Thursday, 30 April 2015

IMPACT OF ORGANISATIONAL STRUCTURE AND CULTURE ON PROJECT

The type of work processes that an organisation adopts has a significant effect on the growth and success of any endeavor or activities. Based on my work experience and professional engagements; having worked with three different organisations within the past nine years and the difference approach I see in culture and structure with obvious results has necessitated the choice of this subject. In congruent to this, I strongly believe that the Organisational culture results into a belief system which in turn affects the structure and relative output of the firm in terms of best-in-class approach to project management issues with respect to all other concerns affecting the bottom line of the project.

Looking through the definition of Organizational Structure via Wikipedia, (2014), it defined it as the way activities such as tasks allocation, coordination and supervision are directed towards the achievement of organisational aims. By this, we can say that a good structure can positively affect the work process, human capital development and resource management of the firm in order to meet up with its defined goals and objectives. In accordance to this, I share in the view of Torres et al (2007), where they explained that a project organisational structure is a structure that facilitates the coordination and implementation of project activities. They further explained that the main objectives of the structure are to reduce uncertainties and confusion that typically occurs at the project initiation phase. With this in mind, and the thoughts of Handy (2007), who explained how the culture affects the structure of an organisation and vice-versa, it is very clear that a project manager has a lot to do in terms of having a stable culture to have a successful project. In tandem to this, (Handy, 2007), added that culture conveys more of the feeling of a pervasive way of life, or sets of norms. Hence, it is necessary to give utmost importance to the core beliefs of the organisation because it affects virtually everything that concerns the way the systems function in terms of approval process, recruitment, job design, people management, reward systems, appraisal and goal setting. This can be achieved through training, collaboration and improved work processes.

Following this approach, and in order to get a clearer view of this subject, it is pertinent to understand the different types of organisational structure available and their influence or relationship with the project. This idea is in line with Kloosterman (2013), who identified three organisational structures, namely; functional, matrix, and projectized and how it can affect project management decisions. In her explanations she delved on three organisational structures and how a project manager can adopt any for his benefits. They are:


      "Functional Organizational Structure. These firms are organized into functional divisions based on primary functions such as engineering, human resources, finance, IT, planning and policy. Each different functional division operates independently and isolated groups of workers in a division report to a functional manager. The functional manager generally both allocates and monitors the work and carries out tasks such as performance evaluation and setting payment levels. In this model project managers have very limited authority. Functional organisations are set up for ongoing operations rather than projects and so this organisational structure is often found in firms whose primary purpose is to produce standardized goods and services.
      Matrix Organizational Structure. In a matrix organisation control is shared. The project manager shares responsibility for the project with a number of individual functional managers. Shared responsibilities can include assigning priorities and tasks to individual team members. But functional managers still make the final decisions on who will work on projects and are still responsible for administration. Project managers take charge of allocating and organizing the work for the designated project team.
      Projectized Organizational Structure. In a projectized organisation the project manager has full authority over the project. This includes the authority to set priorities, apply resources, and to direct the work of team members assigned to the project. All members of the project team report directly to the project manager and everybody is assigned to a project. After completion of the project, resources will be re-assigned to another project. This type of structure is common in firms that work on sizeable, long-term projects, such as in the construction industry."
      I wish to add that the project manager can take advantage of these types of structure and the role the culture in an organisation paly to meet up with the project objectives and shareholders expectations through well-defined organisational structure. If applied appropriately, it has its attendant advantages; but according to Stare (2011), he stated that unfortunately, many projects do not bring the benefits for which they were implemented. Some of the resultant effects are; cost overruns, increased cycle time, throughputs and reduced quality and all of these cuts short the perceived outputs; this is because they fail to identify the root cause of the aforementioned challenges which are due to ignorance or inexperience.
      Here, am aligning my thoughts to that of Handy (2007), who identified six areas that determine the organisational structure. These are; history and ownership, size, Technology, goals and objectives, the environment and people. I believe this can be used as a road map forming a model that can be utilized to scan every organisation so as to develop the best approach to influence a positive culture for improved expectations. The bottom line of these expectations is increased profit, happy stakeholders/investors and satisfied client or customers as the case may be.


Contributed by: Engr. Olumide Aina (Principal Facility Manager, OE&A) 

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