2.

2 FUNCTIONAL AND PROJECT ORGANIZATIONS

FUNCTIONAL ORGANIZATION Functional organization is structure in which authority rests with the functional heads; the structure is sectioned by departmental groups. What are some advantages of the functional structure? Simple and clear; coordination left to top management Reduces overhead Provides clearly marked career paths for hiring and promotion Employees work alongside colleagues who share similar interests What are some disadvantages of the functional structure? Coordination of functional tasks is difficult; little reward for cooperation with other groups since authority resides with functional supervisor. Provides scope for different department heads to pass-off company project failures as being due to the failures of other departments. PROJECT TEAM STRUCTURE Project team structure consists of an autonomous project team, existing independently of the rest of the organization. The project team is assembled for a specific project under the action of the product manager. The team is thus temporary and will be disbanded when its project is complete. Sometimes we can find design or products with special requirements that are not encompassed within one or more of the functions. This will lead to a cooperative efforts of marketing, production, engineering, and others as appropriate; as well as assistance from the accounting legal, and contracting staffs. When it is an important new effort, a dynamic and capable person from the upper levels of middle management is selected to take responsibility for this unique activity. A project is organized around this project manager, and then a few specialized assistants are provided and a project team is formed. The project manager exercises direct and autonomous control over the various discipline groups and is responsible for the coordination and monitoring of the effort of the team. Since most major organizational functions will be affected by this team, it is typically removed from the functional organizations structure. A multiple project organization is needed when the number of projects increases. There is a definite limit to the number of major projects any traditional organization can support. As the number of projects increases the managerial load on the general manager increases to the point where he can no longer cope. Advantages of project team structures Good at responding well to an immediate project need. Flexibility Responsibility for success of project clearly identified. Releases top management from micromanaging operations, so that the management can focus on the overall company strategy rather than detailed nuts and bolts.

12

Disadvantages of project team structures The actual organizational power and authority of the team manager may be a delicate issue. Greater administrative overhead. In-group vs. Out-group mentality may develop. MATRIX STRUCTURE In the matrix structure, the personnel and other resources that a project manager requires are not permanently assigned to the project, but are obtained from a pool controlled and monitored by a functional manager. Personnel required to perform specific functions in a particular project are detailed for the period necessary, and are then returned to the control of he functional manager for reassignment. Discipline supervisors are responsible for the efforts of the groups constituting assigned project personnel and for other required resources. The members of the groups and their supervisors are charged with the timely completion of the different tasks and are responsible to the project manager and the functional manager. Example: An engineer assigned for a specific period to design a subsystem of a project is responsible to the functional manager for completing the task as scheduled, and to the project manager for providing an acceptable design. The two managers report to a matrix executive. The project manager in the matrix works with the functional manager to establish the resource requirements and their timetable utilization on the project, and to work out the revisions required as the project effort proceeds. The functional manager is responsible for assuring that resources are utilized in the manner best serving the interests of the organization. The formal role of the matrix executive or top-level management is similar to the top subordinate to the position. The general manager is literally on top of or outside the basic matrix structure and therefore should have a clear perspective of all activities and personnel within the matrix. Here, however, the similarity ends. The general manager leads a dual command structure, the functional and the project hierarchies, which must be balanced through a careful blend of autocratic and cooperative managerial styles. Participation is required, for example, in the arbitration of technical disputes and in resource allocations. Autocracy is essential to the establishment, enforcement, and revision of priorities among and between the functional and project entities within the matrix. This role involve the three major managerial concerns:

balancing power - The balance of power involves allocating both project and functions budgets, orchestrating personnel assignments, and applying schedule pressures and others. managing the decision context - Management of the decision context is accomplished by establishing strategy, policy, and control systems to assure that decisions are made to benefit the overall organization rather than the individual functional department or project. setting standards - High performance standards start at the top. They must established and enforced by the general manager, since his is the only position in the matrix with the perspective and power to require top quality performance.

Advantages of the matrix organization It attempts to retain the benefits of both structures ( functional organization and project team structure ).
13

FUNCTIONAL

AND

CONCURRENT ENGINEERING PROJECT ORGANIZATIONS MODULE 2

Coordinates resources in a way that applies them effectively to different projects. Staff can retain membership on teams and their functional department colleagues.

Disadvantages of the matrix organization Potential for conflict between functional vs. project groups. Greater administrative overhead. Increase in managerial overhead MAJOR ADVANTAGES AND DISADVANTAGES OF PROJECT MANAGEMENT
Advantages: Better customer relations Shorter product development time Lower program costs Better control of projects Improved quality and reliability Higher profit margins Better control over program security Better project visibility and focus on results Improves coordination among company divisions doing work on the project Accelerated development of managers due to breadth of project responsibilities Better control over program security Disadvantages: More complex internal operations Inconsistency in application of company policy Lower utilization of personnel Higher program costs More difficult to manage Tendency for functional groups to neglect their job Too much shifting of personnel from project to project

ACTIVITY 2.1 SPACE SURVIVAL TEAM BUILDING 3 SPACE SURVIVAL In the following situation, your life and death will depend upon how well your team can share its present knowledge of a relatively unfamiliar situation so that the team can make
3

Teams in Engineering Education, Arizona University Tempe, Arizona 85287, March 1994, Section II - 4. 14

decisions that will lead to your survival. This problem is fictional, although the ranking to which you will compare your results was done by a number of space experts. Read the situation and do Step 1 without discussing it with your other team members. THE SITUATION You are a member of a lunar exploration crew originally scheduled to rendezvous with a mother ship on the lighted surface of the moon. Due to mechanical difficulties however, your ship was forced to land at a spot some 320 kilometers (200 miles) from the rendezvous point. During the re-entry and landing, much of the equipment aboard was damaged, and, since survival depends on reaching the mother ship, the most critical items available must be chosen for the 320 km trip. YOUR TASK In this page are listed the 15 items left intact and undamaged after landing. Your task is to rank these items according to their importance in aiding you to reach the mother ship, starting with 1 the more important, to 15 the least important. You should assume the number in the crew is the same as the number on your team, you are the actual people in the situation, the team has agreed to sick together, and all 15 items are in good condition. SPACE SURVIVAL TEAM BUILDING EXERCISE STEP 1: (Do this step now) Each person is to individually rank each item. 1 is most important; 15 is least important. Do not discuss the situation or the task until each member finished the individual ranking. STEP 2: (To be done after the following mini-lecture on team roles.) Rank order the 15 items as a team. Once discussion begins dont change your individual ranking.

15

FUNCTIONAL

AND

CONCURRENT ENGINEERING PROJECT ORGANIZATIONS MODULE 2

Items Box of matches Food concentrate 20 meters of nylon rope Parachute silk Portable heating unit Two .45 caliber pistols One case dehydrated milk Two 50 kg tanks of oxygen Stellar map (of the moons constellations) Life raft Magnetic compass 25 liters of water Signal flares First aid kit w/hypodermic needle Solar-power. FM receiver/transmitter

Step 1 Individual Ranking

Step 2 Team Ranking

Step 3 Expert Ranking

Step 4 Difference Ranking (1-3)

Step 5 Difference Ranking (2-3)

Your score

Team Score

16