Staff, Project Organizational Structure, and Matrix Organizational Structure - Term Paper Example

1. Title page 1. Name of school 2. Subject code 3. Title of Report – Organizational Structures Report 4. Names and student IDs of group members 5. Lecturer 6. Month, year. 2. Executive Summary The purpose of the report is to research the existing organization structures that international firms use in the globalized world noting their advantages and disadvantages. The piece has discussed and presented an in-depth analysis of the four organizational structures that include line organizational structure, staff or Functional Authority Organizational Structure, Project Organizational Structure and matrix organizational structure. The work used scholarly sources that are peer reviewed by using keywords about the subject related to organizational structures. It analyzed content from both qualitative and quantitative research findings of the subject of interest comparing and contrasting the findings of other relevant and critical scholarly literature. The findings note many organization structures that exist that work in different environments and also that work best in different businesses each indicating the advantages and disadvantages. The International firm is encouraged to venture in research and determine the best organization structure that can achieve the business and organizational goals with ease. 3. Table of contents, list of figures/tables 1. Introduction………………………………………………..……………………. …4 2. Body…………………………………………………………………………………5 I. Line organisation structures……………………………………………………5 II. Staff or Functional Authority Organisational Structure…………………….....6 III. Project Organisational Structure……………………………………................8 IV. Matrix Organisational Structure……………………..…..…………………….9 3. Conclusion & Recommendations….........................................................................12 4. References.…............................................................................................................13 4. Introduction The purpose or Aim of the report is to show the different organizational structure that exists in the contemporary times that international business firms can use to enhance their business goals and objectives in the globalized business environment noting the advantages and disadvantages of each. Business organizations play an important role in the society as noted in the contemporary times. The concept of globalization has led to increased international business transactions in the world where markets have been liberated enabling businesses to venture into the international markets. It has thus led to increased competition between the business entities as well as numerous advantages such as expanded markets and business opportunities. Numerous business environments exist with diverse characteristics, and hence the subject of organizational structure has become critical in the contemporary times especially for international firms. It determines the set up that organizations adopt to realize their goals, where the structure of an organization can either hinder or help the organization to achieve its goals and objectives whether the organization is involved in the economic, social or political sector. The diverse business environment in the international arena, as well as the diverse businesses in the world, has made the organization structure subject critical for business organizations (Dudkina 2015). It has encouraged specialization and intense research that can help business set up structures and organizations that can increase the chances of the international firms to be successful in the ever increasing competitive business environment noted globally. Businesses hence have the opportunity to choose the organization's structure among many that exists that can help them realize their business goals and objectives with ease and hence emerge successful and victorious as far as the administration and management of the business are concerned. The outline of the organizational structure report starts by stating the chosen four organizations structure that includes the Line organizational structure, Staff or Functional Authority Organizational Structure, Project Organisational Structure, and Matrix Organisational Structure. Each structure is briefly defined and introduced before the advantages and disadvantages associated with each are presented in the report structure. 5. Body Numerous formal organizational structures exist as noted in the contemporary literature that many presents similar characteristics and set up but vary regarding the philosophy that determines the structure and setups among the organizations. However, the stated four presented below are discussed in the report at an in-depth level noting their strengths and drawbacks delineated by the job descriptions and organizational chart. I. Line organizational structure The line organizational structure is the most common organizational structure that has stood the taste of time and practiced by many as noted in the world history and business organization and developments. It touches and applies in many organizations structure not only related to economics or business but also other sectors that touch on the political as well as social structures and organizations. The line organizational structure has an only direct and vertical relationship between that links the different levels in the business or firms that note that continuous line that links the lowest cadre and level in the organizations that augments and rises to the topmost level (CEO) of the organization. The organizational structure has only line departments involved in the realization of the organizational goals directly involved and linked. The departments described in some literature as ‘self-contained’ where authority in such organizational setup travels from top to down while accountability travels from bottom to up along the command chain. It gives liberation and freedom where each department has their manager and responsible for the employees and department affairs. It is noted as among the oldest simple form of organization structure. The organization structure borrowed many forms the customary military organization and set up that notes the chain of command that moves from top to down while accountability is the inverse. The feature that distinguishes line organizational structure from others is that it only has a direct vertical relationship between the different levels in the business firm. The advantages of the line organizational structure include its simplicity that allows easy operation. It explains the tasks of each worker in the organization enabling workers understand the structure of the organization and thus smooth running and operation of the business firm. Secondly, the directness that the organization structure brings makes it easy to administer and manage as each knows whom responsible to and eliminates confusion and conflicts that can waste production time. Thirdly, there is fixed responsibility for each with clearly defined duties and responsibilities for each. It reduces misunderstandings and confusion. Fourthly, it allows unity of command where workers are responsible to only one superior that increases efficiency in production. Next, it ensures disciplines and is also noted as economical because it is less complicated. It requires a minimum number of employees to adopt to the organization style and easy to make adjustments. Sixthly, it encourages direct communication and coordination because of the direct contacts between superiors and their subordinates. Finally, it encourages quick decision making because of the unification of authority and responsibility as well as encourages the development of executives by providing more opportunities for training and development (Lakatos 2010). However, on the contrary, it also has disadvantages that include the neglecting contribution of a specialist in planning. Moreover, it overloads key persons that mostly include the executives who make or get involved directly in almost all the decisions reached by the organization. It also discourages initiatives and creativity within organizations that use the line organization structure. It is unstable and might lead to the collapse of the organization in the shortest time possible in particularly when the top most decisions makers (executives) are incompetent. It hence encourages ‘red tapes’ and bureaucracy because of the concentration of authority in the hands of a single man at all levels that have proved not to work in many instances as noted in the contemporary business environment. II. Staff or Functional Authority Organizational Structure Position or jobs within the organization are either categorized as either line or staff position. The structure encourages grouping of people according to their area of specialization supervised by the functional manager in the area of specialty. It encourages effective utilization of employee skills (Cordes 2013). It blends between the line position as well as staff position wherein the line position provides the direct chain of command responsible for achievement of organizational goals and the staff position that provide expertise, support, and advice for line positions. The structure allows each department to have its department head responsible for the performance of his section as well as ensure that the organization controls sits quality and uniformity performance. The functional manager is responsible for all the authority within their unit and specialization. It shows the different department such as finance, sales, administration and customer care among other besides indicating the president (head) and the deputy if available. The advantages related to functional organization structure include it encourages the realization of the highest degree of performance because employees are grouped according to their knowledge, specialization, and skills that result in efficiency in production. Secondly, it encourages accountability because their roles and responsibility are fixed as well as the hierarchy is very clear and report only to the responsible supervisor of the functional manager. Third, there is no duplication of work, and it reduces the number of communication channel that makes the employees feel secure encouraging greatest performance. Fourthly, it encourages job security that makes employees loyal to the organization that saves organization costs incurred in the recruitment process to fill positions left by leaving employees. It encourages development and growth of teams building within the departments because of the excellent communication and corporation. On the contrary, the disadvantages associated with functional organizational structure include the elimination of the principle of unity of command within the organization where workers may receive instruction for either line or specialist supervisors that might create confusion and conflict at times leading to ineffectiveness. Secondly, the repetitive and monotonous work might become boring to employees resulting in lost enthusiasm for the job. Also, there is poor communication between departments because it encourages self-centered mentalities within the departments that discouraged flexibility and innovation. It also discourages teamwork within departments. Moreover, the function organization structure is rigid making adaptation and executing change difficult because the employees have little knowledge and concern about events outside their departments. Finally, in a larger organization, managing each department becomes difficult and challenging making functional department managed and ran like small companies within the organization that develop its culture, management and facilities style. It might impact the effectiveness and efficiency of the organization where the functional department might focus more on the department goals at the expense of the organizational goal. III. Project Organisational Structure Project organizational structures are designed to achieve specific results by incorporating various skills and talents that cut across all the departments and sections within the firm or business to ensure and enhance successful organization and implementation of the project. It is mostly described as temporary organization design that after execution of the intended project successfully it is disbanded and the team member returns to their initial functional departments. The organizations arrange their activities into programs or portfolios and then implement them through the projects. The set up is managed by the project manager whom everybody in the team reports to about the project. It encourages flexibility and initiatives as they learn from their own as well as others and thus focuses all the resources and energies of the project being implemented. Most organizations give the project managers much power and authority needed to complete the project and accept responsibilities for its outcomes. Some conditions have to exist for project organization structure to be adopted and implemented within the organization and help release the desired goals and outcomes (Lisse 2013). For example, when the work is to be completed by a specific date and time, a unique work that is unfamiliar to the organization, complex work that has independent activities and specialized functions and skills, and also when work in not repetitive in nature among others characteristics. The advantages associated with the project organizational structure includes it provide a clear line of authority since all the team members report to the project manager. It eliminates confusion and conflicts resulting in faster decision making and flexibility in the project management and administration. Secondly, it creates effective communication between and among members of the project team because of a single reporting system. Thirdly, due to the effectiveness of communication that consumes less time, response to the concerned stakeholders of the organization is faster enabling faster deliberations of project requirements and needs. Fourthly, most projects entail a sense of urgency, and therefore they create a good environment in which members learn faster new ideas and skills due to the intense communication and cooperation. Finally, it encourages flexibility and creativity as team members bring their expertise, skills, and knowledge from the functional departments increasing versatility and flexibility among members. The drawbacks that project organizational structure brings include it can lead to arrogant leadership in the project manager when excess power are given to them to manage and administer the implementation of the project to completion that can carte conflict between the project manager and team member in the project (Dai & Meuse 2013). Secondly, most projects have deadline that results in the stressful work environment as member try to meet the deadline set. Thirdly, it might lead to increased costs of production because of purchasing of equipment and other relevant resources required as well as outsourcing expertise (specialized) knowledge in some instances as well as specialized equipment. IV. Matrix Organisational Structure The matrix organization structure is similar to the project organization structure but differs in the status where it permanent, unlike the project organization structure that is temporary. It uses teams of specialists from diverse functional areas in the organization. Some literature describes the matrix organization structure as a blend between e functional organization structure and that of project organizational structure. Analysts note that it is suitable for an organization operating in a dynamic environment because it allows higher and quick market adoption resulting in higher efficiency (Galbraith 2009). The authorities flow both downwards and sideways that result from the functional manager authority that flows downwards while that of project structure flowing sideways. The employees many report to many managers. The advantages of a matrix organization structure include opening up of more communication lines that help to share of valuable knowledge within the organization. Also, high skilled and resources can be shared between the various units and projects implemented by the organization. Secondly, it helps integrate the organization by creating by creating a good work environment that encourages corporation because it allows employees to communicate across boundaries hence described as more dynamic (Chung-Jen 2007). Thirdly, the matrix structure allows employees to broaden their knowledge and learn when they participate in different kind of projects. Finally, it provides a sense of security to employees and hence increases the loyalty of employees to the organization saving on the recruitment and staffing costs that could be incurred when employees leave. The drawback that the matrix organization structure has includes high administration costs. The structure has more managers than required that results in higher overhead costs. It also has a high possibility of creating confusion over authority and responsibility as authorities and order might conflict and come from different directions. It also overemphasizes on group decisions making and focuses excessively on internal relations rather than have a balance and considers the external environments that have proved critical for business organizations. Finally, employees are also overworked as they juggle between completing their regular roles and responsibilities as well as the additional project related work. 6. Conclusion & Recommendations The report has stated the present organization structure dominant in the international firms that operate in the globalized world. The key findings of the report note that many of the organization structure have similarities between them that either result from blending the existing organization structure to come up with a hybrid organization structure or the philosophical perception given to the organization structure. The discussed and presented organization structures show merits and demerits and hence management and administration of international firms have to choose the organization structure that increases the chances of the business succeed in meeting the organizational goals and objectives in the diverse business environment experienced currently. The important of the findings is to help business not only operating at the international level but also local level chose the best organization structure that suits the dynamic business environment realized in many parts of the world that enhance the chances of the business realizing their goals and objectives with ease. The recommendations made include encouraging business to research on the existing organizational structure and the characteristics of the business environment that it plans to venture into before choosing the organization structure to use (Davies & Brown 2014). It encourages efficiency and eliminates wastage of time by reviews and restructuring of business when they realize that certain organization structure cannot work in the given business environment. 7. References Chung-Jen, C 2007, 'Information Technology, Organizational Structure, and New Product Development The Mediating Effect of Cross-Functional Team Interaction', IEEE Transactions On Engineering Management, 54, 4, pp. 687-698, Academic Search Premier, EBSCOhost, viewed 26 December 2016. Cordes, P 2013, Dynamic Capabilities: How Organisational Structures Affect Knowledge Processes, Basingstoke: Palgrave Macmillan. Dai, G, & De Meuse, K 2013, 'Types of Leaders across the Organizational Hierarchy: A Person-Centered Approach', Human Performance, 26, 2, pp. 150-170, Academic Search Premier, EBSCOhost, viewed 26 December 2016. Davies, C, & Brown, G 2014, 'Using design principles to deliver strategy in a new organizational structure', Statistical Journal Of The IAOS, 30, 4, pp. 1-12, Academic Search Premier, EBSCOhost, viewed 26 December 2016. Dudkina, EV 2015, 'EFFECTIVE ORGANISATIONAL STRUCTURE OF THE CORPORATE RISK MANAGEMENT', In the World of Scientific Discoveries / V Mire Nauchnykh Otkrytiy, 65, 5.8, pp. 3048-3066, Academic Search Premier, EBSCOhost, viewed 26 December 2016. Galbraith, JR 2009, Designing Matrix Organizations That Actually Work: How IBM, Procter & Gamble, and Others Design for Success, San Francisco, CA, Jossey-Bass. Lakatos, A 2010, 'Time Management in Institutions – A Managerial Approach –', Philobiblon: Transylvanian Journal Of Multidisciplinary Research In Humanities, 15, pp. 310-325, Academic Search Premier, EBSCOhost, viewed 26 December 2016. Lisse, SD 2013, 'Applying system dynamics for outsourcing services in design-build projects', Journal Of Project, Program & Portfolio Management, 4, 2, pp. 20-36, Academic Search Premier, EBSCOhost, viewed 26 December 2016. Read More