Organisation Structures: Do They Impact Project Success?

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In my previous article “Business Politics before Projects Success: The Games Executives Play,” I propounded a view which stated that  a Business Process Reengineering (BPR) project’s success or failure is highly influenced by a project having multiple accountable executives driving decisions on a project. In this article I will expand on this view by focussing on the concept of Organisation Structures and their influential impact on the BPR project domain.

Many definitions of Organisation Structures exist from various sources, however for the purposes of this article I will summarise and reconstruct the definition as follows:

Organisation Structure refers to the lines of authority that articulate the controlling of decisions taken and the distribution of type of work performed based on the core purpose and strategic intent of the organisation.”

The first part of the definition “lines of authority…type of work performed,” is supported by the various forms of organisation structures as defined by Henry Mintzberg’s, “Structure in 5’s.” Mintzberg classified five types of structures namely; Simple Structure, Machine Bureaucracy, Professional Bureaucracy, Divisionalised Form and Adhocracy. Following a brief elaboration of the organisation structure types the impact to BPR projects will be highlighted.

In the Simple Structure format, also known as Entrepreneurial, there exists a strong vertical line of authority and decision making. No formal structures exist for performance of work and or support functions.

Machine Bureaucracy has very formal structures wherein lines of authority are functionally based. Decisions and work performed are also governed by these functional groups in their respective functional spaces namely; Sales, Product, Marketing etc.

Professional Bureaucracy is different to Machine Bureaucracy in that the decision making power for the functional lines of authority are distributed across the vertical lines due to the use of professionally skilled individuals and standardised work execution approaches. Machine and Professional Bureaucracy organisations are similar in nature to the commonly known Functional type organisation.

The Divisionalised Form, similar to the Divisional type organisation, exists in large organisations wherein many divisions are created across, product, geography and market domains to perform related work. Authority and reporting lines span across levels that are accountable for strategy and operations. This structure also leads to duplication of work if common areas such as Human Resources and Information Technology exist independently within the operational areas of the organisational divisions.

The Adhocracy type classified by Mintzberg is of particular interest, as is the Matrix type of organisation wherein aspects of Functional and Divisional are selected to create the organisation structure. The Adhocracy organisation type is an adaptive type of structure which is influenced by the changing internal and external environments as well as any changes in organisation strategy. A Project organisation structure is very similar in nature to Mintzberg’s Adhocracy as no two projects are similar and structures are determined by the project objectives and execution environments.

This leads us to the pinnacle of our discussion which relates to the second part of our aforementioned Organisation Structure definition, “core purpose and strategic intent of the organisation”. Working in large corporates wherein the Matrix Organisation Structures exist I found that multiple lines of reporting and authority overlap one another creating a grid of complexity that is not supportive of executing BPR projects. One of the reasons’ being the none existence of a single individual accountable for decision making as multiple stakeholders across various operational and strategic levels engage in business politics influencing the success or failure of the project. Another very important reason is that many corporate organisations core purpose is not in executing BPR projects; in fact this is a “business unusual” activity, however executing BPR projects do enable strategic intentions such as cost reduction and or service performance improvement.

Looking back at Mintzberg’s organisation structure classifications an assertion can be put forward that an organisation would structure themselves in accordance to performing their core purpose. Unfortunately, as mentioned earlier, the core purpose of most corporate organisations is not in executing BPR projects yet practical experience has shown that this core purpose enabling structure is transferred into the execution of BPR projects. At this point clarification is required around what I mean by the execution of BPR projects. It is not referring to execution in the form of continuous improvement project techniques and or methods like Six Sigma and LEAN, but rather to how decisions are taken on a project and how authority and reporting lines are determined on human capital used within projects. It is also imperative to note that I refer to enterprise BPR type projects hence the influential factor of organisational structures.

As alluded to before, the success of an enterprise wide BPR project is influenced by business politics as well as the authority and reporting lines created to support an organisation structure type. Using the above point a strong case can be built for having independent BPR project execution structures that are created to mitigate multiple decision points and multiple authority and reporting lines. This then leads us to the conclusion that organisations should have a core purpose enabling organisation structure which supports an integrated structure that enables the successful delivery of enterprise BPR projects. This is a similar yet different view of Mintzberg’s Adhocracy form of organisation structure, wherein the adaptability comes in the form of having an independent entity within an organisation that is singularly accountable for decisions and human capital directly employed and or seconded for the execution of the BPR projects, thereby mitigating the strong influence of business politics and authority and reporting lines on an enterprise BPR project.

Comments

Michelle Nefdt
,
posted 10 years 38 weeks ago

A really great article and

A really great article and key insights. I like the birds eye view on BPR from the ground level and the political drivers and governance at the executive/ senior management level. Its about time we start talking about eradicating the discrepancies between structure, governance and change. Thanks for sharing, Imtiaz Abdul Kader.
Malcolm Ryder
,
posted 10 years 38 weeks ago

Great to have your recap of

Great to have your recap of Mintzberg. My comment here is inconclusive (intentionally). More suggestive. A project itself is, in essence, a micro-organization. The project organization is a supplier to a larger entity. The larger entity is a client. The client can be a "community" even more likely than it is another "organization". The structure of the micro-organization called "project" is essentially an engineering structure, and therefore would be managed that way.(This intends to include consideration of newer engineering paradigms, but it is still engineering.) Engineering and execution are not synonyms, but of course the role of supplier means that the project will be subject to performance assessments that view its competency in its role. The issue you are (I think) focused on is the set of barriers that prevent the client from accepting the product of the supplier. Ordinarily, the reasons for that are a failure of the "deliverable" to comply to the client's requirements, either substantively, or contractually. Since acceptance is predicated on the demand side, and since on the demand side requirements definition is more critical to success than production, the most significant "decision making as multiple stakeholders across various operational and strategic levels" is in the reconciliation of defined requirements before the project execution begins its production phase. Barriers to reconciliation of requirements can certainly include politics, as well as culture, knowledge and dissonance between strategies. But I believe you mainly tried to highlight the phenomenon that the client actually could not agree to form the supplier micro-organization called "project" with enough autonomous function and governance to succeed as a supplier (due to inadequacies of matrix management). I would argue that if the requirements were managed successfully, then the project is far more likely to acquire and keep the autonomy it needs within the terms of its contract to finally deliver. Reconciling requirements across matrixed management will call for people who have certain skills. (Again, no presumption of being conclusive here... more suggestive.)

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