Strengths and Weaknesses of the Functional Organisation in Cops - Essay Example

Running head: DISCUSSION OF THE STRENGTHS AND WEAKNESSES OF THE FUNCTIONAL ORGANISATION AND THE CROSS-FUNCTIONAL PROJECT-BASED ORGANISATION (PBO) IN COPS? Strengths and Weaknesses of the Functional Organisation University Name Table of Content 1.0 Introduction 3 2.0 What is CoPS? 4 3.0 CoPS and the Functional Organisation 6 3.1 Functional Organisation 6 3.2 The Relation between Cops and the Functional Organisation 6 3.3 Strengths and Weaknesses 7 3.3.1 Strengths 7 3.2 Weaknesses 9 4.0 Cops and the Cross-Functional Project-Based Organisation (PBO) 11 4.1 What Is The Cross-Functional Project-Based Organisation (PBO)? 12 4.3 Strengths and weaknesses 15 4.3.1 Strengths 15 4.3.2 Weaknesses 16 5.0 Conclusion 20 6.0 References 22 Discuss the Strengths and Weaknesses of the Functional Organisation and the Cross-Functional Project-Based Organisation (PBO) in Cops? 1.0 Introduction Project-based organisations and functional matrices have been developed to manage the design, development and implementation of technologies used in the production of complex products and systems. Project-based organisations have a structured way of meeting their companies’ objectives. They are headed by a Project Manager (PM) who oversees the whole processes. They are suitable in situations where CoPS are more than complex in nature and need close monitoring. Unlike project-based organisations, the functional organisations work in diverse format where functional units are developed to meet the demands of every section of the production processes. 1 The first aim of the paper is to elaborate by defining the various aspects of the contents of the paper i.e. it will start by defining CoPSs and their importance to the company. This paper will also dwell on the weaknesses and strengths each form of organisation impacts on the productions of CoPS in the company. Specific emphasis will be the differences in the weaknesses and strengths of project-based organisations and functional organisation structures of the same company. Whether the differences can be rectified or not will be the judgement of the company. The key challenges of project-based organisations (PBOs) with reference to their need in the CoPS manufacturing will also be looked into. The paper will also identify the types and kinds of PBOs and CoPS respectively. This will help in clearly structuring the kind of strengths and weaknesses each will impact on the performance of the company. Most of the sections of the paper are outlined to match the topics with the expected challenges that will be encountered while adopting the specific organisational structures Finally, it will outline the relationships between project-based organisations, the functional organisations and the CoPS in terms of their production and quality assessment. Another aim of this paper will be to outline the features of project-based organisations with relevance to the company. The internal coordination will also be looked into with a view to clearly differentiate the two forms of organisations. It will also define and elaborate cross-functional project-based organisations and their internal organisations2. 2.0 What is CoPS? According to Hobday, Complex Products and Systems (CoPS) are engineering-intensive, high value capital goods. (Hobday, 1998) CoPS are usually made in small batches as a result of their investment project, high costs, composition and physical scale. Contemporarily, all CoPS are taken as capital goods but in the contrary, not all capital goods are CoPS (Acha, 2004). They are considered to be business to business capital goods which unlike consumption goods of high volume, they are themselves used to produce goods and services for producers and consumers. They made be in form of networks, systems, products or constructs which are literally with thin markets mostly by ordering them or making specific designs for specific individuals. CoPS are high value or complex in the fact that, their manufacture involves the assembling lots of customized, interacting components of the system. The sub-systems are also fitted with complex software’s which have design feed back loops to meet the design requirements of the product. This therefore calls for new technological dispensation and high level skills to accomplish the production of such systems. If there is need for small alterations on its subsystems especially during the design stages, the process might lead huge alterations in other parts mainly because of the inter-linkages of the components. More sophisticated design approaches and control systems are therefore put in place during the production and design procedures3. Some CoPS when adopted by the users may need frequent monitoring, maintenance and update from the manufacturers themselves. Examples of such systems are manufacturing systems largely driven by computer integrated technologies, new generation military aircrafts, intelligent buildings and other extremely delicate flight simulators in modern aircrafts. Kinds of Capital Goods Components used in production which may be available in form of finished or partly finished state Equipments, machinery and the plant to be used for production of the products Contracts for production requirements There are various examples of CoPS currently being manufactured in most of the industries; mobile communication systems, flight simulators, aero engines, offshore platforms, automated printing press, high speed trains, commercial aircrafts, millennium Dome, corporate network management etc. There are different dimensions of product complexity New knowledge and skills input System architecture Design choice uncertainty Information and material inputs 3.0 CoPS and the Functional Organisation 3.1 Functional Organisation Functional organisation is a kind of structure based on resource-reorganisation to perform a special task or activity with a view to attaining the organisation’s goals and objectives4. Such project-based organisations support the development of specific projects to boost the business. Functional organisations are hierarchical in nature and that they are organised in a vertical format where departments are set up to meet the objectives of the particular task. Each of the functional departments is headed by a manager-the functional manager-who is responsible for overseeing the implementation of duties at that level. In some organisations, functional organisations are formed to solve issues arising as a result of group specialisations. Such issues include management of people, processes and technology. The people involved in the development of functional organisations are usually trained to integrate management strategies and technological advances. It is therefore a useful tool for managing the production of complex products and systems. 3.2 The Relation between Cops and the Functional Organisation CoPS are increasingly adopting the functional organisational structures because of its ability to bring together all the issues on board for such products. Due to its complexity and extremely high production costs being incurred as a result of developing CoPS, the usefulness of functional organisations cannot be underestimated. CoPS are normally produced under supervision form two groups, one are the functional managers and two the project managers. The functional organisation differentiates the two groups of managers and dedicates the responsibilities of each of them5. In this case, the project managers are considered to be in lower management level from the functional managers. 3.3 Strengths and Weaknesses There are increased adoptions of functional organisations within many companies that manufacture CoPS. Several strengths and weaknesses are also being witnessed as a result of this adoption. 3.3.1 Strengths Technical Expertise The required technical expertise for the unit to be produced is considered to be appropriate for the development of mass units. This kind of expertise is only achieved through thoroughly researched procedures and requirements. There is a strong attachment of the project needs to the solutions to be provided which is thereby provided by the functional organisation structure. It is also obvious that to achieve better results, it is important that a considerable amount of commitment and resource allocation is needed. Interpersonal and inter-group relationships are promoted via the use of functional organisations in the manufacture of CoPS in any company. This is also facilitated by the ability of staff to intermingle with not only each other within the company but also with other players in the industry thereby able to achieve a wealth of experience from fellow experts. They will also be able to bring an enriched knowledge to expand the scope of the technological features of most of the CoPS currently being undertaken by the organisation Administrative Benefits Another important contribution of functional organisation is the ability to harmonise the development of products and the administrative continuity within the organisation. The management of any sector of the company is crucial in the production, design, and implementation of the programs desired to achieve the needs of the clients. In addition, more and more of the clients, contractors, and the ownership of the companies will be able to appreciate proper use of funds in terms of good budgeting. Other administrative benefits that can be achieved in the process can be the elimination of exclusivity of staff in terms of float pooling from experts. This will make it possible for the company to utilise the already available staff for more diverse assignments and projects. Less Duplication of Resources Functional organisations help companies producing CoPS to avoid duplication of resources. By this, I mean that the resources that are allocated for complete developments of particular CoPS are not touched at all even if there will be an acute shortage of the same from other projects. Resource duplication may also come up when the technical coordination of project funding is not adhered to or prepared in advance prior to the development of a new product Process Orientation Functional organisations help companies dealing with CoPS to get their processes done with a discipline approach rather than what used to work best in the past. This will eliminate risk occurrence during the process of operations. All processes are oriented with one objective-to reap maximum profits. 3.2 Weaknesses Business Authority The implementation of functional organisations to CoPS is usually accompanied by better technological skills, knowledge and expertise. However, the business portion of the skills gained may not be useful to the implementation of business strategies. This will mean that, the company will have quality CoPS but a minimal market share. The company requires lots of business tactics to meet the demands of both the clients and the company. Better approaches will therefore be required to substitute the functional organisational structures such as the matrix structures which combine all business and technological approaches. Too Many ‘Bosses’ A combination of the Functional management team, production management, PBO management, technical engineers all the players that are in one way involved in the decision making processes of the company will lead to having many bosses. Taking for example, the young technical engineers may want to have more say in the technical aspects of the CoPS but they are being interfered with by the senior engineers who want to control the processes. This is likely to cause misunderstandings and conflicts in the long run. Every body considers himself or herself the boss in their specific areas of specialisation. This kind of ‘bossy’ structural organisation is not the best for complex production companies which ensures that the products meet designed standards Poor Response Time Longer periods of time will be needed to ensure that decisions are not only Okayed by the various levels of management but also ratified to conform with the organisational legislation. The response time for action will therefore be longer than necessary for the clients and all the parties’ interested ion seeing immediate results. Most companies manufacturing have had to reduce the several layers of functional areas in order to be able to meet targets that have been set by clients. Some CoPSs are also timed to run concurrently with implementation of programs of some customers’ organisation meaning that, they should take the least time as possible. Clients Are Not the Focus Functional areas are acting with a holistic view to meet their own interests such that, the clients with which the CoPS are designed for are forgotten. The customers will hence be playing second fiddle to the different functional areas because of the decreased attention they receive. Although, there is the possibility of customers being able to be directed to a specific area where the category of their issues fall on, there are chances that inconveniences may be encountered in the process. Being told to go there, or meet this persons etc. are the kind of inconveniences that are common form the implementation of the functional organisation. Functional Units May Be Duplicated In an attempt to become self sufficient, functional units may acquire external knowledge outside their area of specialisation leading to duplication of responsibilities of another functional unit. The overlap may result in poor performance and low productivity in addition to increased conflicts between the affected functional units. Tendency to Sub-Optimise Functional areas may tend to sub-optimise with a view to utilise what they don’t know. Usually, in common organisations where functional organisations are applied, the products- CoPSs which are designed to perform specifically extremely delicate operations such as space stations, the functions areas are first harmonised with the functional units of the customer. The client will be able to minimise what they don’t know while maximizing on what they know most without sub-optimising on anything Low Motivation Because of the competition for resources between the functional areas, lines of responsibility are blurred by the respective units. This will automatically result in over-sourcing of one section of the production in expenses of the critical areas. The impact on the staff from such disparities will be great especially the motivational element 4.0 Cops and the Cross-Functional Project-Based Organisation (PBO) Both CoPS and the cross-functional project-based organisation (PBO) work hand in hand to solve the challenges that may come as a result of the complexity and high costs involved in the process. Since the projects are usually large and complicated, the CoPS and the PBOs work to bridge the unique features and solve a few problems that might be experienced. They are specifically used to integrate the sectors of the businesses taking place within the CoPS such as users or buyers, prime contractors or system integrators in the production and delivery processes6. The PBOs are able to coordinate and strategically combine the following; components and software’s, people and experience, finances and sales, equipments and manufacturing firms etc. Figure1. The interrelationship between the parties involved in the coordination of product development Source; Hobday, M. (2007): The Project-Based Organisation (PBO); Managing innovation in Managing innovation in Complex Products and Systems, Economic and Social Research Council 4.1 What Is The Cross-Functional Project-Based Organisation (PBO)? Cross-functional project-based organisations are forms of organisations in which most of the firm’s functions are carried out within the projects. The functions might include; new product financing and development, manufacturing, client relations and engineering. All the functions of the company are based on the strategies of the company to meet organisational production goals, competition and innovation needs (Sapsed, 2007). The dimensions with which a variety of industries adopt project-based organisations are specifically in sectors such as; Ship building and construction Software and IT integration manufacturing Consultancy and legal professions Marketing ion film and advertising sectors Cross functional PBOs are a type of organizations with which the project is the basic primary unit to be used for specific production within the organization7. This kind of organizational structure is used in private enterprise companies mostly, but has been recently used in other organisations in the public domain such government owned institutions such as the military. This organisational structure defines a project as an activity with a defined set of goals and objectives, resources and time limits for a specific task. The PBO coordinates all the sectors of the organisation with a view to integrating all the business functions of the firms (Gann, 1998). The business functions may be; Engineering sections and new product development Financial transactions and marketing Personnel development, learning and training Types of PBOs PBOs are group in terms of their abilities to meet industry requirements and the sector they are involved in. The main PBOs are enterprise in nature where no other forms are present to provide their solutions (Miles, 1986). These forms of PBOs may include film, various channel types etc. Another type of PBOs is the case where projects are mainly given support by various department groups to provide pools for resources. An example in this category is the hi-tech engineering industrial organisations. 4.2 The Relation between Cops and the Cross-Functional Project-Based Organisation (PBO) There is increasing appreciation of the use of PBOs in the current generation of industries and companies not only specialising in CoPS but also in other middle-complex industries8. In fact, industry players are predicting that PBOs will be the wave of the future in the industrial sectors. Little, scientific research is however, available to support such kind of prediction although the current trends in the market suggest otherwise. Various studies have suggested that cross-functional project-based organisations are a natural form of the production process of CoPS. This is usually with reference to producers and suppliers who are now engaging themselves in the various stages of production and innovation (Mintzberg, 1979). If more focus is directed at the production of service or product rather than the company itself, then, new product development field points will be increased. Source; Sapsed, J. (2007): Complex Products and Systems; Managing innovation in Complex Products 4.3 Strengths and weaknesses Users in most instances change their requirements during production leading to increased and unclear goals coupled with unpredictable risks. More and more challenges (weaknesses and strengths) are also being experienced by the companies manufacturing these CoPS and they include; 4.3.1 Strengths There is strong representation from the senior management to the junior staff in terms of increased communication. The clients are in this case able to deal directly with the top most management. This will ensure that, the clients are able to discuss their preferences with the management with a view to analysing how best the two partners can improve services for each other. The project managers are therefore in a position to coordinate issues of resource allocation well in the companies. Clear Authority and Properly Defined Responsibilities The project managers are able to monitor day to day operations within the organisations and take full responsibility of the decision needed to be made at every stage of production9. The project managers are also able to provide regular reports to the persons above him in authority as a matter of obedience to senior managers. No Command Ambiguity There are usually no many bosses who confuse their roles. There is only one boss here and the boss is the project manager. The project manager takes orders from those above him and personally has the authority over all people under him. This will streamline the company’s channels of command and that any mistake being committed may be traced to who is responsible as there are no counter-blames Improved Customer Relations through Better Communications As a result of proper project manager role definitions, there are chances that team communication channels are improved directly influencing the ability to improve client relations. The Functional managers are also able to entrust the sales staff to handle all issue retailing to clients thereby meaning that the sub-contractors and clients can settle out supply disparities with ease. Greater Efficiency By allocating timely resources to the sections, the project managers are able to finance all sections of the product development life-cycle leading to improved efficiencies in terms of product precision, meeting specification challenges and other problem that might be experienced in the process. Increased Motivational Standards More of the project managers and other team players in the production stages are able to obtain high morale, task orientation and increased spirit of commitment. This is attributed to the fact that unlike functional organisations, project–based organisations define the roles each department play for the organisation. Every project manager works therefore with increased confidence to the benefit of the company 4.3.2 Weaknesses Most project managers in the PBO structure are self-centred in nature as they make their own demands for the industries to meet. They also involve in low level of communications especially from a business point of view. The weaknesses experienced while incorporating the functions of project managers and the other management teams include; Little Control over Project Resources Resources must be controlled properly to ensure that delicate sectors receive adequate finances to be able to meet its departmental objectives. On the other hand, the project managers because of their second-hand approach, they are not able to authoritatively convince the management to dedicate more of its resources to the sections they felt it is poorly performing. Most of the final decisions are usually made by the top management and only a little of the decision making process is left to the project managers. This is detrimental to the principle of the relationship between the two levels of management in that they are not abler to come to a compromising position when it comes to harmonisation of finances in the companies, contractors, sub-contractors and clients alike. Role Confusion Different roles for the project managers and the senior management have lead to increased criticism for PBOs as they are emerging to become a source of confusion. The roles for each manager not outlined clearly to meet the objectives of the company. Actually, the team players in all the levels of management feel that, the functional management teams are responsible for responding to issues being raised by the clients. On the other hand, the functional managers feel that the project managers should deal with the same. This kind of confrontation results in poor client-industry communications hence product specification discussions are not properly conducted. As the organisations continue to grow in terms of its market share, the roles are increasingly becoming diverse and that some major projects may have ‘gone astray’ because of negligence. The top management is not getting the necessary support from the junior management levels in terms of regular progress reports. It is not also very clear to the managers how the project based divisions (PBD) are improving the company’s production levels. Some managers feel that, they do not know more about the PBDs and their projects in general, although the projects are important for them. They therefore are confused on how to settle the whole idea or specific roles for all parties involved. Poor Performance Due to increased costs being incurred while implementing the organizational structure, there is evidence of poor performance of the company. Several factors could be attributed to this. First, it is difficult for the management team and the project managers to share ideas and problems freely10. This has lead to interested unfair under or over-sourcing of certain projects. This eventually undermines increased team spirit and team building among the staff involved and specifically the project managers. Due to relative ‘low status and profile’ of the project managers, the functional managers lack the necessary control measures to drive the complex processes of production High Costs of Making Changes Project engineers feel that although they may be having good customer relations, they are not able to technically make changes to product specifications as customers demand it. The cost of doing so is usually passed to the clients making the whole process very expensive beyond reasonable standards. Poor Risk Management The risk management for every CoPS company is usually complicated and requires the cooperation of all partners in the sector. The manufacture, design and building of the products are usually very delicate and the risks involved may cause a lot of damages to both the clients and the project managers. The management is therefore bogged down to explore various risk management approaches to avert any catastrophe at any stage of the production process. In some situations, the senior engineers may not be a position to regularly visit the customers and other suppliers to ensure that risks are not taken lightly and that the solutions to certain risks are elaborated to them. No Provision for Formal Training of Staff Unlike in the past when organisations used to avoid embracing the importance of PBOs, the CoPS companies are now able to become project-based in nature. The companies are not able to provide opportunities for learning to improve service production. The project-based approaches have resulted in technical mentoring, informal communications and post-project review programs. Learning opportunities especially for young engineers are crucial for the improvement of quality services and faster adaptation of new technological advances for the CoPS development Technological Tensions Tensions are running high as functional management teams, the CoPS management team and the project managers are locked in tussles on which technologies should be strictly applied for the products. Although the decision making process is left to the project managers, some form of interference is felt from other management quarters. Adoption of heavyweight matrix structures in expense of functional matrix standards is the source of this tension. The project managers are also critiquing the way functional management teams are conducting preliminary surveys and convincing clients that the heavyweight matrix structures are the new solutions to their problems. These engineers argue that it may lead to the development of poor quality products, translating to increased risks for the finished products. 11 5.0 Conclusion With regard to the research paper and other findings, the weaknesses and the strengths of functional organizations and the project based organizations have been pointed out. From an analytical point of view, the project- based method has the ability to drive the CoPS manufacture and innovation. This can be attributed to the fact that resources are properly directed to the single project in question. It is also important to note that all project responsibilities and authority is vested on the project managers. The other management teams will be responsible for meeting with clients, discussing their needs and focusing on tram building. All the major functions of the project are coordinated by one person and within the jurisdictions of the company. PBOs also offers greater efficiencies, improved motivational standards, little or no responsibility ambiguities, clear channels of authority and better customer relations. On a negative point of view, the PBOs are not clearly defined in terms of specific roles for the sectors in the company. This has therefore lead to little control over multiple projects, poor [performance of the company, high costs, technological tensions and little or no provision of training for staff as the project manager believes that he can handle all challenges single-handedly. On the other hand, functional organisations are not able to cope up with the complex system of CoPS. It also continues to note that, all spectrum of the functional-oriented approach are divided in nature leading to increased competition for resources. The main strengths for this kind of arrangement however, are too many bosses, poor response time, lack of client focus, tendency to sub-optimise, among others. On a positive note, it can be associated with increased administrative benefits, less duplication and attainment of technical expertise in their areas of specialisation and from fellow experts in the same field. Finally, it can be noted that, a company is able to use PBOs as tool for developing its organisational structures. A combination of the two approaches in order to meet the challenges raised above is the best of them all. Companies should move away from pure PBOs to a project-oriented setting where functional managers are dedicated some duties to help the project managers. 6.0 References Acha, V., Davies, A. & Salter, A. (1999): Exploring the capital goods economy; complex product systems in the UK. Industrial and corporate change, vol. 13, No. 3 pp 505-529 Dutrenit, G. (1998): Managing knowledge in a firm in transition, SPRU D. Phil. Thesis, Forthcoming Freeman, C. (1963), the plastics industry: a comparative study of research and innovation. 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