CM 651 - PROJECT MANAGEMENT

MODULE 5
OFFICE ORGANIZATION
By:
Larah D. Peñaflor
Mecaella Mae D. Fernandez
Alyssa Kaye V. Avila
Chapter Concept:
✓ 8 Common Types of Organizational Structures in Project Management
✓ The advantages and disadvantages of each

✓ The role of the Project Management Organization

✓ The Features of an Organization Structure

 Office Organization
a process of defining and grouping of office activities into main heads of
functions, select suitable personnel, assign jobs to them and delegate
authority to them for performing the jobs, coordinate the activities of
different individuals and provide necessary facilities like forms, stationery,
equipment, machines and suitable working environment to enable the
persons to perform their work efficiently.
 8 Common Types of Organizational Structures in
Project Management
An organizational structure is a standard hierarchy of operations. It defines how
you can divide, coordinate, and direct groups. More so, it defines the positions and
describes the tasks required to achieve an organization’s objectives and vision.
1. Organic or Simple Organization
This type of organization is very flexible and able to
adapt well to market changes.

This structure is characterized by having few rules,

regulations and management layers and a
decentralized decision making a layout. By
implementing decentralized decision making,
employees of lower ranking will have the ability to
make important decisions.
This will help empower employees leading to greater
creativity and better problem solving.
1. Organic or Simple Organization
ADVANTAGES DISADVANTAGES
• The employees are very much involved in
decision making and problem solving; this • No Boundaries
enhances motivation, commitment and gives a
variety of perspectives • Unproductive Directives
• The ease of ability or change enables organic
organizations to be more creative and • Ineffective Leadership
imaginative
• They have a flexible approach to the continually • Communication Barriers
changing financial and customer environment.
2. Line Organization
This is the simplest form of organizational structure commonly adopted by small
companies. It has well-defined authority levels in the hierarchical structure. Power flows
from the top down to different operational levels or workers.
2. Line Organization
ADVANTAGES DISADVANTAGES
• Simplicity • Overloading
• Directness
• Fixed Responsibility • Lack of Specialization
• Unity of Command • Lack of Initiative
• Flexibility
• Economical • Instability
• Direct Communication • Scope for Favoritism
• Coordination
• Red Tapism
3. Line and Staff Organization
The Line and Staff Organization
is a modification of the Line
Organization. Here, functional
specialists work with line
managers to guide and advise
them. This structure is more
common in present-day, and
most of the larger enterprises
adopt this type of set up. The
staff consists of two categories;
the general and the specialized
team.
3. Line and Staff Organization
ADVANTAGES DISADVANTAGES
• Staff can make quality • Increased confusion and conflicts
decisions, get support from
specialists, and enjoy better among the staff
coordination. • Higher costs on hiring specialist
• Get training to enhance skills, • A tendency to develop personal
get an opportunity to work in image within the group
research & development.
4. Functional Organization
The Functional Organization groups workers based on their area of
specialization. This structure is an extension of the Line Organization. The
functional manager leads the team and manages all the operations or
businesses.

The organization's head is the president, followed by the vice president, and the
chain goes on. Furthermore, the leaders of departments foresee their
departmental performance. So they collectively help the organization control
quality and uniformity.
This type of organization is suitable for manufacturing or engineering companies.
It supports ongoing operations and practices for producing standard products.
4. Functional Organization
4. Functional Organization
ADVANTAGES DISADVANTAGES
• It groups employees based on functional • Employees get bored from the routine and lose
skills for a higher degree of performance. enthusiasm.
• Employees have experience in the same • It limits the management skills of functional
field, resulting in higher output. Also, they managers. Hence, they face restrictions on their
deliver high-quality services and results. growth path and remain specialists. So they're not
prepared for top management posts.
• Accountability is evident, as the roles and
• Departments are more concerned with their
responsibilities are clearly defined. departmental goals. Hence may be less responsive to
• Hierarchy is visible and no need for multiple the organization’s overall objectives.
reporting • Hiring costs are too high as high-skilled employees
• No duplication of work as each department cost more.
is different. Also, the job description is clear. • It causes conflicts in making critical decisions as a
• Career path for the staff is clear and visible result of bureaucratic hierarchy. Functional managers
have full authority and may make arbitrary decisions.
5. Divisional Organization
This type of organization often resembles a Functional Organization. The team members
work in different departments. This setup splits the employees into segments based on
products, markets, or services.
This design focuses on service lines like products, customers, area, and time. Since they
operate as small organizations, they're called “self-contained structures.”
This type of organization is suitable for companies that
- Operate in different geographical locations,
- Have chain stores with subsidiaries, and
- Banking and insurance business
Here, the project managers may or may not exist or may be hired on temporary
assignments.
5. Divisional Organization
Divisional Organization
Advantages
• People work in different geographical locations and enjoy different work
environments
• Share ideas and enhance skills, thereby creating a collaborative work culture.
Thus enhancing overall productivity.
Disadvantages
• This structure affects the integration of the organization as a whole.
• The autonomous nature often results in duplication of functions and
resources.
• Segmentation creates boundaries among divisions and may lead to poor
inter-unit coordination
6. Project Organization
Project organization is a temporary setup formed for specific projects. It's also called
“projectized organizational structure.” The project manager assigned for the project is the
head of this structure.

Once the project is complete, you may choose to dismantle this setup or move it to form a
new project. In the case of a new project, the project manager might have to reshuffle the
staff to fit the new plan. You’ll hire resources or specialists from different functional
departments.

As a project manager, you can use allotted resources until completion and closeout. Albeit
you're accountable for all the activities and timely completion of the project. In other
words, you must spend based on the project budget.
6. Project Organization
Project Organization

Advantages
• Easy to communicate, hence can stay up to date
• The team can have a strong sense of identity as all are working together to
achieve a common goal
• Manage resources efficiently and effectively
Disadvantages
• No clear growth path for the team once the project gets completed
• It's expensive because the organization dedicates all the specialists for one
single project.
7. Matrix Organization
This one is the combination of a projectized and functional organization. This hybrid organization
overcomes the limitations of each organization. Here, both the functional and project managers share
their respective authorities.
Project managers are generally responsible for
- Overall integration
- Project planning
- Execution of the project, and
- Completion of project activities.
All activities must be done using the assigned resources.
The functional managers are concerned with the operational aspects of the project. They’re also
responsible for providing technical guidance.
The functional staff specializes in the skills required for the project. Though project managers manage
the project staff, functional managers control the process.
7. Matrix Organization
Matrix Organization
Advantages
• It helps in sharing resources efficiently
• Decision making is balanced and flexible
• Staff members can communicate with each other across boundaries
• Pleasant environment
• It has a clear career graph and job security; hence, members would be more loyal to
the organization
Disadvantages
• The dual reporting structure add confusion and results in conflicts
• Create issues when there is no coordination between functional and project managers
• Resources may be under-utilized if you don't assign them with skill-related tasks
• Costly to maintain as it has many managers
• You need to maintain resources throughout the project, no matter how long it takes
8. Virtual Organization
A virtual organization is a recent development that
involves different locations. When your team
executes a project in one area, you can manage it
from any other place. So you can distribute resources
to your project team regardless of location.
You can connect all the locations virtually. The other
names for this organizational structure are:
- Digital organization
- Network organization, or
- Modular organization
ICT (Information and Communication Technology) is the backbone of virtual organizations. This
organization is a social network without vertical and horizontal boundaries.
This setup is most suitable for software or IT companies.
Virtual Organization
Advantages
• Faster and cost-effective as there are no boundaries to work and communication.
• Lower operating costs as no permanent set up required (no need for office premises)
• Have options like flexitime, part-time work, job-sharing, several and home-based
working, hence increased
• Employee satisfaction and efficiency
• Can have a larger talent pool
Disadvantages
• No physical contact or communication, thus, lacks team integrity
• Difficult to restrict information sharing as your locations are different
• You have to spread resources across various locations and time zones
• Resources require training for virtual interaction
• Different time zones cause delayed responses
Wrap Up
With the different types of organization structures, it’s easy to know what you
need. Though each structure has limitations, large and complex organizations
adopt the matrix organization.

Line and staff organization has a direct and straightforward hierarchy. Hence it's
used in simple organizations. Software or information technology businesses
often adopt virtual organizations.

Although choosing the right organization, type ensures that you do well in the
market.
The role of the Project
Management
Organization
The key project management Organization Roles and
Responsibilities are to:
❑ Provide a structured governing project management body
❑ Provide a central repository for all projects and project information
❑ Provide a centralized management structure for all management
functions
❑ Provide project portfolio reporting capabilities
❑ Outline a well-defined projects management process or methodology
 Features of an
Organizational Structure
 FEATURES OF AN Centralization is when the top management makes all the
ORGANIZATIONAL STRUCTURE decisions and planning. This structures concentrates power
at the top of the chain. While decentralization disseminates
power from the top to other managers down the chain
CENTRALIZATION AND DECENTRALIZATION
The number of individuals that report to a particular
1
manager. So, if nine people work under you as manager,
your span of control is nine.
SPAN OF CONTROL
2 In general terms, this is the division labor. So as a manager,
you can break down a complex project into smaller units.
WORK SPECIALIZATION This division allows each individual to complete a specific
3 task in a shorter time.
In this process, you divide an organization into specialization
DEPARTMENTALIZATION groups or smaller departments. In other words, groupings
4 based on jobs or roles.
Chain of Command deals with the organization’s reporting
CHAIN OF COMMAND hierarchy. This systems ensures that every manager of
5
supervisor is accountable for assigned tasks
In formalization, managers spell out rules, regulations,
FORMALIZATION
6 procedures and responsibilities that help workflow. You can
direct them to workers, teams or even the whole
organization.
Thank
You!