BUSINESS FORMS & ORGANIZATIONAL STRUCTURES FOR PROJECTS II

After incorporating a company, the next question is what structure? The word structure is a common word. All it means is: framework, collection, arrangement or configuration.

Here it would be used in the context of hierarchy in an organization, a cascade of one to many relationships. It shows how tasks are formally divided, grouped and coordinated. It is an organization chart that shows who reports to whom. At its heart are two things: roles and accountability.

Basically, there are two structures: Process and Product. A combination of both is called Matrix. The latest development is network which is a sort of a joint-venture but linked with internet which itself is a network of networks.

PROCESS STRUCTURE

Also called Functional Structure, it is most common model used in the business world. First, decide what is to be done. Second, break it into functions. Third, raise departments based on the functions. Obviously, a manufacturing company would have purchase, production and sales functions. So there would be functional heads. Lo and hold, a structure has been designed!!!

One might asked that there are other auxiliary functions like accounts, administration and R&D. Of course, there are but these are support functions and categorized as “Staff Departments”. This is opposed to “Line Departments” which contribute directly toward objectives of an organization.

Process structure is based on a mechanistic model. It has (i) high specialization, (ii) rigid departmentalization, (iii) clear chain of command, (iv) narrow span of control, (v) centralization and high formalization.

PROCESS STRUCTURE

PRODUCT STRUCTURE

Most firms starts with a functional structure. As these get large, they may become unmanageable, slow and inflexible. The only salvation is in redistributing the functions on the basis of products or units. Same is true of Regions (North & South) or even clients as in hospitals (eye-ward, cardiology, orthopedics etc.) The purpose is give “one-window effect” for an individual user.

As would be observed from the sketch, there are three autonomous units each looking for its own product. Each is independent as it has its own people to look after purchase, production and sales. Unlike Functional Structure, there are no water-tight compartments and people work as a team. The management tries to make them multi-functional so that they freely move from one function to another.

Product Structure follows an organic model. It develops (i) multi-functional and multi-disciplinary jobs, (ii) cross functional teams, (iii) lateral communication, (iv) free flow of information,(v) wide span of control, (vi) decentralization and (vii) low formalization.

PRODUCT STRUCTURE

MATRIX STRUCTURE

This is a blend of process and product. Described in another way, it is a product structure super-imposed over process structure. It is two-dimensional, top line represent functions headed by functional managers or Line Managers; the side-line represents Product Divisions headed by Project Managers.

Think of a large hardware store which has purchase, store and repair sections each supervised by a manager. There would a number of plumbers, electricians, masons and carpenters sitting before the shop. The owner receives a call say for replacement of a bathtub and calls a plumber to do the job. The plumber in turn can demand the requisite product, necessary fitting and helpers. The plumber would finish the job and submit all details and would remain accountable for anything wrong.

A matrix works in the same way. The planning department works out a budget for making 100,000 writing pads, calls it a project and passes it on to a project manager. The manager in turn would approach functional manager for procurement of paper, staples, ink, machine-time and work-force within the budget and would carry out the job. Once done, all workers would go back and would wait for next assignment.  

MATRIX STRUCTURE

A GLOBAL NETWORK ORGANIZATION

NETWORK

A joint venture of companies for sharing skill or core competencies to manufacture a product or provide a service. The companies rely on relationships between people across structural, temporal and geographic boundaries.

It is more than outsourcing and has flexibility as in a network structure there is a continuous change in partners and the arrangements are goal oriented and loose. All efforts are made to bring about new products and services. The process changes more quickly for innovative products.

Garden.com can be reached on-line. It is a good source for obtaining garden supplies like flowers, bushes, patio furniture, décor, fountains, statues, lighting, tractors, arbors and sheds. Any garden professional or even a home gardener can contact their online garden center. It has an advisory role as well informing you of what organic plants would suit your country and even your area. After you have made the selection, you would be prompted to pay through credit card. Within weeks a courier would deliver at your door-step which you have ordered for. Though virtual, the company can be approached anytime for dispute settlement or even refund.

NET WORK STRUCTURE

FOUR BASIC STRUCTURES

ORGANIZING PROJECT WITHIN VARIOUS STRUCTURES.

Having written about types of structures, we now would move to suitability of a structure for a specific project. Each and every structure would be evaluated from the point of view of its capability to handle a project.

FUNCTIONAL

The project would be broken into various segments and pass on to functional heads for completing their parts. Since there would be no change in the existing setup, it would be inexpensive. But coordination would be the main problem as nobody would be exclusively responsible.

PRODUCT

In product structure, all units work independently. So another unit can be created to take care of the project. It would be simple and fast and would bring together specialist from different areas. But, at the same time, it would be expensive. It may also result in internal strife as employees would be working as a team in the absence of any command & control.

HOW TO DEFINE A MATRIX STRUCTURE

MATRIX

Matrix is a mix of functional and product structure. There are two chains of command, one along functional lines and the other along project lines. In this case, the project staff would report simultaneously to functional and project managers. While this would be efficient, flexible and with a strong focus on project, there are many drawbacks. There may be dysfunctional conflicts, infighting, stress and slow progress.

NETWORK

A network is a temporarily alliance for a specific job. While it would reduce cost, bring high level of expertise and flexibility, it may result into conflicts and coordination breakdowns.

ROLE OF CULTURE

While selecting a suitable structure, role of culture cannot be ignored. A project may be successful under functional structure as everyone gives a helping hand. At the same time, it may flop when carried out under free domain of product structure as culture was not conducive.

WHAT IS CULTURE?

Culture refers to beliefs, values and behaviors. If one has to assess a corporate culture, one can start with a check list containing factors like professional growth, turnover rate, dress, cleanliness and upkeep in the plant or office, late sitting and reputation of the Heads of Departments.

Packages Ltd is a model company in Pakistan from cultural point of view. Every employee has equal opportunity for development and growth, recruitments are on merit and so are promotions. Working environments are relaxed, no name tags, open door policies and leadership practicing MBWA, “Management By Walking Around”.

There are other examples where late sitting is the norm. Benefits like a company maintained car or annual bonus would go to those who are ‘blue eyed’ or hover around the boss or have strong political backing.

CULTURE & ORGANIZATION

CULTURE & STRUCTURE

In certain organization, culture encourages the implementation of the projects. In some other situations internal competition is stressed and everyone works for own benefit overlooking the project. The prevailing norms, customs and attitude play a vital role in project progress. So in good culture, any structure would be suitable for project execution. 

FINAL WORDS

There is no such thing as an ideal organizational structure. Each has advantages and dis-advantages. Management should match the structure with the objectives by (i) picking up a process structure and (ii) modifying as needed. Usually for mass production, process structure has proved suitable. But if the products have short life or are customized, product structure would suit the organization.  

TRAINING FOR MULTI-FUNCTIONAL ASSISTANT

The new trends favor flat structure with leaner staff.  By employing a multi-skill and muti-functional work force, an organization can do wonder with small number of employees.  Option of outsourcing is always there if in a particular period, the existing staff cannot cope with the rush of work.  

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Comments 31 comments

Emran Ali profile image

Emran Ali 7 years ago from karachi

Dear Hafeez

Your Hubs have been effective in terms of providing knowledge about some important topics of Project management . I have learned and reviewed each hub page of yours and it has certainly given me better understanding . Learning never stop so as i never stop learning . I would be waiting for further topics for increasing my knowledge.

Best Regards


hafeezrm profile image

hafeezrm 7 years ago from Pakistan Author

This would be very wise for you.


yasirtufail 7 years ago

Wonderful explanation & sumarization of previously studied topics & yes we need such kind of information from your side in the future as well because there are lots of areas where we should have excel to as we are about to enter into the market. I never heard about "Staff Departments" & "Line Departments" so thank you for increasing our knowledge & we expect same in the future from your side.


hafeezrm profile image

hafeezrm 7 years ago from Pakistan Author

Thanks for your comments.


Fahad_Khan profile image

Fahad_Khan 7 years ago from Karachi

Thanks a lot Mr. Hafeez. You've been a true mentor for all of us. I'll always be thankful to you for helping me and others in every possible manner. Please upload a travel tale regarding Laos after your return as its a country on which not much has been written.

Regards,

M. Fahad Khan


hafeezrm profile image

hafeezrm 7 years ago from Pakistan Author

Thank Fahad for your support.


Madiha Mahmood 7 years ago

Sir the whole article has been very helpful..thank u!!!

ur travelling tales are very interesting..i enjoyed reading them!!!

:-)

keep writing!


Munesh kumar 7 years ago

thank you for uploading this hub it helped me in exams,


MUHAMMAD DANIAL 7 years ago

ASSALAMUALKUM

WHOLE ARTICLE IS REALLY GOOD.

SIR YOU POST YOUR TALE WHEN YOU COME BACK FROM VIETNAM WITH PICTURES AS WELL.

THANK YOU


SHIR ATTIQ UR REHMAN 7 years ago

THANK :

THE LAST AND THIS ARTICLE HAS VERY HELPFUL IN THE EXAMINATION AND ALL ARTICLE HAS BEEN HELPFUL IN THE PROJECT MANAGEMENT.

THANK AGAINS SIR YOU HAVE POST THE ARTICLE OF MY COURSE RELATED AND VERY HELPFUL IN MY PROFFESSIONAL IN MY LIFE.

GOD BLESS YOU:


hafeezrm profile image

hafeezrm 7 years ago from Pakistan Author

Thanks Shir & Danial for your comments.


sana rao 7 years ago

dear sir,

thankz sir for sharing this informatic article.


shahnawaz sheikh profile image

shahnawaz sheikh 7 years ago from karachi

Hello sir,

An another interesting article sir , i hope i would have read it earlier (before the exam) but indeed a good read especially the LAUGH AT ME PART, Thank you sir for your support and guidance , hope you will remember us and keep sending more and more interesting articles and advices, Hope u the best on your next Adventure and do keep us updated on it, GOD BLESS YOU , and have a great time in VIETNAM . PS: don't forget to go to CON DAO and Phu Quoc island ,i have heard they are breath taking.


hafeezrm profile image

hafeezrm 7 years ago from Pakistan Author

Shah Nawaz, I have two months of free time and so I would go to all worth seeing places.


JAWAD KHAN 7 years ago

$!R the whole article is very helpfull & after that any body can easily understand matrix, process product and network structures..

thanX @lot $!R !!!

!N @DD!T!ON to D!$

Your travelling tales are very interesting ! feel em into it may Allah also give me an opportunity to visit such wonderfull portions of the world if i go i bring ur tales with me :) ! surely get help 4rm dem..i enjoyed reading them @lot!!!

!n de end i wanna pay thanX 4 ur support in every manner.t.crx

ALLAH bless you $!R Aameen


jaydee khan profile image

jaydee khan 7 years ago

$!R the whole article is very helpfull & after that any body can easily understand matrix, process product and network structures..

& the view of monkeys reagrding organization is so humorous :D

 

thanX @lot $!R !!!

 

!N @DD!T!ON to D!$

 

Your travelling tales are very interesting ! feel em into it may Allah also give me an opportunity to visit such wonderfull portions of the world if i go i bring ur tales with me :) ! surely get help 4rm dem..i enjoyed reading them @lot!!!

 

!n de end i wanna pay thanX 4 ur support in every manner.t.crx

 

ALLAH bless you $!R Aameen


Qamar 7 years ago

Another interesting article to get knowledge about it ... but would that we got it before exams . Anyways sir it has been a great time with you to gain knowledge about every aspect of Project Management . And sir don't forget us to further mail such type of articles related to increment of our knowledge .

And best of luck for the futher sir and have a safe journey in VIETNAM and all places that you are going to travel and sir please post the pictures .

Regards,

Qamar-ul-zaman


kashan pirzada 7 years ago

Thanks for sending us articles, these articles help us in every time during studies, I learned a lot from this coursce and inshallah i will retain it. one requst is that kindly share your knowledge through article ever as possible. And forgive all my mistake and always remember me in your prayers!

your student

kashan Pirzada!


fatima_iqbal_BU 7 years ago

Very Nice Article. Thanks for uploading it.

Sir my Visa also have arrived from Qatar, and I am planning to leave for Qatar by the first week of July. I enjoyed your every class. Thanks for your Support. Miss You Sir.......

Fatima Iqbal


NNazir profile image

NNazir 7 years ago from Pakistan

Thank you v much for the hub...

The importance of Project Management (PM) was clear as a cloudless sky when I studied about managing 'field operations' in the 'Marketing Research' course. All the components of PM were there from time scheduling - managing time and activities for the field work - to budgeting to project evaluation - in marketing research it's called performance evaluation.

Thank you so much for all your efforts.

Waiting to read about your trip to Vietnam & further hubs on project management...


Muhammad Adeel Aleem 7 years ago

thanx once again... nice and informative article.. please keep writing so that v can enable to enhance our concepts and skills...


maria arif 7 years ago

sir thank you for the summarised information.


Hira sami 6 years ago

very much informative...u have explained forms & structure in a very easy way....

thanku sir....


waystodeliverproj 6 years ago

Another great hub i think..! i've read some of you hubs ang i find it really useful for me..still looking for more hubs from you sir..


Neil Ashworth profile image

Neil Ashworth 6 years ago from United Kingdom

That's really good info, thanks for sharing. Very good piece of writing.


joe kolinger 6 years ago

Good info! Very useful hub.

http://www.orgchartpro.com for best of orgchart software.


ASMA NAZ 4 years ago

your way of teaching is very awesome.when i opened my inbox & clicked on this URL i was really amazed to see a new way of learning through your hub pages. i must say its easy, more clear and effective way of learning.

Thanks.


hafeezrm profile image

hafeezrm 4 years ago from Pakistan Author

Thanks Asma Naz for your comments.


muhammad adil khan 4 years ago

Sir the whole article is very helpful & after that any body can easily understand matrix, process product and network structures.

Thank again sir you have post the article of my course related and very helpful in my professional life.


hafeezrm profile image

hafeezrm 4 years ago from Pakistan Author

Thanks Muhammad Adil Khan for your comments.


Abdinur 2 years ago

Thank you sir, I was in confusion and my understanding of this topic was a scattered and I couldn't grasp it at once. Now after reading your summary I've got a good perception and aptitude way of getting the things into a quick and correct self confidence.

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