Case study :Functional organizational structure on project management

 

Organizational arrangement depends on the result to be industrial as Wheelwright and Clark define scale executive structure among two boundaries; functional organizations are planned according to industrial regulation. Higher functional manager is responsible for apportioning assets. The accountability for entire creation is not owed to a solitary human being. Harmonizations occur all the way through system and events, thorough stipulation, shared customs between engineers and meeting. Thus, light-weighted matrix association remain functional and height of occupation is analogous to that establish in the practical mode. The position and influence puts value to the functional managers, since they have direct right of entry to functioning level community. The project members depart their functional subdivision and dedicate full time to the development, “share the same location. The professionals are less specialized and have brioader tasks, skills and responsibilities. The functional manager is responsible for the personnel development and the more detailed technology research in the functional groups”. Several companies can be classified into organization structures. For example, NASA developed a matrix management system for its space program because it needed to simultaneously emphasize several different functions and projects, none of which could be stressed at the expense of another. It found that traditional management structures were too practical, hierarchical, slow poignant, and inflexible. NASA’s matrix solution overcame problems by synthesize projects, such as scheming rocket booster, with executive function, like staffing and finance. Most structure departmentalize, employment and other resource. Functional organizations are segmented by key functions. For example, activities related to production, marketing, and finance might be grouped into three respective divisions. Within each division, moreover, activities would be departmentalized into subdepartments. The marketing for example, might include sales, publicity, and support departments. The chief benefit of functionally structured organization is that there typically realize reasonably capable occupation of labor and are moderately easy for employees to understand.

Bayer AG of Germany, one of the largest and oldest chemical and health care products companies in the world. Because of massive sales gains and increased activity overseas in the early 1980s, Bayer announced reorganization in 1984. Bayer had been successful with a conventional organizational structure that was departmentalized by function. However, in response to new conditions the company wanted to create a structure that would allow it to achieve three primary goals shift management control from the then West German parent company to its foreign divisions and subsidiaries; restructure its business divisions to more clearly define their duties; flatten the organization, or empower lower level managers to assume more responsibility, so that top executives would have more time to plan strategy (Burton and Obel, 1998; Knight, 1977). Bayer selected a relatively diverse matrix management format to pursue its goals. It delineated all of its business activities into six groups under an umbrella company called Bayer World. Within each of the six groups were several subgroups made up of product categories such as dyestuffs, fibers, or chemicals. Likewise, each of its administrative and service functions were regrouped under Bayer World into one of several functions, such as human resources, marketing, plant administration, or finance. Furthermore, top managers who had formally headed functional groups were given authority over separate geographic regions, which, like the product groups, were supported by and entwined with the functional groups. The net effect of the reorganization was that the original nine functional departments were broken down into 19 multidisciplinary, interconnected business groups. Bayer management lauded the new matrix structure as a resounding success (Kramer, 1994; Nissan, 1995). The functional areas will have personnel with varied skills, but those skills are grouped on their similarities. The people who have identical skills can be grouped easily and they can be placed in separate units and a aforesaid organizational structure is formed. The ultimate controlling authority coordinates with all levels which are commonly called the top management. When an organization handles a solitary product, the aforementioned functional organizational structure is most suited and most frequently used. In such as model, the purchasing function concentrates on purchase activities. Human Resources personnel handle the hiring, training, and firing activities. The accounting department takes care of financial activities. Manufacturing focuses on rolling out the finished product. The sales team takes the role of promoting the finished product in the marketplace. Marketing activities market the product with a long range goal of staying competitive in the market.  The organizational structure with functional focus tries to allocate the available people according to their roles, forming what is referred to as a functional department. Each department usually has a department head with the title of department manager, or something similar. At times, these department heads may be given a title of Director, if the board gives their function such a representation (Robbins, 1983; Chi and Nystrom, 1998).

 

References

Burton, Richard M., and B0rge Obel. Strategic Organizational Diagnosis and Design. 2nd ed. Boston: Kluwer Academic Publishers, 1998.

Knight, Kenneth, ed. Matrix Management: A Cross-Functional Approach to Organization. New York: PBI-Petrocelli Books, 1977.

Kramer, Robert J. Organizing for Global Competitiveness: The Matrix Design. New York: Conference Board, 1994.

Nissan, David. “A Regional Slice of the Global Pie.” Financial Times, 14 August 1995.

Robbins, Stephen P. Organization Theory: The Structure and Design of Organizations. Englewood Cliffs, NJ: Prentice Hall, 1983.

Tailan Chi, and Paul Nystrom. “An Economic Analysis of Matrix Structure, Using Multinational Corporations as an Illustration.” Managerial & Decision Economics, May 1998.

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