The Impact of Organisational Structure on Project Effectiveness - Coursework Example

Question 4: The Impact of Organisational Structure on Project Effectiveness Name Institution Course Dates The Impact of Organisational Structure on Project Effectiveness Introduction An effective organisational structure is able to help project management team to perform well in project execution (Kerzner, 2003). Every project has some objectives and goals that need to be achieved at the end. These objectives vary depending on the nature of the project. The major objectives are with regard to time, cost and quality. These elements determine the success of a project. Project management is influenced by a number of things. One of the main influences of project effectiveness is organisational structure (Blismas et al., 2004). An organisation with strong leadership, committed employers and shared goals can still fail due to poor organisational structure. An organisational structure often determine the level of project management, leadership in the project work, communication of project goals and project decisions among others. Organisational structure acts as a means to get employees to work towards achieving common objectives and goals. Good organisational structure often offer right blend of control and employee independence in order to enhance the pursuit of companies’ goals and mission (Chan and Tan, 2000). Effective structure promoted integration and coordination and strengthen relationship of employees and tasks. This is able to promote project management work. This essay seeks to explain the effects of organisational structure on project effectiveness. Relationship between Project Management and Organisational Structure Projects are seen as efficient way of introducing innovation. Project management provide companies with the chance to decentralize its activities into projects which minimizes the size of the operations which are run into smaller entities for easy monitoring and control (Dooley, Lupton and O’Sullivan, 2005). Unfortunately, many projects fail to deliver the expected results. A huge number of them exceed the costs and time allocated which reduces their success. Research has suggested many reasons for project failure including inadequate project schedule, lack of adequate resources, poor management and poor definition of objectives among others. All these problems can be minimized with implementation of effective organisational structure (Dooley, Lupton and O’Sullivan, 2005). Changes in the structure of an organisation can enable a company drive successful projects. Organisational structure can be termed as the organisation of individuals and groups in a company and the division and coordination of their tasks. Project management is not an easy task due to its complexities (Chan and Chan, 2004). Effective organisational structure is able to yield high project performance. Effectiveness of a project is characterised by the success in meeting predetermined goals and objectives. The establishment of an effective organisational structure for project management is one of the significant processes for achieving goals (Dooley, Lupton and O’Sullivan, 2005). Therefore, project success is determined by the ability of managers to develop effective strategies in an organisation. Weaknesses in organisational structure result to poor project management irrespective of organisational enablers like strong leadership capacity and employee commitment. According to Hatch and Cunliff (2006), project organisational structures impact project effectiveness from commencement to completion. Characteristics of Effective Organisational Structure According to Brown (2008), for an organisational structure to be effective, it needs to have some characteristics. One important element of an effective organisational structure is flexibility. An organisational structure that supports project management is often amenable to change with situations and circumstances. It often gives allowance and room for individual creativity. In addition, simplicity of organisational structure can lead to project management success (Paul, 2009). A structure that is simple enough to allow employees know what is expected of them is a huge enabler of project management effectiveness. Another characteristic of effective organisational structure is human-oriented. An effective structure should enhance humanism, job fulfilment as well as enhancement. It should be responsive to employees’ needs and expectations. Also, the structure should indicate it is result and accountability oriented. This will increase the chances of project success (Phua and Rowlinson, 2004). Effects of Organisational Structure on Project Management Effectiveness Resources Allocation Organisational structure may hinder the allocation and sharing of resources (Morrison, Brown and Smith, 2008). For example, if a project management team requires an individual with particular expertise and skills, the management can easily share that individual with another service area. Organisations that have structures that do not support resource sharing may suffer during project execution. It may affect the ability of the project management to achieve costs objectives (Dooley, Lupton and O’Sullivan, 2005). Some companies have structure that encourages resource hoarding that does not necessitate financial viability. An organisational structure determines how easy resources are shared within an organisation (Morrison, Brown and Smith, 2008). If a structure does not support resource sharing, it is probably a great idea to choose a different organisational structure in order to support project management. Training and Development The differences in project success rates lie on the fact that some companies are doing a good job in training their project managers (Yazici, 2009). An organisational structure that emphasizes on training and development often leads to higher rates of project management success. Training of project managers makes them more skilled and knowledgeable and tend to handle project management work effectively. The way an organisation deals with training and development is one aspect of the overall organisational structure. Some companies do a poor job of training and developing their managers which affects the success of project work (Yazici, 2009). Organisational structure determines how tight or loose project management is. When establishing the process for project management, the organisational structure determined whether a tight or loose structure is required. A loose structure suggests a less rule-bound process and on the other hand, a tight structure requires a more rule-bound structure. A loose structure works best in small organisations where the project team is able to work closely and successfully. A tight structure is effective in larger organisations with complex projects (Bloisi, 2007). Shareholder’s Influence Organisational structure determines stakeholder’s influence. Stakeholders involved in project execution typically comprises of senior executives. Although clients create the need for a project, it is the stakeholders who drive its success (Turner and Muller, 2004). In case of any disagreements or challenges during project execution, the matter is reported to the stakeholders who decide on the direction to be taken and the outcomes to be achieved. Generally, the project managers and clients may be overruled by the influence the project stakeholders have (Turner and Muller, 2004). In an organisation where the stakeholders are given higher power and influence over projects, the ability of the project managers to make project decision is limited which can affect the effectiveness of project management. Communication in an Organisation In addition, organisational structure affects communication within an organisation and this ultimately determines project management effectiveness. In an organisation that promotes interdepartmental communication, there is open dialogue between the management and employees (Young and Jordan, 2008). This increases the chances of projects to succeed. On the other hand, in organisations where there is vacuum in communication, employees may not know their work progress and performance and this may affect the success of projects. An organisational structure that supports open communication supports project effectiveness and minimizes duplication of efforts (Turner and Muller, 2004). Open and frequent communication ensures that project team works together to accomplish the predetermined goals and objectives. Chain of Command Impacts Into the bargain, organisational structure has chain of command impacts on project management effectiveness. The hierarchy of managers and employees is an important factor in project management (Kotnour, 2000). Although project teams may have a good understanding of what is expected of them, the project manager is highly bound by the chain of command when it comes to making project decisions. Project managers often feel restricted in offering direction to project teams since they often have to go through the management (Eliane, 2008). When the management does not support project execution by not letting project managers perform their work, Projects are bound to fail. A long chain of command often restricts the project manager’s ability to make project decisions. An organisational structure that establishes long chain of command influences project decision making, and leads to project delays (Phua and Rowlison 2004). This influences the ability of projects to accomplish the predetermined goals and objectives. Organisational Structures and their Influence on Project Management Different organisations have established organisational structures that suit their expectations (Turner and Muller, 2004). Each type of structure influences project management effectiveness. One example of organisational structure is functional organisational structure. Firms with this type of structure are organised into functional divisions such as finance, informational technology, production and human resource etc. Each division has a functional manager who allocates the work and monitors progress. Matrix organisational structure emphasizes on shared control (Brown, 2008). The project manager share tasks with different functional managers such as assigning priorities. However, the functional leaders have the final say when it comes to project decisions. Projectised organisational structure gives the project managers full authority over project decisions. They have the power to set priorities, allocate resources and direct project teams (Brown, 2008). In a functional organisational structure, projects that cut across functional divisions face many challenges since project managers have no full control over project decisions. Project decisions are made less swiftly which can result to project delays (Brown, 2008). In the matrix structure, project managers and functional managers determines the outcomes of a project. Nevertheless, the potential for conflict between the two can affect the effectiveness of project management (Brown, 2008). Since the project team has two bosses, it is difficult to promote team building and communication may be impaired. In the projectised organisational structure, the authority is centralized. Since projects are not concentrated on the functional divisions, the chain of command is shorted. As a result project decisions are made swiftly. It is evident that projectised organisational structures make it easier to run projects. From the three types of organisational structure, it is clear that structures of companies influences the efficient execution and running of a project (Brown, 2008). Organisational Structure in McDonalds One company that has established an effective organisational structure is McDonald’s (Martin et al., 2012). McDonald’s has established a strong structure in order to improve its global operations. As the global leader in the fast food industry, it is expected to handle all its global challenges. McDonald’s is very huge with complex structure. It has established a divisional or functional organisational structure. The structure is organised into global hierarchy, performance-based divisions and function-based groups. Even though the company has a project department, not all projects are handled by it (Martin et al., 2012). Project managers have limited power over projects due to the involvement of functional leaders. Due to this, there is often a scramble for resources, poor quality of work and project delays. Martin et al. (2012), illustrates that McDonalds has a huge changes that need to be done in order to minimize its project challenges. Project Cost and Organisational Structure Organisational structure has the ability to impact project cost. The project cost is the condition where project teams complete a project within a stipulated budget. Every project has an estimated cost attached through every stage from inception to completion (Blismas et al., 2004). Completing a project within estimated budget is determined by project management effectiveness. Organisational structure determines how the project managers and general management focus on projects and how they commit to competing them. Organisational structure determines leadership effectiveness. Lack of effective leadership has negative impact on project execution (Blismas et al., 2004). Excess layers of management may result to duplication of roles and responsibilities. Due to the perception that management decision is always right, project teams are thus forced to assume a peripheral responsibility. Owing to this, employees involved in project execution are not motivated to be effective in accomplishing the established goals and objectives. This may be due to the fact that they do not feel as part of the team involved in the project (Blismas et al., 2004). This may lead to project failure. Conclusion In conclusion, every project has some cost, quality and time objectives that need to be achieved at the end. Unfortunately, many projects fail due to factors such as inadequate project schedule, lack of adequate resources, poor management and poor definition of objectives etc. These elements can be minimized with implementation of effective organisational structure. Organisational structure can assist or deter project success. Structure determines how resources are shared, commitment of leaders, length of chain of command, and communication within an organisation. In addition, it determines shareholder’s influence and cost of projects. An organisational structure also influences project decision making, and may determine project success or failure. An organisation with strong organisational structure has high rates of project success. The establishment of a strong organisational structure for project management is one of the significant processes for achieving project goals. References Blismas, N.G., Sher, W.D., Thorpe, A and Baldwin, A. 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