Information system

Ongoing Capital Equipment Projects

Interim Capital Equipment Projects

Facilities Development

Ongoing Business

FIGURE 3-13. Matrix development in manufacturing.

Project management is a means of integrating all company efforts, especially research and development, by selecting an appropriate organizational form. Two questions arise when we think of designing the organization to facilitate the work of the integrators22:

• Is it better to establish a formal integration department, or simply to set up integrating positions independent of one another?

• If individual integrating positions are set up, how should they be related to the larger structure?

Informal integration works best if, and only if, effective collaboration can be achieved between conflicting units. Without any clearly defined authority, the role of the integrator is simply to act as an exchange medium across the interface of two functional units. As the size of the organization increases, formal integration positions must exist, especially in situations where intense conflict can occur (e.g., research and development).

Not all organizations need a pure matrix structure to achieve this integration. Many problems can be solved simply through the chain of command, depending on the size of the organization and the nature of the project. The organization needed to achieve project control can vary in size from one person to several thousand people. The organizational structure needed for effective project control is governed by the desires of top management and project circumstances.

Unfortunately, integration and specialization appear to be diametrically opposed. As described by Davis23:

When organization is considered synonymous with structure, the dual needs of specialization and coordination are seen as inversely related, as opposite ends of a single variable, as the horns of a dilemma. Most managers speak of this dilemma in terms of the centralization-decentralization variable. Formulated in this manner, greater specialization leads to more difficulty in coordinating the differentiated units. This is why the (de)centraliza-tion pendulum is always swinging, and no ideal point can be found at which it can come to rest.

The division of labor in a hierarchical pyramid means that specialization must be defined either by function, by product, or by area. Firms must select one of these dimensions as primary and then subdivide the other two into subordinate units further down the pyramid. The appropriate choice for primary, secondary and tertiary dimensions is based largely upon the strategic needs of the enterprise.

Top management must decide on the authority structure that will control the integration mechanism. The authority structure can range from pure functional authority (traditional management), to product authority (product management), and finally to dual authority (matrix management). This range is shown in Figure 3-14. From a management

22. William P. Killian, "Project Management—Future Organizational Concepts," Marquette Business Review, Vol. 2, 1971, pp. 90-107.

23. Reprinted from Stanley M. Davis, "Two Models of Organization: Unity of Command versus Balance of Power," MIT Sloan Management Review, Fall 1974, p. 30 by permission of the publisher. Copyright © 1974 by Massachusetts Institute of Technology. All rights reserved.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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