Essay: Challenges faced by the Project Manager when working within the alternative organizational structures

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Executive Summary

The objective of the report is to critically review on the different challenges faced by the Project Manager when working within the alternative organizational structures used to implement projects.

In simple terms, Project Management is the process of planning, organizing and controlling of the scope, budget and time of the recruiting program project.

Figure 1.a: Project Management flow (Lim, M., G. Griffiths, and S. Sambrook 2010)

Part 1: Three types of Project Management Organizations
Generally, there are 3 current types of organizational structure of project management as listed below;
‘ functional organizational structure
‘ project-based organizational structure
‘ matrix organizational structure

Figure 1.b: General organizational structure (John Carroll 2012)

1.1 What is Functional organizational structure?
Functional organizational structure is actually the traditional way of organizing a project, whereby the structure is actually divided into its various functions. For example, major functionality unit such as finance, marketing, manufacturing and etc. report upwards to the respective CEO of the organization.
In other words, each divided functions would have their own reporting staff or project resource. Therefore, an employee would be reporting to one respective leader only and the chain of command is absolutely essential. Since each reporting line is only concerned with their own functions, issues may rise when an employee of one function needs to liaise further with an employee of another function.
Therefore, in order to liaise with an employee of another function is actually to escalate upwards to the functional head that would then seek the other functional head and back downwards to the employee of the other function accordingly. It is actually a very inefficient approach; however the good point is that each function works as a very effective and independent team who are highly focused on their goals. On the other note, it would be much easier to manage resources with similar skills, level of knowledge and experience which would ease the task of workload assignments for a more effective outcome.
However, a major drawback to the functional organization structure is that the respective project manager would be required to work with resources from other functions with no formal authority due to the fact that employee from each function would mainly be reporting to their own line or functional manager. The Project Manager has minimal form of authority over the availability of resources and plays the role of project coordinator instead.
It is obvious that several projects at the same period of time may have to compete for the available resources which would need to be sorted out by the respective project managers. As mentioned earlier, the project team members will more likely serve their loyalty towards their respective functional manager (Sophie Johnson 2000).

Figure 1.c: Functional organizational structure ( 2010)
Two different approaches in undertaking projects in Functional organizational structure;
‘ Divided: where a department works on their part of the project assignment and would later handover to the next relevant department to complete the workload accordingly.
‘ Cross Functional: where members of different departments work at the same point of time on different parts of the project assignment.
Advantages Disadvantages
the use of personnel with greater flexibility, as long as the choice of a suitable functional departments as the project supervisor, the department will be able to provide professional and technical personnel required by the project, and technology experts can also be used by different projects and after completion of the work can go back to his original work. projects often lack of focus, each unit has its own core functions of general business, sometimes in order to meet their basic needs, and responsibility for the project will be ignored, especially when the interest taken in the project brought to the unit not the same interest.
when the project team members leave, the functions can be used as the basis for maintaining the continuity of the project. such organization has certain difficulties in the inter-departmental cooperation and exchanges.
functional department can provide a normal career path for professionals. the motivation is not strong enough for project participants, they think the project is an additional burden, and not directly related to their career development and upgrading.
sometimes, none should assume full responsibility for the project, often the project manager is only responsible for part of the project, others are responsible for the other parts of the project, which leads to difficulties in coordination situation.
Table 1.a: Advantages and Disadvantages of Functional Organization (Nicholas, J M 1989)

Figure 1.d: A Typical Functional Structure ( 2010)
Note: The dotted lines on the graphic represent where the Project Manager coordinates projects and the gray boxes represent staff engaged in project activities.

Figure 1.e: Key factors of Functional Organization (SkillSoft Corporation 2007)

1.2 What is Project-based organizational structure?
Moving on with the next organization structure is project-based organizational structure. As per the naming convention, each project manager reports directly to the respective CEO of the organization. This structure is also referred to the development of an independent project team since the management function or unit is actually separated from the other units of the parent organization.
The individual project team will have their own resources and management function accordingly. With reference to the earlier statement also leads to the fact that each project manager will have their own dedicated full-time team members or available resources. However, the project-based organizational structure would only suit an organization that drives projects as well as the delivery of these projects as their core business or scope.
In simple terms, most of the organizational resources are involved in project work rather than operations. The project team usually report directly to the project manager or alternatively, provides support services to the projects. It is also known that the project managers actually have the utmost authority rule over the project. However, the involved project teams are usually dismissed once the project had been completed. These project team consisting of members of various specialties usually physically work in the same place (Development Cooperation Handbook 2013).

Figure 1.f. Project-based Organizational Structure ( 2010)
Advantages Disadvantages
focused on this project team, project manager is solely responsible for the project, the only task for project members is to complete the project, and they only report to the project manager, avoiding the multiple leadership. when a company has several projects, each project has its own separate team, which will lead to duplication of efforts and the loss of scalable economies.
the project team’s decision is developed within the project; the reaction time is short. the project team itself is an independent entity, prone to a condition known as ‘Project inflammatory’ disease, that is, there is a clear dividing line between the project team and the parent organization, weakening the effective integration between project team and the parent organization.
in this project, members work with strong power, high cohesion, participants shared the common goal of the project, and individual has clear responsibilities. the project team members’ lack of a business continuity and security, once the project ended, return to their original functions may be more difficult.
Table 1.b: Advantages and Disadvantages of Project-based Organization (Nicholas, J M 1989)

Figure 1.g: A Typical Project-based Structure ( 2010)
Note: The dotted lines on the graphic represent where the Project Manager coordinates projects and the gray boxes represent staff engaged in project activities.

Figure 1.h: Key factors of Projectized Organization (SkillSoft Corporation 2007)

1.3 What is Matrix organizational structure?
On the contrary, the employees in a matrix organization are actually structured vertically in their functions, but report horizontally to a given project manager or more. In simple terms, the functional managers look after ‘pay and rations’, meanwhile the project manager allocates the workload for the project. Both the operational managers and project managers contribute to performance reviews for the project teams.
As we are aware of, the operational manager plays the role as the resource manager and should be consulted when a project manager seeks for resources for their assigned projects. In cases where there are insufficient resources to accommodate for all projects, some form of compromise is required whereby the project managers will then need to negotiate with the other respective project managers accordingly.

Figure 1.i: Matrix organizational structure ( 2010)
With reference to the relative power of project managers and functional managers, there are different types of matrix systems in practice as listed below (Kevan Hall 2009);
‘ Functional Matrix ‘ the functional managers have greater powers than project managers.
‘ Project Matrix – the project managers have greater powers than functional managers.
‘ Balance Matrix – the functional managers and project managers have the equal powers.

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