Organisational Structures

1. Project Management
(A6AX 34)
Ourcome1: Organisatioal Structures
Developed from SQA COLEG pack by Alison Gavin
Forth Valley college 2015

2. Changes to organisational structures
As we now realise, there are many types of organisations – they
include businesses, hospitals, schools, local authorities,
multinationals, charities and franchises. Some are in the private
sector and some are in the public sector. All of them have a
purpose and a policy.
The people who manage them may develop different structures
which, to some extent, represent divergences between the goals
and policies of the enterprises concerned.
In a global marketplace things change rapidly, as too must the
organisations that compete in it.

3. In designing an organisational structure, either
initially or through enforced change, the starting
point should be the five central questions
identified by Child (1984).
• Should jobs be broken down into narrow areas of
work and responsibility so as to secure the benefits
of specialisation?
• Should the overall structure of an organisation be
‘tall’ rather than ‘flat’ in terms of the levels of
management and spans of control?

4. • Should jobs and departments be grouped
together in a ‘functional’ way according to the
specialist expertise and interests that they share?
• Is it appropriate to aim for an intensive form of
integration between the different segments of an
organisation, or not?
• What approach should management take
towards maintaining adequate control over the
work done?

5. Hierarchical or flat?
Hierarchy refers to the number of levels to be found in the
organisation. The army, police and civil services have many levels –
they are said to operate ‘tall’ structures. Many large organisations
have similar structures,
It has been claimed that hierarchical structures can lead to ineffectiveness as there
are too many tiers of management.

6. ‘Flat’ organisations have very few levels between the
lowest and highest levels. In Figure 2.4 only one level of
hierarchy operates between the managing director at
the top and the employees at the operational level.
The important difference between tall and flat organisations is the span of control –
the number of subordinates who report to a single manager.

7. Functional structure
This type of organisation structure exists when a specialist is to
give a service which the line manager must accept. The
specialist’s authority will come from a common superior, for
example from a European manager to a UK manager. If the
manager requires some functional assistance to be given to his
subordinates – training for example – then the manager would
have to delegate some authority to the functional specialist

8. The functional structure model is very popular and
can be varied in a number of ways:
• Division by product – the organisation is divided up according
to the product. For example in supermarkets it may be fruit and
vegetables, toiletries, bakery, etc. In a local authority the
organisation may be divided into recycling, housing,
environmental health, etc.
• Division by customer – this could include a sales business
which is divided into wholesale and retail sections to cater for
the particular needs of each sector.
• Division by process or equipment – a printing firm, for
example, may use this sort of division in order to keep all its
printing functions in the one area; for example a screen printing
department for T-shirts and a printing card department for
business cards.

9. A popular way of representing functional lines is
illustrated below

10. Geographical structure
As a firm grows, it sometimes needs to set up branches
in other locations

11. Matrix structure
Sometimes an organisation needs to run according to
what projects they have to accomplish. In these situations
people usually work together in a team to achieve their
own project goals.

12. Matrix Structure
A person working in a project would have two bosses
A project may cover some or all of the organisation’s department
areas.
Obviously these are very different commissions so the organisation
would have to set itself up to complete both projects.
It could set up two project groups, both of which would utilise
resources from all of the different departments within the
organisation.

13. The End