4th lecture

Organizational structure
• Organizational structure is the framework of the relations on jobs,
systems, operating process, people and groups making efforts to
achieve the goals.
• Organizational structure is a set of methods dividing the task to
determined duties and coordinates them (Monavarian, Asgari, &
Ashna, 2007).
• [Link]
organization
Organizational structure
• Organizational structure determines formal relations and reporting in
organization and it shows the number of levels in the hierarchy and it
defines the span of the control of managers.
• Organizational structure determines the position of people as working
in group in a unit and it divides the units in the entire organization.
• Organizational structure includes the design of systems by which all
units are coordinated and effective relation in organization is
guaranteed.
What Is Project Organization in Project Management?

• The term project organization refers to the style of coordination,

communication, and management the project team uses
throughout a project lifecycle.
• By applying project organization, you optimize resources,
provide clear communication about roles and responsibilities,
and reduce potential roadblocks.
Features of an Organization Structure
 Hierarchy
The hierarchy should describe a clear line of authority and define decision-making
responsibilities.
 Division of Labor or Specialization
This refers to the workload (managerial, task oriented, etc.) associated with the roles. It is
the degree to which activities or tasks in an organization are broken down and divided into
individual jobs. High specialization can be beneficial for an organization, as it allows
employees to become “masters” in specific areas, increasing their productivity as a result.
However, low specialization allows for more flexibility, as employees can more easily
tackle a broader array of tasks (as opposed to being specialized for a single task).
Chain of Command
An unbroken line of authority that extends from the top of the organization (e.g. a CEO)
all the way down to the bottom. It clarifies who reports to whom within the organization.
Span of Control
It refers to the number of subordinates a superior can effectively manage. The higher the
ratio of subordinates to superiors, the wider the span of control.
Centralization
Who makes the decisions in an organization? If decision-making power is
concentrated at a single point, the organizational structure is centralized. If
decision-making power is spread out, the structure is decentralized.
Formalization
Similar to specialization, formalization deals with how jobs are structured within an
organization. The key differentiator here is that formalization also takes into
account the degree to which an employee’s tasks and activities are governed by
rules, procedures, and other mechanisms. A formal organizational structure seeks
to separate the individual from the role or position, as the role or position stays the
same regardless of who’s holding it.
Position Type (Line vs. Staff)
A line position is a team member who is directly involved with the product.
A staff position supports those in line positions, but are not directly involved
with the product.
Types of Project Organizational
Structures

• There are three types of organizational structures in project

management: functional, matrix, and projectized.
Functional Project Organizational Structure
A functional project organizational structure organizes its hierarchy around traditionally functioning
departments. A functional manager heads each department and reports to an executive. These
functional managers — not other staff — coordinate the project, and they select team members
from each department to support the project, in addition to their functional responsibilities.
Projectized Organizational Structure
A projectized or project-based organizational structure creates a dedicated project division within
an organization. The project coordination operates vertically under this division. Project managers
maintain sole authority for the project and are assigned dedicated staff who work toward project
goals.
 Matrix Organizational Structure

A matrix organizational structure is set up on a network to demonstrate staff reporting patterns to more than
one authority. It is a hybrid of functional and projectized organizational structures, and project managers
share authority with other program managers in this structure. Depending on the decision-making capacity of
the project manager, a matrix structure is one of three subtypes: weak, balanced, or strong.
Balanced Structure
In a balanced matrix, the project manager also holds a staff position and does not utilize the project
manager role to its full capacity. The project manager still has little authority over project decisions,
budget, staff, etc., and primarily serves as the point of contact and coordinator.
Strong Structure
A strong matrix is most similar to a projectized organizational structure. In it, a dedicated project manager
falls under a functional project management department, has dedicated cross-functional staff, and is
supported by a manager of all the project managers. This subtype offers the project manager the most
authority as they work across a matrixed environment.
Organisational chart
• Is a diagram showing the organisational structure of the organisation.
• An Organisational Chart is a diagram which sets out the job titles of
the various people that work in the company and who they are
responsible to.
• This usually involves the CEO (Chief Executive Officer) or Directors
sitting at the top of the diagram, the most junior staff at the bottom
and the other staff in between depending on their seniority.
Making a Project Organizational Chart

• Cristóbal et al (2018) stated that when making organization

chart for a project “Several important aspects to consider. All of
these factors will shape the context in which decisions are
made, the form of the organizational structure, the ability of
project managers to make decisions, and (first and foremost)
the future of the project”.
• Decision Making: Consider the complexity of both physical and
operational boundaries for how decisions are made. Ask: How
simple are the relationships? Are responsibilities allocated equally?
Who will be given what authority? What tasks are weightier than
others?
• Design: Remember that all features (division of labor, spans of
control, etc.) must be part of the design process, and take care to
visualize how project team members will interact. Assembling the
control, coordination, and communication can feel like a puzzle. Try
a few different arrangements to envision how these three C’s will
operate so that you can find the cleanest lines between team
members. Keep the design simple and flexible to allow for changing
roles as the project evolves.
• Balance: You can reduce administrative, social, and technical issues
by paying attention to how roles and responsibilities are distributed.
Aim to limit the number of direct reports under any one person (five
max is suggested).
What is a functional organizational chart?

• A functional organizational chart is a visual representation of an

organization’s structure. This chart is unique in that employees are
grouped based on their functions, roles, and expertise within the
company. In a functional organizational structure, organizations
establish distinct groups based on employees’ functions, skills, and
areas of specialty. Each group of employees has a functional manager,
which is clearly depicted in the functional organizational chart.
A functional org chart’s structure includes the
following components.
• Executives–The highest-ranking executives, such as the CEO and
upper management, are at the top of the chart.
• Functional Department Heads–Below the top management, the
functional org chart is divided into sections based on organizational
functions. The functional department head or manager is listed next.
• Department Staff–Under each department head are each of the staff
members who work within that function of the organization. Staff are
organized by skills and functions.
What is Matrix Organizational Structure
chart?
• A matrix organization is a company structure were teams report to
multiple leaders. The matrix design keeps open communication
between teams and can help companies create more innovative
products and services. Using this structure prevents teams from
needing to realign every time a new project begins.
Matrix Organizational Structure chart
What is projectized organizational structure
• An organizational structure that focuses on projects, its process, as
well as the tasks within it.
• Projectized structure forgoes the concept of specialized departments,
instead primarily grouping staff members into dedicated, often cross-
functional, project teams. Project managers hold full authority over
these teams in place of functional managers.