Project Management(A6AX 34)

Ourcome1: Organisatioal Structures

Developed from SQA COLEG pack by Alison Gavin

Forth Valley college 2015

Changes to organisational structuresAs we now realise, there are many types of organisations – they include businesses, hospitals, schools, local authorities, multinationals, charities and franchises. Some are in the private sector and some are in the public sector. All of them have a purpose and a policy.

The people who manage them may develop different structures which, to some extent, represent divergences between the goals and policies of the enterprises concerned.

In a global marketplace things change rapidly, as too must the organisations that compete in it.

In designing an organisational structure, either initially or through enforced change, the starting point should be the five central questions identified by Child (1984).• Should jobs be broken down into narrow areas of

work and responsibility so as to secure the benefits of specialisation?

• Should the overall structure of an organisation be ‘tall’ rather than ‘flat’ in terms of the levels of management and spans of control?

• Should jobs and departments be grouped together in a ‘functional’ way according to the specialist expertise and interests that they share?

• Is it appropriate to aim for an intensive form of integration between the different segments of an organisation, or not?

• What approach should management take towards maintaining adequate control over the work done?

Hierarchical or flat?Hierarchy refers to the number of levels to be found in the organisation. The army, police and civil services have many levels – they are said to operate ‘tall’ structures. Many large organisations have similar structures,

It has been claimed that hierarchical structures can lead to ineffectiveness as there are too many tiers of management.

‘Flat’ organisations have very few levels between the lowest and highest levels. In Figure 2.4 only one level of hierarchy operates between the managing director at the top and the employees at the operational level.

The important difference between tall and flat organisations is the span of control – the number of subordinates who report to a single manager.

Functional structureThis type of organisation structure exists when a specialist is to give a service which the line manager must accept. The specialist’s authority will come from a common superior, for example from a European manager to a UK manager. If the manager requires some functional assistance to be given to his subordinates – training for example – then the manager would have to delegate some authority to the functional specialist

The functional structure model is very popular and can be varied in a number of ways:

• Division by product – the organisation is divided up according to the product. For example in supermarkets it may be fruit and vegetables, toiletries, bakery, etc. In a local authority the organisation may be divided into recycling, housing, environmental health, etc.

• Division by customer – this could include a sales business which is divided into wholesale and retail sections to cater for the particular needs of each sector.

• Division by process or equipment – a printing firm, for example, may use this sort of division in order to keep all its printing functions in the one area; for example a screen printing department for T-shirts and a printing card department for business cards.

A popular way of representing functional lines is illustrated below

Geographical structureAs a firm grows, it sometimes needs to set up branches in other locations

Matrix structureSometimes an organisation needs to run according to what projects they have to accomplish. In these situations people usually work together in a team to achieve their own project goals.

Matrix Structure

A person working in a project would have two bosses

A project may cover some or all of the organisation’s department areas.

Obviously these are very different commissions so the organisation would have to set itself up to complete both projects.

It could set up two project groups, both of which would utilise resources from all of the different departments within the organisation.

The End