8A

Project Organization: Part 1

Organigrams and matrix structures

Copyright

2007 Dennis Lock and his licensors. All rights reserved.

Understanding
organigrams

This presentation begins with an explanation

of common organigram conventions.
Organization charts (organigrams) communicate
the structure and functions of an organization.
However, although organigrams are important
management tools, they are rarely perfect.
No chart can show all the informal relationships,
power struggles and intrigues that often exist in
organizations.

Highest
power

Highest
status

Managing
director

Notes

Each box represents a job in the organization.

Job titles must be shown.

Manager
Manager
B are usually
Manager
C
Names
of the A
individual
jobholders
included.

Some people will think they are more important and should
have been shown at a higher level.

Some
companies try to
avoid that problem by adding a
Department
Department
Department
note Levels do not indicate status. . .

B
staff

B
staff

. . . but no one will ever believe that.

C
staff

The people most likely to feel overlooked and undervalued

Lowestare those not shown in the organigram at all!
Lowest
power

status

Organigram conventions: 1

Managing
director

Manager A

Manager B

Manager C

Department
B
staff

Department
B
staff

Department
C
staff

Lines of command and feedback

Lines of communication

Organigram conventions: 2

Managing
director

Notes on staff jobs

Manager A

Manager B

A staff (non-line)
Secretary job

Manager C

A staff job is outside the line structure and usually

owns no authority and cannot issue commands.

But many professional staff jobs command respect and

Department
Department
Department
have
high status (for example
a company
solicitor)

C
Some people, such as this secretary, enjoy power
and
statusstaff
reflected from theirstaff
superiors (Do asstaff
I ask, or
my boss will come down on you like a ton of bricks).

Organigram conventions: 3

Function

Marketing

Line

Engineering

General
management

Quality

Materials

Production

Admin and
finance

A traditional manufacturing organization

(a line and function organization)

Managing
director

Marketing
director

Engineering
director

Works
director

Quality
manager

HR
manager

Materials
manager

Production
manager

Staff
department

IT
manager

This vertical line and

function organization is
fine for routine
manufacturing

Export
sales
manager

Home
sales
manager

Product
designers

Export
sales
staff

Home
sales
staff

Drawing
office

Buyers and
expediters

Production
engineers

Goods
inwards

Production
control

Stores and
dispatch

Systems
group

Financial
director

Cost
Management
accounts
accounts

Factory
supervisors

Factory
workers

A line and function organization for routine manufacturing

Managing
director

Engineering
director

Marketing
director

Export
sales
manager

Export
sales
staff

Works
director

Quality
manager

HR
manager

IT
manager

Financial
director

But when this company

gets its first big project . . .
Home
sales
manager

Product
designers

Home
sales
staff

Drawing
office

Buyers and
expediters

Materials
manager

Production
manager

Production
engineers

Goods
inwards

Staff
department

Production
control

Stores and
dispatch

Systems
group

Cost
Management
accounts
accounts

Factory
supervisors

Factory
workers

A line and function organization for routine manufacturing

Managing
director

Engineering
director

Marketing
director

Export
sales
manager

Home
sales
manager

Product
designers

Export
sales
staff

Home
sales
staff

Drawing
office

Works
director

Quality
manager

HR
manager

First big

IT
manager

project

Buyers and
expediters

Materials
manager

Production
manager

Production
engineers

Goods
inwards

Staff
department

Production
control

Stores and
dispatch

Systems
group

Financial
director

Cost
Management
accounts
accounts

Factory
supervisors

Factory
workers

A line and function organization for routine manufacturing

Managing
director

Marketing
director

Engineering
director

Works
director

Quality
manager

HR
manager

IT
manager

Financial
director

Theres no one to follow the

project horizontally through
the organization

Export
Home
sales
sales
manager
manager

Export
sales
staff

Product
designers

Home
sales
staff

Materials
manager

Drawing
office

Buyers and
expediters

Production
manager

Production
engineers

Goods
inwards

Staff
department

Production
control

Stores and
dispatch

Systems
group

Cost
Management
accounts
accounts

Factory
supervisors

Factory
workers

A line and function organization for routine manufacturing

Managing
director

Engineering
director

Marketing
director

Export
sales
manager

Home
sales
manager

Export
sales
staff

Home
sales
staff

Works
director

Quality
manager

HR
manager

IT
manager

Which is where the

Product
designers

Materials
manager

Production
manager

Staff
department

Systems
group

project manager
Drawing
office

Buyers and
expediters

comes in
Production
engineers

Goods
inwards

Production
control

Stores and
dispatch

Financial
director

Cost
Management
accounts
accounts

Factory
supervisors

Factory
workers

A line and function organization for routine manufacturing

Managing
director

Project
manager

Marketing
director

Engineering
director

Export
sales
manager

Home
sales
manager

Product
designers

Export
sales
staff

Home
sales
staff

Drawing
office

Buyers and
expediters

Works
director

Materials
manager

Quality
manager

Production
manager

Production
engineers

Goods
inwards

HR
manager

Staff
department

Production
control

Stores and
dispatch

IT
manager

Systems
group

Financial
director

Cost
Management
accounts
accounts

Factory
supervisors

Factory
workers

This has now become a

A line and function organization for routine manufacturing

functional matrix organization for a single project
(also known as a coordination matrix)

Managing
director

Project
manager

Marketing
director

Notes

Engineering
director

Works
director

Quality
manager

IT
manager

HR
manager

Financial
director

This project manager is in a staff position

Export
sales
manager

Home
sales
manager

Product

Materials

Production

Staff
Systems
Cost
He or she
can
plan,
issue
schedules,
follow
progress,
designers
manager
manager
department
group
accounts
advise and report but cannot issue direct commands

Export
sales
staff

Homeis therefore
This
a project
coordinator
Drawing
Production
Production
sales
office
engineers
(not really a project manager)control
staff

Factory
supervisors

He or she achieves results through persuasion or by

and
Goods
Stores and
Factory
callingBuyers
down
power
from
a
senior
line
manager.
expediters
inwards
dispatch
workers

Management
accounts

The next organization structure

shown is a matrix organization that
might suit a company which
regularly handles several projects
at the same time.

Company management
Administrative departments

Projects
director

Functional departments that work on projects

Department
manager 1

Department
manager 2

Department
manager 3

Department
manager 4

Department
manager 5

Project
manager A
Project
manager B
Project
manager C
Project
manager D

Principle of a matrix organization for several projects

Some advantages of a matrix organization:

The organization tends to remain stable it stays the
same even though projects come and go
That stability can give staff a feeling of security
Each person can see a possible path to promotion
within his or her department
Staff are assessed on their performance by a
manager who is in the same specialist function and
who understands the technical issues

More advantages of a matrix organization:

Specialist skills are pooled, and can be allocated to
different projects on a day-by-day basis. That means
these resources are used most efficiently.
Placing specialist skills in permanent groups or
departments concentrates expertise under a leader
of the same specialism.
Knowledge relevant to each special function will
build with time within each department.
All these factors should benefit design quality and
reliability.

Some disadvantages of a matrix organization:

People tend to be loyal to their own group and not to
the project
Face-to-face communications tend to be slow
because they have to cross group boundaries
There can be conflict and power wars between
project managers and the functional managers
The next picture illustrates that each group member
has to serve two managers . . .
. . . which violates the principle of

UNITY OF COMMAND

Dennis Lock tells his own true story:

Company management

Long ago I was an engineer in a matrix organization . . .

. . . just like the one shown here
...

Projects
director
but
I wore

Managers of functional departments

a smarter suit than this chap.

Department
manager 1

Department
manager 2

Department
manager 3

That matrix was not a happy place to be.

Department
manager 4

Department
manager 5

My department manager was divorced from my project

Project
managers
manager Asister. They were not good friends.
Plenty
of scope for conflict there.
Project
manager B

Unity of command was certainly screwed up.

Project

So manager
my six Cmonths employment with that company comprised
three months finding out and three more finding my next
job.Project
manager D

Violating the principle of unity of command

Matrix organizations
with different strengths

Strength in this context means the

way in which power is shared
between the project manager and the
departmental (functional) managers

In a stronger matrix, the project

manager has more power than
the departmental managers.

In a weak matrix, the

departmental managers are
given greater power than the
project manager.

In a balanced matrix, the

departmental managers and the
project manager have equal
power and are expected to
agree by cooperation.

The usual organigram for a

matrix organization cannot
show these power differences,
although one bright spark came
up with the following idea to
indicate a balanced matrix . . .

Company
management
t s
c
e er
j
ro ag
P n
a
m

D
e
m pa
an r
agtm
er e n
s t

One way of showing a perfectly balanced

matrix
(not recommended!)

Summary of different matrix strengths:

1. Weak matrix: the project manager is a coordinator.
2. Balanced matrix: power is shared equally between
the project manager and the functional managers.
3. Strong matrix: the project manager is given more
power than the functional managers.
4. Secondment matrix: project managers have so
much power that they can take over nominated
members of staff from the functional groups for the
duration of their projects.

Final words of advice on matrix organizations:

1. Senior management must issue clear instructions
on how power is to be shared between the project
managers and the functional managers.
2. Project managers, even in the strongest matrix,
should not be allowed to overrule specialist
functional managers on technical design issues.
3. Senior management must be prepared to step in
to resolve disputes between project and
functional managers.

End of Presentation 8A
Presentation 8B will continue the
subject of project organization by
describing teams, task forces and
the project manager as a person.