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HRD Management

Debating the Organization Structure

By Mainak Biswas April 21, 2007 - 712 views

The evening of 19th April was different at our HQ in Kolkata. There was a gathering some senior executives in the CEOs office where I ran a presentation on the proposal of restructuring the organization. The gathering also included some tehnical leads from our organization. The main idea was to get as many different views as possible. Here is a brief of that:

The current organization structure

In our current structure all authority and responsibilities lies with the functional heads; the structure is created by having separate departments such as Design, PHP, SEO. 

This structure is not “pure devil” and it does have benefits like:

  • It is simple and easy to understand
  • Coordination across groups is left to the functional heads
  • The organization overhead is low
  • The career progression is clear
  • Birds of a feather are flocking together

Disadvantages of this structure?

  • Coordination across departments on project that requires multiple type of specialization is poor
  • CYA is easy, as the blame can be put on other departments.
  • Separation of management and technical discipline is not there.
  • No body is having the full-time job of managing projects and thinking about customer.

Organizing by project teams 

This will mean creating a structure that comprises of independent, self-sufficient project teams that exist autonomously within organization. This team will be assembled for a specific project under a project manager. The team will be temporary in nature and its member will be reallocated when the project is complete. 

The project will be organized primarily around the project manager, and then 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.

Benefits of this:

  • Flexibility in allocation of resources
  • Responsibility for project delivery lies with one person who is clearly identified
  • Senior management is free from managing the project as there is now a full time project manager taking care of this. Thus, senior management can focus on Strategy etc.

Disadvantages of this structure 

  • Growth of individual technical skills for a team is not possible or very difficult
  • The administrative overhead is very high in managing the resources when they are not allocated to a project
  • Leverages exclusively on the project manager for delivery
  • The managers may get overloaded with excess inflow of projects.

The Alternative? Best of both worlds i.e. Matrix Structure

In this structure the staff and resources that are required by the project manager are not permanently assigned to the project, but are obtained from a pool controlled and monitored by a functional head. People that are required to perform specific functions in a particular project are allocated as necessary and after their job is done they will be returned to the control of functional head for reassignment. 

The members of the project team and their functional supervisors will have the responsibility for timely completion of allocated task within acceptable quality limits and they will report to both project manager and the functional heads. 

Advantages of the creating a matrix organization 

  • It has the benefits of both structures i.e. (current functional organization and project team structure).
  • Allows for just-in-time allocation of resources based on problem at hand.
  • The project personnel can retain belongingness with their functional team and still be accountable for projects as well.
  • Allows independent growth in technology and management skills
  • The customer relations can be better with having SPOC throughout project lifecycle
  • Projects can be controlled better
  • Profit margins on the project can be higher as resources having the right skills are allocated for the job instead of just having one person to do the entire thing which may require learning or rework
  • Allows projects to be technically brilliant along with being well managed

Disadvantages of the matrix organization

  • There is a potential for conflict between functional vs. project groups.
  • The administrative overhead is higher
  • Increase in managerial overhead
  • A person may be shifted across projects very frequently which may lead to insecurity.

So, what’s the conclusion?
Well, to be honest after hours of debate, we are yet to reach one! I will keep everybody posted on what is finally decided.

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