Table Advantages Of The Product Organizational Form

• Provides complete line authority over the project (i.e., strong control through a single project authority).

• Participants work directly for the project manager. Unprofitable product lines are easily identified and can be eliminated.

• Strong communications channels.

• Staffs can maintain expertise on a given project without sharing key personnel.

• Very rapid reaction time is provided.

• Personnel demonstrate loyalty to the project; better morale with product identification.

• A focal point develops for out-of-company customer relations.

• Flexibility in determining time (schedule), cost, and performance trade-offs.

• Interface management becomes easier as unit size is decreased.

• Upper-level management maintains more free time for executive decision-making.

people become uneasy and often strive to prove their worth to the company by over-achieving, a condition that is only temporary. It is very difficult for management to convince key functional personnel that they do, in fact, have career opportunities in this type of organization.

In pure functional (traditional) structures, technologies are well developed, but project schedules often fall behind. In the pure project structure, the fast reaction time keeps activities on schedule, but technology suffers because without strong functional groups, which maintain interactive technical communication, the company's outlook for meeting the competition may be severely hampered. The engineering department for one project might not communicate with its counterpart on other projects, resulting in duplication of efforts.

The last major disadvantage of this organizational form lies in the control of facilities and equipment. The most frequent conflict occurs when two projects require use of the same piece of equipment or facilities at the same time. Upper-level management must then assign priorities to these projects. This is normally accomplished by defining certain projects as strategic, tactical, or operational—the same definitions usually given to plans.

Tables 3-3 and 3-4 summarize the advantages and disadvantages of this organizational form.

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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