2. Most functional organizations are resistant to change (Kerzner, 1997). If promotions are not handled well, an employee may be discouraged if a lower performing peer is promoted over them. There are only line… Operational work maintains an existing sales channel, whereas projects are one-time, unique expenditures with a defined budget, beginning and end dates, and they accomplish a specific goal.. (d) Low motivation of staff. If you need assistance with writing your essay, our professional essay writing service is here to help! Project-Based Organizational Structure. All team members report to them. 3. This will reduce communication channels. An accurate estimate reduces the risk of project overruns, thus sharply curtailing negative effects on business. The following are a few disadvantages of the functional organizational structure: 1. The functional matrix approach is much like the dedicated functional approach (see above) except that there is a project manager coordinating the project activities. These structures have many disadvantages as well. Examples include the salary of the project manager and temporary rental space for the project team. The matrix in its simplest form is shown diagramatically in figure 2, … Downsizing and restructuring within the ConAgra group has induced some morale problems from top management down to the individual plants. It’s a tricky situation. The first disadvantage of this organizational structure type, is that people place more emphasis on their functional specialty to the detriment of the project. A highly skilled employee costs more. If you remove people from their functional jobs, they might find … In organizations where the culture is not conducive to project success, I believe that the organizational structure plays a more important role to project success. ... several disadvantages in functional PM structure, including: No one “manages” a certain project, a project is managed by multiple functional managers, this can lead to the following: The client is not able to know what the status of the project really is, as no one can give him the whole picture. Project releases are broken down into smaller time-boxes called iterations. Rotation from project to project reduces employees’ loyalty to the parent functional department. This will reduce communication channels. Communication is often a very effective way to solve problems, deal with risks, and ensure that tasks are completed on time. It would be advisable to use a project matrix instead of a dedicated project team when, the parent organization cannot afford to have key personnel completely devoted to project work, the parent organization has both project work and non-project work, and as a general guideline, less than 75% of that work involves projects, project work is not very complex (does not involve coordination of many individuals or functional organizations within the company). There is again the “we-they” syndrome. This can result in mismanagement and discord. They are all on the same boat and they stick together, offering each other lots of support. After a while, the employees may start feeling monotony or boredom. The project … Below are the disadvantages of the projectized organizational structures. The disadvantages of the functional organization are as follows- 1. The project structure is the easiest to work with, but still has some drawbacks: Having a team dedicated to one project is an expensive commitment. A deliberate conflict is establishedbetween the project officer and the existing department heads because of the overlapping of authority delegation. In general, projects in a functional organization take longer to complete (Larson & Gray, 2011). They always give more importance to their departmental objectives. Each employee will report to his direct functional manager. These team approaches have all different set of advantages and disadvantages to them. Then we will be able to develop plans, strategies and responses that will make your project management approach effective. There is a very low level of communication between the two departments, and it results in po… The project manager is basically a “consultant” or assistant that has indirect authority over the project. The culture of each organization is different just as one person is different from another. There is a great deal of responsibility shown. If this is the case, establishing (or outsourcing) a dedicated project team is the way to go. This reduces cost – compared to the dedicated project team approach – as duplicate jobs are eliminated. Note that an objective is different than the project goal (which, for example, is to create a certain product). Conversely, with regard to performance, enhancing means adding value of the project. The dedicated project team approach should also be considered if the organization’s resources are already stretched to the limit – i.e., committed to other projects/duties. ADVERTISEMENTS: Main disadvantages of functional organisation: (1) Ignorance of Organisational Objectives: ADVERTISEMENTS: Each departmental head works according to his sweet will. Functional managers must aspire to the responsibility for overseeing work performance in his/her functional area. In other words, functional managers are the bosses and the project managers are the “second bananas.”. What Are the Advantages and Disadvantages of a Functional Organizational Structure? In organizations where the “culture stresses internal competition and differentiation, whether or not the project manager has authority over the project team would be a critical factor to project success. Communication is two way within each department which allows for a friendly environment within each department. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. I.E., the project comes before anything else. Objectives also must be measure, for example, the product must cost less than $10. A good analogy can be given by comparing the culture of an organization as the “river” and the project as the “boat” that travels on it. Employees tend to learn from each other since those with the same specialty (or set of skills) are grouped together. 1st Jan 1970 Functional approaches have absolutely no cost to them and provide more than adequate flexibility in the use of staff. In this structure, people are managed through clear lines of authority that extend through each group to the head of the group and, […] Lack of teamwork and reduced flexibility may cause conflicts between departments and units. Direct overhead costs can be tied to project deliverables or work packages. In neither the functional nor the dedicated approach does this situation exist. The key is to use these as guidance for decision making and indicators of progress. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. This document ensures that all stakeholders are equally informed of how, when, and why communication will happen. The Disadvantages of a Cross-Functional Sales Team. However, its disadvantages include poor integration and a distinct lack of ownership that does not leave employees discouraged to project related activities. 2. The project manager has to facilitate all aspects of the project. Categorized: Organizational Structures. Here, organizations encourage employees to share their lessons learned. This ... (2005) sum up the disadvantages of the functional organisation thus: De-emphasises overall company objectives; – The project manager’s full power and authority may decrease the project team’s motivation. Functional managers pay more attention to their own departments and ignore others’ interests. Likewise, content is only pulled into the upcoming iteration as the previous iteration is coming to a close. In a functional or, perhaps, a matrix approach, they may have a home to return to. Disadvantages of a functional organizational structure include: - Not getting the best resources for the project: Functional managers sometimes give their worst resources to the project managers, because either they want to get rid of them for some time or they want them to learn and get some experience while working on a project. The degree to who has more control depends on which “grade” of matrix this is: functional, balanced or project. Content is pulled into a release just prior to its start, and only as the previous release is winding down. Cooperation and communication between departments and units may be poor. Project managers are in charge and they have complete authority over resources. This decreases the … Employees may find it boring to repeat the same task over and over, and become less enthusiastic over time. The matrix organization is a hybrid structure that overlays the project structure on the normal functional … The project manager calls most of the shots including which functional personnel will be assigned to the project. Projects are approved only on the basis that they will improve functional performance. 4. A functional project management structure is one of many organizational structures that dictate how the project manager will operate within an organization. The structure needs to be designed to help develop collaboration among individual team members; all in a cost effective way with a minimum of duplication of effort and overlaps. – The project team can be stressful because there is always a deadline (milestones). At the same time, they allow others to learn and benefit from a shared corporate knowledge base. Predicting the outcomes of any project is difficult because there are numerous methods for estimating what a project would cost. Support good decisions, Schedule work, Determine project length/cost, determine if project worth doing, Determine how well project is progressing. Company Registration No: 4964706. A common way to differentiate between business organizational structures is between ongoing operational work versus capital projects. The difference in priorities of one unit can affect other units as well. When this happens, the unfortunate loser is typically the project manager. There is no WBS on an Agile project, at least not one in the traditional sense. As a manufacturing facility, the emphasis is on functional responsibilities – they come first. For instance, such organizations tend to deter cross-functionalcommunications. The lack of new challenges can make them unenthusiastic for the job at hand. In projectized organizations, all activities are managed through the projects. Employees do not report to multiple managers. Simple matrix organization. The functional manager’s role is limited; in some situations, the functional manager’s department can even act as a “sub-contractor” to the project. The work can be quite one dimensional. The project manager has the final say on the major project decisions. Lower-level project rollups frequently include only direct costs. This entry was written 5:37 pm November 3, 2009 by admin. Since the power dynamics between the functional manager and the project manager may not be as clearly defined within the matrix, confusion about the specific managerial roles may arise. project structure is to provide a formal environment that the project manager can use to influence team members to do their best in completing their assignment and duties. I am also comfortable keeping a chart of external and internal dependencies to help manage commitments. Unfortunate loser is typically the project is stronger than a purely functional approach there... 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