Organization

Introduction to Organizing
  • One of the critical functions of management is the ability to organize the people who do the work and the tasks to be accomplished.  This involves determining
    • Who will do what (specialization)?
    • Who reports to whom (authority relationship)?
    • How will activities and people be related (grouping)?
    • How will superior-subordinate relationships be defined through task assignments and authority delegation (formal communication and reporting relationships)?
  • Four steps facilitate the organization process
    • The objectives (what) should be determined before the structure (how).  The manager interprets the broader corporate objectives into specific objectives for his/her department or unit.  Objectives may be to support existing product lines, develop certain technologies, or accomplish projects.  Organization can be done around product lines and functional areas (such as requirements, design, and implementation), but probably not around projects as we will see below.
    • Determine the activities and tasks that will accomplish each of the objectives effectively.
    • Group the activities and tasks into logical groups.  Assign work units to the groups that can be performed by people.  Small work groups should have activities that are similar and can be incorporated into larger work groups.  In this way, the structural hierarchy of the organization begins to shape up.
    • For each group, assign authority and responsibility to someone.  This person is responsible for ensuring the group work gets done.  An authority-responsibility network should be established among the responsible people so that friction is minimized while coordination and cooperation are enhanced.
  • Although many different organizations may work, it is desirable to have the one that is efficient and effective to reduce the frustration levels of those in the organization.  The organization should help to make everyone's responsibilities and reporting relationships clear as well as the management planning and controlling functions much easier.  The organization must be flexible in order to change when necessary and appropriate to improve the way things are done and to respond to new organizational objectives.
  • It is useful to draw up an organizational chart on one page so that everyone can have it for reference.  The chart should show the formal structure and administrative layers, major reporting relationships, flow of work, areas of responsibility, basic relationships among departments, and levels of authority.  The chart does not necessarily show how the organization actually works, the degree of authority and responsibility of each position, and the informal lines of communication.
  • Even though the process of organizing creates static, formal relationships, dynamic and informal relationships result as a part of the formal organizing process.  The informal organization emerges as a consequence of a voluntary and unplanned network of relationships through informal leadership and communication channels, small-group interactions, cliques, friendships, gossiping, water cooler discussions, and grapevines.
Example Organization Charts
  • From http://www.usdoj.gov/dojorg.htm (February 23, 2004) - This is the Department of Justice organization chart.  Just from looking at the chart and having no other information, it would seem that the Solicitor General and the Associate Attorney General have unequal responsibilities.  The rightmost 2 lines under the Deputy Attorney General directly report to the Deputy Attorney General which seems to be again, quite a bit of responsibility that needs to be split up.
  • From http://www.nwrel.org/comm/orgchart.html (February 23, 2004) - This is the NW Regional Educational Laboratory organization chart.  Without any additional information, this chart seems to reasonably organized by centers and offices devoted to company operation.  Each center and office is headed by a director with supporting functions under each.  Each position has a name associated with it making it easy to see who is responsible for what.
  • From http://www.fcc.gov/fccorgchart.html (February 23, 2004) - This is the FCC organization chart.  Without any additional information, this chart is organized by office and bureau units.  Additional divisions, offices, and staff are listed under each unit.  Interestingly, this chart is only two levels deep and headed by a committee of commissioners.
  • From http://ifmp.nasa.gov/bfdocs/bf_project_org_042203.pdf (February 23, 2004) - This is a NASA project organization chart showing the people and responsibilities of each person on the project.  Each unit has a head(s) and answers to project management.
Guiding Organizational Principles
  • Authority and Power Principles
    • Authority and responsibility should flow smoothly down the hierarchy from the highest to the lowest level in the organization.  They should be delegated to the individuals doing the jobs.  Accountability for getting the job done, on the other hand, flows upward.
    • Subordinates should only report to one boss to reduce confusion and diffusion of responsibility.  Although the boss may have authority and power over the subordinate, influence is due to how the subordinate perceives the manager.
  • Division of Labor and Specialization Principles
    • Objectives must be clearly defined to give the organization a sense of direction, guide performance, and facilitate management.
    • Organizations are dependent on specialized tasks and expert skills to get their work done.  Specialization flows down the hierarchy while generalization flows up the hierarchy. 
    • Some managers may be able to handle a large number of people reporting to them while others can barely manage a few people.
    • Decentralized organizations give more power to managers to make decisions while centralized structures make decisions at the highest possible level.  Reasons to decentralize decision making may include very competent managers, ability to make quicker decisions, allowing those to make decisions most familiar with the situation, and encouraging managers to take initiative.  Disadvantages include unintended overlapping of responsibilities, diffused decision making, loss of control, conflict, and short-term decision making rather than long-term.
    • Delegating allows subordinates to grow in their skills, enhances communication with subordinates, and allows subordinates to participate in decision making.  Delegation involves
      • Assigning responsibility
        • Determining the subordinate's activities and tasks
        • Specifying the results the subordinate is responsible for achieving
        • Coming to an agreement with the subordinate on how performance will be measured
      • Delegating authority
        • Authority must be delegated to the subordinate to perform his/her duties, such as getting signatures and assigning personnel work.
      • Creating accountability
        • A subordinate is held accountable to his/her superior for the satisfactory performance of his/her duties.
    • Line-Staff Relationships
      • Line authority entitles the superior to direct the work of his/her subordinates.
      • Staff authority does not bear direct responsibility for achieving the organization's objectives.
        • Personal staff assist line authority managers.
        • Specialized staff provide specialized services, advice, and functions to the line authority managers.
        • Friction between line authority and staff positions can occur if job responsibilities are not made clear to both.
  • Coordination and Communication Principles
    • Formal Structure or Hierarchy - Provides the most basic means of organizational coordination as well as checks and balances.
    • Policies and Procedures - Policies are sets of guidelines developed by upper-level management to assist lower-level management in handling anticipated problems while procedures are prescribed, specific behaviors to follow in certain situations.  Enough policies and procedures should be in place to facilitate the organization's workings without creating too much "red tape".
    • Informal Communications - Informal communication may be an excellent way to get things done faster, but should be mitigated in case important information does not get communicated via the formal channels.
    • Committees and Task Forces - Committees can help decisions to be made by using several rather than just one individual.  Done well, they can enhance communication and cooperation but, done poorly, they can waste time and money.  Task forces are temporary committees set up to accomplish a specific task and are focused on the mission and action.
Project Management Organization
  • While the formal organization may be organized into a hierarchy as described above, projects are usually done across organizational/functional units.  Projects are somewhat like task forces in that many resources are brought together to accomplish the project, those resources are obtained and released as project work is accomplished, and the project is dissolved once completed.  No one functional unit would be a good fit for running a project although many of the functional units would help in the project.  The reason a functional unit would probably not run a project well is that the functional unit would focus mainly upon its function, such as production, rather than upon the other functions required to complete the project.  In addition, difficult problems would have to be passed up the hierarchy to be solved which would delay the project.  In order to accomplish projects, therefore, an additional organization is needed to the formal organization, specifically, the project organization which can cut across departments or functional areas, coordinate a large number of separate functions, tackle complex projects, and exist only as long as the project exists.
  • The individual over the project organization is the project manager who may have varying levels of authority.  For example, the project manager may interface with the functional departments that do the project work, but no one reports directly to him/her except clerical support.  Still, the project manager is responsible for the overall management and integration of the project.  In another situation, the project manager may still interface with the functional units for project work, but has control over the scheduling and budgeting.  In addition, the project manager may have limited authority for a period of time and then have more scheduling and budgeting control at other times.
  • Because the project manager may have limited authority, s/he must have flexibility, adaptability, and persuasiveness.  S/he must be able to function in an ambiguous environment with ill-defined organizational relationships, communicate well, and manage conflict that will inevitably occur with the functional units over budget and schedule.  S/he must see that the project is completed as close to schedule and budget as possible, to ensure that required decisions are made to meet project objectives, to recommend project termination if objectives or contractual obligations cannot be met, to be the contact for the client and upper-level management and functional managers, and to negotiate work orders or contracts with the functional units within time and cost constraints.
  • It helps if the project manager reports to a high-level manager and has the backing of high-level management.  In addition, s/he needs to be able to provide direction over project tasks, scheduling, and budget while the functional manager should direct those performing the tasks, determine how the work is accomplished, and find out how much money is needed for the work.
  • Although it may seem to be a simplistic view after describing the complex nature of project management, a project succeeds or fails based upon the project manager's performance.  If the project manager is a poor manager, draws up unrealistic schedules and budgets, and does not monitor progress, the project is likely to flounder or fail.  If the project manager takes the necessary time up front to plan with the entire team, moves into action from planning when appropriate, and uses his/her power to see the project through to completion, the project will likely succeed.
    • What about the people doing the work for the project manager - don't they count in all of this?  Yes they do, but if they are not performing, then the project manager must be proactive enough to get other people who can do the work or terminate the project.
Alternative Organizations
  • With the formal hierarchical organization, technologies in various functional areas are developed, but the project organization suffers due to the split of functional departments developing technologies and doing projects.  Of course, if the project organization dominates, then projects do well, but technology development suffers.  In order to facilitate both project and technology development, some firms use matrix management or a variation of it.
  • In a matrix organization, project and functional managers share people and facilities.  Project managers negotiate with functional managers for enough people to do the project work and these people are temporarily assigned to the project manager.  Once the project completes, they return to their department.  For a while, they must answer to the project manager, but they must always answer to their functional manager who is responsible for the development of their functional area and career.
  • The matrix organization works quite well with people who can function in a flatter organizational structure with more than one manager.  It encourages creativity when people from various functional areas are brought together to work on a project and more complex projects can be done.  It can, however, be quite unnerving to people who need a well-defined hierarchy and job in order to function well in an organization.
Summarizing Thoughts
  • Organization is critical to ensure that important functions and objectives are implemented with responsible parties and enough resources.
  • Organization should enhance communication and decision making ability.
  • The project organization is a temporary entity, but is recurring.  It may not have the authority and power of permanent units, but can be given more prominence through the use of the matrix organization.
Review
  • How is organizing accomplished?
  • What are the principles that should be followed when organizing?
  • Where does the project organization fit into the overall organizational structure?
  • How does the matrix organization operate?

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Last edited:  03/31/04 02:37:01 PM