they turn back to their department and start doing departmental work. When a defined hierarchy is in place, your company is better equipped to make important decisions and adjust practices to meet the demands of competition. One of the advantages of a functional structure is the positive atmosphere it provides for skill development. For example, in a flat structure in which employees are given wide latitude to make suggestions and take ownership of their work process, decisions are made based on the consensus of employees working in a team. It helps managers manage the human resources issues. Divisional structure offers many advantages over functioned structure especially in terms of autonomy for efficient management, management development, increasing organizational size up to any limit, and taking into account of specific problems related with each product or territory contributing to the overall objectives of the firm. Departments can work together on a developmental plan to help encourage the training of managerial candidates within any department. The most important disadvantage of this organizational structure type there is no “home” for the project resources once the project is finished. Matrix organizations keep the power and influence of functional and project managers in balance. It Promotes Faster Decision Making Another advantage about a flat organiza… Learn How. The following are some advantages of the functional organization structure: 1. It is an effective way of producing highly complex product systems. 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 … Projectized organization, people are grouped by areas of specialization flow of information, then in. Three organizational structures complete its quality assurance activities in a single endeavor, a unified front customers. Difference between Tall & Flat organizational structure makes employee training easier to administer departments can reduce chance. Structure helps in achieving the benefits of specialization a developmental plan to help the... 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