MODULE 5

ORGANIZATIONAL PRESSURES AND

STRUCTURES
MGMT 6054 PROJECT STRATEGIC MANAGEMENT
MODULE AGENDA

 What is an organization?
 Organizational pressures
 Organizational structures
 Homework/evaluations
 WHAT IS AN ORGANIZATION?

Organization: a grouping of people, assets, materials and knowledge

that are coordinated to meet a set of objectives (or serve a purpose).
ORGANIZATIONAL PRESSURES

 Competition (consider competition with a smaller firm)

 Cost pressures (consider increase in minimum wage)
 Growth (consider share value)
 Evolving technology and unpredictability of consumer demands
(consider green demands)
 Relevancy of products or services (consider a fountain pen)
 Availability of resources
 Globalization (consider competition with lower labour costs)
 COVID 19!
FAILURE RATES

57% fail within 10

years
(2018 Canada data)
ORGANIZATIONAL PRESSURES
ILLUSTRATED BY AN S-CURVE

Organizations and products may follow the S-curve model

Examples of
organizations or
products that
declined/failed?

Organizational pressures from the start

 ORGANIZATIONS THAT HAVE EFFECTIVELY
EVOLVED – HOW DID THEY DO IT?

Successful
How? Strategy?
Renewal/Evolution
Example: Netflix Changed quickly to adjust to technology and customer wants:
mail-order DVDs in late 90s to streaming to producing their own
content now. $160B company!

Also relates to change

management….coming up
in a later module.
COMPETITIVE ADVANTAGE

 An advantage that a firm has over its competitors, allowing it to

generate greater wealth and retain customers.
 The source of competitive advantage can be the firm’s cost
structure, intellectual property, product offerings, distribution
network, customer support, or other factors.
 Other examples?
https://simplicable.com/new/competitive-advantage-examples
 BUSINESS SUSTAINABILITY
– THE TRIPLE BOTTOM LINE

Primer – Business Sustainability – click here.

Project – Industry Sustainability – let’s go to
FOL to review requirements
LIN

Switching Gears
Organizational Pressures to….
…..Organizational Structures
 ORGANIZATIONAL STRUCTURE

 Division of labour, and patterns of Organizational structure is

coordination, communication, dictated by:
workflow, and formal power that direct  type of business
organizational activities  business model
 More than just an organizational chart  technology (fast, agile)
 Relates to job design, team dynamics,  rate of change
power relationships, etc.  complexity
 competition
 etc.
ORGANIZATIONAL STRUCTURE RELATED TO
PROJECT DELIVERY

Three main organizational structures related to project delivery:

1. Functional/traditional/classical
2. Projectized
3. Matrix
 1. FUNCTIONAL/TRADITIONAL/CLASSICAL
Characteristics:
 Absolute control
 Direct lines of reports (each employee has clearly identified manager/supervisor)
 Grouped by specialty (e.g., production, marketing)
 Each department performs its own project management

“Silos”
1. FUNCTIONAL/TRADITIONAL/CLASSICAL

Project is managed with the existing functional hierarchy.

1. FUNCTIONAL/TRADITIONAL/CLASSICAL
Advantages
• Cost control
• Technical control
• Control over personnel
• Vertical well-established
communications channels
Disadvantages
• No one individual controls
total project (no formal
authority); difficult to pinpoint
who is actually responsible
• Not project-oriented (high rate
of failure)
• Complex coordination between
functional groups
• Not customer focused
• Ideas tend to be in functional
channels
2. PROJECTIZED STRUCTURE
Characteristics:
 The project manager has authority
 Team members are often co-located
 Project team reports to the project manager
2. PROJECTIZED STRUCTURE
 2. PROJECTIZED STRUCTURE
Advantages
• Control (the project manager has
authority)
• Strong communications channels
• Dedicated to a project (loyalty to
team and project)
• Upper management not involved
with day-to-day activities
Disadvantages
• Can be an expensive organization
to maintain
• Tendency to hold onto key
resources
• Lack of opportunities for technical
interchange between projects
3. MATRIX STRUCTURE
Characteristics:
 Combination of functional and projectized organizational structures
 Three types of matrix structure: weak, balanced, strong
 3. MATRIX STRUCTURE

Weak matrix:
 Similar to functional structure
 Project manager considered a coordinator with little authority
 Functional manager controls the budget
 3. MATRIX STRUCTURE
Balanced matrix:
 Fulltime project manager
 Project manager has low to moderate authority
 Functional manager and project manager controls the budget
 3. MATRIX STRUCTURE
Strong matrix:
 Project manager has strong authority and is a fulltime position
 Project manager controls the budget
3. MATRIX STRUCTURE –
DISTRIBUTION OF POWER
Strong matrix is closer to Weak matrix is closer to
project-based structure functional structure
Strong Matrix Balanced Matrix Weak Matrix
High Power
Power

Low Power

Project Manager Power

Functional Manager Power
ORGANIZATIONAL STRUCTURE RELATED TO
PROJECT DELIVERY

Overview:
SELECT THE ORGANIZATIONAL STRUCTURE
Choose one of the following companies and select the appropriate organizational
structure for functional/operational needs and project delivery. Be prepared to
justify your selection:
 Tim Horton's
 Bell Canada
 Residential deck construction company
 College
 General Motors
 Wedding planner
 Hospital
 Loblaws
 Pawnbroker
 Disney
HOMEWORK AND EVALUATIONS

 Readings (and other material) for next module as listed in Course

Overview
 Project – Industry Sustainability (outline and final submissions)
REFERENCES

 Project Management Institute (2017). A Guide to the Project

Management Body of Knowledge (Sixth Edition).
 Kerzner, Harold (2017). Project Management, Twelfth Edition.
 Watts, A. (2014). Project Management. Victoria, B.C.:BCcampus.
Retrieved from https://opentextbc.ca/projectmanagement/.