Masterarbeit FHNW 2009 - Yvonne Meinert Fiedermann

Balanced Matrix Form of Organizational Structure 1

Balanced Matrix Organizational Structure: Assessing the

Suitability for a Large IT Project Management for an

International Bank

Abstract

In the present day competitive business environment, emphasis is on

shifting the organizational structures that are flatter with fewer levels of

management and where cross-functional communication is of critical

importance. However, this form of structure may not find its adaptability

to a large IT project for an international bank because of the complexities

involved in the project management. Based on secondary research this

study examines the suitability of a strong matrix form of project

management structure and suggests a balanced matrix organizational

structure as a replacement for an efficient project management, for an

international multicultural long-term IT migration program on a

hypothetical case in an international banking environment. The research

also extends to the complexities and characteristics of strong and weak

matrix organizations in general and their suitability to large IT projects.

Key Words:

Information Technology (IT), Migration, Project Management, Balanced Matrix,

Organizational Culture, Organizational Structure, International Bank,


Table of Contents

Abstract ................................................................................................................................ 1

Chapter 1 Introduction ......................................................................................................... 4

1.1 Project Management Structures – An Overview........................................................ 5

1.1.1 Functional Organization ...................................................................................... 6

1.1.2 Dedicated Teams.................................................................................................. 6

1.1.3 Matrix Structure ................................................................................................... 7

1.2 Purpose of the Study .................................................................................................. 8

1.3 Aims and Objectives .................................................................................................. 9

1.4 Research Question .................................................................................................... 10

1.5 Structure of Presentation .......................................................................................... 10

Chapter 2 Review of Related Literature ............................................................................ 11

2.1 Introduction .............................................................................................................. 11

2.2 Considerations in Deciding a Project Management Organization Structure ........... 12

2.3 Importance of an Organization Structure for Project Management ......................... 12

2.3.1 Designing an Organization Structure ................................................................. 13

2.3.2 Specialization and Coordination ........................................................................ 14

2.4 Types of Organizations Structures ........................................................................... 17

2.4.1 Analysis of Functional Organizational Structure .............................................. 18

2.4.2 Analysis of Projectized Organizational Structure ............................................. 21

2.4.3 Matrix Organization ........................................................................................... 22

2.5 Balanced Matrix Form of Organizational Structure ................................................ 25

2.6 Impact of Culture on Selection of Organizational Structure ................................... 30

2.8 Application of Balanced Matrix Structure for Major IT Projects ............................ 30

Chapter 3 Research Methodology ..................................................................................... 32

3.1 Review of Secondary Data and Analysis ................................................................. 32

3.2 Research Design and Purpose .................................................................................. 33

3.3 Sources of Secondary Data ...................................................................................... 33

3.4 Merits and Demerits of Secondary Sources ............................................................. 35

3.5 Justification of the Secondary Research for Current Study ..................................... 36

3.5 Summary .................................................................................................................. 36

Chapter 4 Findings and Analysis ....................................................................................... 38

4.1 Introduction .............................................................................................................. 38

4.2 Problems with Weak/Functional Matrix Form ........................................................ 39


4.2.1 Misaligned Objectives ....................................................................................... 40

4.2.2 Lack of Clarity in Roles and Responsibilities ................................................... 41

4.2.3 Ambiguous Authority ........................................................................................ 42

4.2.4 Lack of Matrix Guardian ................................................................................... 43

4.2.5 Silo-Focused Employees ................................................................................... 44

4.3 Analysis .................................................................................................................... 45

4.3.1 Suitability of Balanced Matrix ........................................................................... 46

4.3.2 Steps involved in Making the Balance Matrix Organization ............................ 46

4.4 Summary .................................................................................................................. 47

Chapter 5 Conclusion and Recommendations ................................................................... 48

5.1 Conclusion ................................................................................................................ 48

52. Recommendations .................................................................................................... 49

Bibliography ...................................................................................................................... 50


Chapter 1 Introduction

Until the mid or late 1970s, larger business corporations had preferred to operate in “silos”

representing rational divisions. In this form of organization, the divisions consisted group of

workers who would report to a line manger or functional manager. This form of organization had

its own weaknesses like duplication of skills and distinct but redundant processes around the

organization. These weaknesses necessitated the formation of matrix form of organizational

structure (Davis & Lawrence, 1977: 24). Matrix form of structures led to more efficient project-

based management. Especially with the increased necessity to manage specialized information

technology (IT) projects, matrix form of organizational structure was considered appropriate

because of the functional convenience the structure gave to the project leaders for managing

large projects efficiently. Even in the matrix, form of organizational structure there exists an

apparent stress between the project manager and the functional managers in the matter of sharing

the available human resources (Larson & Gobeli, 1987: 132). This has placed some limitation on

the use of the matrix organization for long-term IT projects where the continued involvement of

line staff is considered vitally important. This problem becomes more pronounced in the case of

organizations having operational locations in different geographical areas. This study examines

the possibility of replacing a strong matrix by a balanced matrix organization in respect of a

long-term IT project, involving international multicultural organizational structure set up for an

international bank.


1.1 Project Management Structures – An Overview

Project Management is defined as a “combination of human and nonhuman resources pulled

together in a |temporary' organization to achieve a specific purpose” (Cleland & King, 1983: p

187). The features of an organizational design for managing a project include a proper structure

consisting of groups of employees or business units and the manner in which the people or units

are coordinated to produce the desired results in the form of products or services. Based on the

structure, other elements of organizational design like the reporting relationships, power and

authority of people forming the organization, incentives and performance management systems

and empowerment of employees are described. Business process design, people and partners of

the organization, organizational structure, availability of infrastructural facilities, leadership and

governance, improved information access, possibilities of information sharing, and quality,

availability and security of information are some of the other aspects that go into the

determination of a proper organization structure (IT and Organization: 1).

Same considerations weigh with the formation of an organizational structure for managing a

project. There are certain peculiarities of the projects, which pose as challenges in organizing the

management of them. For instance, the uniqueness and shorter duration of certain projects in

comparison with the long-term ongoing organizational activities presents a challenge of

assigning specific team members to the project. Similarly, the multidisciplinary and cross-

functional nature of the projects leads to authority and responsibility dilemmas making them an

inherent issue with the project management. This issue becomes more pronounced in the case of

projects extending to different geographical locations. It is vitally important that an appropriate


project management structure be chosen to derive the full potential of an efficient project

management. The consideration here is that the system to be considered as the best suited is to

balance the needs of the project with those of the organization. There are three main choices,

which can be viewed as the available options for forming a project management structure. They

are: (i) functional organization, (ii) dedicated project team and (iii) matrix form of organization.

1.1.1 Functional Organization

In a functional organization, different segments of the project are delegated to respective

functional units and the coordination between functions is maintained through normal

management channels. This form of structure would find its suitability when the interest of one

of the functional areas has dominance on the project. This form is also suitable when the success

of the project underlies one of the functional areas. There are some distinct advantages in the

functional organization structure in that there will be no structural changes and it is flexible. This

form can have the advantage of using the in-depth expertise of the team members. It also

facilitates the transition of the project once it is completed. Lack of focus and poor integration

characterize the functional organization and it lacks of ownership. The process is very slow in

functional organization.

1.1.2 Dedicated Teams

Dedicated teams as another form of project management structure function as independent units

controlled by the project manager as the leader of the team. Especially in an organization where

projects are, the predominant form of operations, dedicated teams forms the basic structure with

the functional departments providing support for the teams. Simplicity, speed with which the


teams can function and cohesiveness is some of the advantages of dedicated teams. A better

cross-functional integration is also facilitated by the dedicated teams. However, this form of

structure is expensive to adopt and there is the likelihood of internal strife. Besides, there is

limitation on the technological expertise and difficulties will be experienced in the transition

after the completion of the project.

1.1.3 Matrix Structure

Matrix structure is a hybrid version of an organization structure as an extension of the normal

functional structure. Matrix structure consists two chains of command – one as functional and

the other project oriented. Project team members report at the same time to both the functional

manager and the project manager. Matrix structure enables the maximization of the use of

available resources. Under matrix structure, team members would be able to participate in

multiple projects and at the same time can perform normal duties on a functional basis. Matrix

form of structure is able to achieve a greater integration of expertise of the members and the skill

requirements of the project. There are three different forms of matrix structure; (i) weak,

functional or lightweight form, (ii) balanced or middleweight form and (iii) strong or

heavyweight form. Because of its strong focus on the project and efficiency matrix form of

structure is preferred for the projects. It is flexible and facilitates easier transition once the

project is completed. However, this form of project management structure suffers from the

disadvantage in that there is the likelihood of a dysfunctional conflict and infighting. This

structure is stressful for the project leader and the progress is slow.


The rated effectiveness of different form of project management structures is exhibited in the

following figure.

Figure 1 Rated Effectiveness of Different form of Project Management Structures

Source: Larson, E. W., and Gobeli, D. H., “Matrix Management: Contradictions and Insights,”

California Management Review, vol. 29, no. 4 (Summer 1987), p. 137

In this context, as a hypothetical case, the this study examines the suitability of a balanced matrix

form of organizational structure in the place of a strong or heavyweight form for a long-term IT

project with the presence of multicultural background for migrating the existing IT applications

of an international bank.

1.2 Purpose of the Study

Choosing an appropriate management structure is an essential prerequisite for the success of any

project especially any IT project. There are several considerations, which go into the selection of

a specific form of organizational structure. The importance of the project for the success of the

firm is one of the main considerations. It is also necessary to consider the percentage of core


work involved in the projects and the level of human and physical resources available to carry

out the project. The selection of an appropriate project management structure In the case of IT

projects – both short-term as well as long-term – is the first step in bringing the project into

operation. This study will enhance the existing knowledge on assessing the suitability of a

specific organizational structure for a large IT project. The study will analyze several project

considerations like size of the project and strategic importance of the project before arriving at

the particular form of organization structure for a long-term IT applications migration project in

an international banking environment. Because of the novelty in the approach, this study will

provide scope for further research in the area.

1.3 Aims and Objectives

This study has the broad aim of suggesting the suitability of balanced matrix form of

organization structure for a long-term IT applications migration project in a multicultural

international banking environment. In the process of achieving this aim this study accomplishes

the following objectives. The study will strive:

To make an analytical review of the related literature on the forms of organizational

structures on project management in general

To examine and report on the characteristics, merits and demerits of different form of

organizational structures in the context of IT project management

To conduct a secondary research to substantiate the hypothesis that the balanced matrix

form of organizational structure is best suited for any large IT projects


To suggest possible avenues for conducting future research in the realm of project

management structures

1.4 Research Question

Through the secondary research to be undertaken, this study will render theoretical support to the

research question:

Can the balanced matrix form of project management structure be considered (in preference to

strong matrix structure) as more suitable for a large IT project with a multicultural base, in the

context of an international banking environment?

1.5 Structure of Presentation

With a view to make a cohesive presentation, this report on the study of “balanced matrix project

management structure” has been divided into different chapters. The first chapter apart from

introducing the subject matter of study also describes the aims and objectives of the study along

with the purpose of the study. Second chapter presents a detailed analytical review of the related

literature on the topic. Third chapter on research methodology presents a brief overview of the

research method adopted for conducting the current study. Findings of the research and an

extensive analysis of the findings forms the fourth and penultimate chapter. The final chapter

presents some concluding remarks as a recap of the some of the issues discussed in the text of the

report and few recommendations for further research in the field of study.


Chapter 2 Review of Related Literature

2.1 Introduction

The purpose of a project organization structure is to facilitate the coordination and

implementation of all activities connected with the project. The major reason for the creation of

an organization structure is to create a conducive working environment in which the team

members can interact among them with a minimum amount of interruptions and overlaps. The

organization structure should also prevent any conflicts arising among the members. One of the

critical decisions of project management is the form of organizational structure that will be

followed for managing the project (PM4DEV, 2007: 3). Each project has its own peculiar

characteristics. Therefore, the design of the organizational structure should be based on the

organizational environment and the characteristics of the project. Of course, the authority level

of the project manager should able given a serious consideration in deciding the structure of the

organization for managing the project. A project structure may take various forms and each of

the form has its own merits and demerits (PM4DEV, 2007: 3). The objective of this chapter is to

present a review of the related literature on the project management structures that could be

considered for major it projects. This chapter will also elucidate the relative merits and demerits

of different kinds of organization structures which are worthy of consideration.


2.2 Considerations in Deciding a Project Management Organization

Structure

A wide range of project considerations weighs with the selection of an appropriate project

management structure. Elements like, size of the project and strategic importance of the project

are the foremost considerations in determining the appropriate project management structure.

Novelty in the project management ideas and the need for innovation also determine the

selection. In addition, there is the need for integrating various functional areas and complexities

involved in the project and organizational environment, which also guides the project manager in

his decision on a suitable structure for managing the project. Above all, it is the budget and time

constraints that play a major role in the determination of the size of the project team and duration

of the project and the stability of resource requirements is yet another consideration the project

leader has to take into account while deciding on the project management structure.

Organizational culture is another important aspect, which goes to decide the project management

structure. Therefore, an in-depth study of the theoretical aspects of project management structure

becomes essential before a suitable structure is identified for the migration project of the IT

applications in respect of an international bank (Davis & Lawrence, 1977: 26; PM4DEV, 2007:

4).

2.3 Importance of an Organization Structure for Project Management

One of the major objectives of having a proper organization structure for project management is

to reduce the uncertainties and confusion, which are quite likely to occur at the initial stages of

any project. Since the organizational structure takes the responsibility of defining the


interrelationships among the members of the project team as well as the boundaries of

relationship with the external stakeholders, it becomes easier to progress through the project

from the inception without any confusion. Organization chart presents a graphical illustration of

the authority and responsibility of every organizational member without ambiguity (PM4DEV,

2007: 4).

The success of any project depends on the proper designing of the organization structure. Use of

properly drawn organization charts, makes it is easier to determine the authority and

responsibility levels, working relationships among the project team members, formal supervision

levels and lines of communication between the project members.

2.3.1 Designing an Organization Structure

Designing an organization structure for managing the project is only one aspect of organizing the

project. The project manager is expected to implement and apply the organizational policies and

principles in managing the project successfully to the benefits of all stakeholders involved. To

enable this, the project manager should consider designing an effective organization structure so

that the communication is effective among the team members and authority/responsibility levels

are properly defined and informed to all the individual members. The structure should be capable

of establishing the formal relationships among the project manager, team members, and the

organization developing the project, project beneficiaries and all stakeholders associated with the

project (Weber, 2000: 1). The structure should be capable of facilitating an effective interaction

and integration among all the project participants and should be capable of promoting open and

effective communication lines between the participants.


It is vitally important that the project manager design the structure in such a way that it caters to

all the future requirements of the project. Therefore, it becomes imperative that the project is not

designed too rigid or too lose. This is important because the purpose of creating an organization

structure is to achieve the ultimate objectives of the project with the utmost cooperation of the

project team members and within the given project constraints in terms of cost, time, quality and

other resources. The project manager must keep in view the objective of creating the

organization structure in that by designing an effective structure he should be able to influence

the team members to deliver their best in respect of the assigned tasks and responsibilities. The

structure designed by the project manager should also be able to develop an effective

collaboration among the team members while the overall cost of the project should be kept in

view. The structure should also avoid the duplication and overlap of functions to the maximum

extent possible. Overall, the design should make the structure workable to enable the project to

be completed within the cost and time allotted and with the best quality to the satisfaction of the

project beneficiaries (Weber, 2000: 1).

2.3.2 Specialization and Coordination

Apart from the major project, considerations there are two other factors, which play a dominant

role in designing the organization structure for managing a project. They are (i) the level of

specialization needed and (ii) the need for coordination. It is for the project manager to consider

these two factors at the time of designing the project structure in order to make the structure an

effective one (Fimreite & Laegreid, 2005: 1).


Specialization

Specialization influences the structure of the project by the degree of specialty of the project in

the technical details relating to the project. Either a project may be highly specialized focusing

on any specific area of development or it may have several broad specializations in different

areas of focus. In case of large projects with more specialized applications there may be different

technical areas each having virtually different requirements in terms of resources. These project

areas might be having different goals, approaches and methodologies and all of these would be

having an influence on the organizational structure of the project. Since the goals, approaches

and methodologies will determine the ways the project has to proceed with the implementation

of the activities they have a large role to play in the selection of the design of the organization

(Fimreite & Laegreid, 2005: 1).

The important point about a project that has two phases –for instance – reconstruction and

education – there is the need for managing the individual components differently and this will

entail entirely different approach in the project management. The project management in that

case would depend on the degree of specialization in each case. For example in dealing with the

education component, the structure needs to be more open and informal. Here the time limit is

longer and the focus is on sharing and generation of new and innovative ideas exhibiting more

creativity. On the other hand, in the reconstruction component, the module has certain specific

goals to be achieved, that too within the stipulated time allotted for completion of the project.

There is only less opportunities for sharing of ideas. Achieving this kind of a project goal

requires the design of a rigid and hierarchical structure to get the project team members deliver


their best. It is to be understood that though, with specialization it is possible to achieve

maximum productivity in reaching the individual component;’ goals, there are bound to be some

dissimilarities which will lead to conflicts among the members of the different project

components. If there is more dissimilarity, it becomes more difficult for the project manager to

achieve the desired progress (Fimreite & Laegreid, 2005: 1; PM4DEV, 2007: 5).

Coordination

Coordination is an essential process in the project management the purpose of which is to bring

unity to all the different elements involved in a project. The project work is usually broken down

into Work Breakdown Structures (WBS), which form the foundation on which the project work

is planned. WBS divides the entire project goals into specific goals for each of the components

or area of the project. In order to achieve a uniform progress of the project it is important that all

the components move in the same direction with the same intensity and speed towards the

completion stage. Therefore, it is for the project manager to design a structure that enables an

integration of the various components in such a way that the combined efforts contribute to the

achievement of the project goals. Integration here implies the degree of collaboration and the

level of mutual understanding required among the several project components that go to make

the project as a whole (Fimreite & Laegreid, 2005: 1).

A majority of the products have a division of labor and task interdependencies that make the

components unique in nature requiring different approaches to integrate them for moving

towards completion. The need for integration would be felt greater in those projects where there

are a number of project components with individual specializations. The purpose of designing a


proper management structure therefore is to achieve harmony of the efforts of the individual

project components towards achieving the group goals. “The project manager’s principal

responsibility is to develop integrating strategies to ensure that a particular component or activity

is organized in a way that all the components, parts, subsystems and organizational units fit

together as a functioning, integrated whole according to the project master plan” (PM4DEV,

2007: 5).

In fact these concepts of specialization and coordination are the theoretical base on which this

study is based fro proving that a mixed matrix organization would be a better fit for a large IT

project in an international banking environment, where the project aims to migrate to a common

platform from an existing different working platforms.

2.4 Types of Organizations Structures

Out of the several considerations in choosing the design of the organization structure, especially

within an existing organization, the complexities of the project and the extent of authority and

responsibility top management has decided to delegate to the project leader and other project

executives. In order to achieve the project goals the top management of the organization should

design a project management structure that lends complete support to the progress of the project.

The structure can be defined and shaped based on the emphasis on the nature and complexities of

the project and by adapting to the ways the roles and responsibilities need to be assigned to

individual members of the project team.

As a first step towards defining the structure of the project organization, the role, functions, job

description, degree of authority and autonomy and the relationships of the project manager to the


parent organization and other projects running concurrently need to be evolved with precision. It

is also necessary for the top management to devise an effective communication channel and the

manner in which the conflicts between the project and the rest of the organization could be

resolved.

Though different forms of organizational structures have been evolved during the recent times, it

is observed that the structures lack many of the essential qualities of the traditional forms of

organizational structures (Russell, 2007: 1). The ultimate objective of the project manager is to

arrive at a structure that will facilitate teamwork among the project team members by

maximizing the productivity resulting in an improved quality and efficiency. Three main

traditional organizational structures can be engaged for effectively managing a project. These

three are (i) Functional organization, (ii) project organization (or dedicated teams) and (iii)

matrix organization.

2.4.1 Analysis of Functional Organizational Structure

Functional organization is the oldest organizational structure, yet the most successful one so far.

This method is found suitable when used for projects involving some routine types of works.

Similarly, when it is necessary that the project should stand up to certain specified quality or

work standards the project manager will decide on this design. In the functional organization,

structure projects can be assigned in two different ways. One way is to make a functional

manager in-charge of the project and the project manager then undertakes the responsibility of

coordinating with other departments for the completion of the project. The other way is that the


project is shuffled from one department to another where it becomes the responsibility of each

departmental manager to complete their part of the project work.

Thus, in the functional organization, the authority rests with the functional heads and the

structure is divided by departmental groups. The project Staff members belong to different

functional groups like financial, planning, public relations, engineering, and legal. Such

functional staff is drawn into the project depending on the requirement of the specialized

knowledge. Some of these major functional groups can be further subdivided into smaller

functional groups.

The main advantage of functional form of organizational structure is that since each functional

group has a total control over its part of the project, it is possible to enforce application of

standards in the performance of various modules of the projects.

However, there are some disadvantages associated with the functional organization. The main

among them is that the project cannot command speed, flexibility and effective communication

especially when cross–functional modules are involved in the project. Since there is a complete

division of roles and responsibilities in a functional organization, answering a query or acceding

to a request must will face considerable delays as such information or request has to be passed

through the department heads for approval. In addition, since different functional managers share

the responsibility for managing the project, there will be complete lack of accountability for the

completion of the project.

A simple form of functional organization is depicted in the following diagram.


Figure: Functional Organization Structure

Source: http://www.publicprocurementguides.treasury.gov.cy/OHS-

EN/HTML/index.html?7_2_3_organizational_structure.htm p1

This design is not found in favor with large and complex projects as there will not be effective

coordination to meet the project objectives. One of the major criticisms against this structure is

that there is no built-in employee recognition. The work of the project members cannot be

measured individually to consider rewarding the project performance. Accountability about the

progress or completion of the project modules in this kind of organizational structure is also

poor. Therefore, this kind of organizational structure is considered as least effective for

implementing or managing the projects.


2.4.2 Analysis of Projectized Organizational Structure

This kind of organization structure is designed to execute specialized projects. “It is specifically

tailored to meet the demands of complex projects by isolating unique work and maintaining a

strong focus on completing the project” (Russell, 2007: 1). After completion of the project, this

structure is disbanded. The effectiveness of the design can be seen in maintaining the dedicated

resources throughout the duration of the project.

The projectized organization structure as shown in the figure is a design where the structure is

focused on teams having cross-functional expertise. Almost the entire resources of the

organization are deployed to achieve the project objectives and the team’s mission is only the

completion of the project with no diversion of focus to any other functions. There is a clear line

of authority set with one project manager leading the organization and all other members report

to the project manager for guidance and directions.

The major advantage of this kind of organizational structure is the speed and flexibility with

which the project objectives can be achieved. With the availability of all the professionals with

the required expertise within the organization and are fully committed for the completion of the

project it becomes easier for the project manager to reach swiftly to the changing circumstances

and complete the project on time. He can also ensure the quality of the project to the maximum

satisfaction of the key stakeholders. The responsibility for the cost, progress, quality and success

of the project is clearly identified and lies on the Project Manager.


Figure: Projectized Organizational Structure



One of the main disadvantages of the projectized form of organizational structure is the high

resource costs involved in managing the project. This is so because the organization often has to

hire specialized staff with professional expertise in the respective fields in order to initiate and

implement different projects at the same time. In addition, there is the additional cost burden on

the administrative side as there may be occasions that the project teams remain idle.

2.4.3 Matrix Organization

By combining the features of both functional and projectized structures, the matrix form of

organizational structure is evolved. As shown in the figure, the project team members are drawn


from one of more of the functional departments depending on the requirements of technical

expertise by the project. The project manager is made responsible for the completion of the

project within the time and of the required quality. The project team members, though belonging

to different functional departments, report to the project manager for the project related activities

(Larson & Gobeli, 1987: 129). For regular business issues other than the project issues the team

members report to the respective functional managers and take their guidance and instructions.

The project team members so drawn from the functional departments are returned to their

original functional departments on the completion of the project or the completion of their part of

the work. In the case of matrix, form of organization it is not necessary that the project manager

assigned with the responsibility of the completion of the project is a functional departmental

manager. The project manager can be drawn from the available human resources possessing the

requisite qualification, experience and background within the company. During the

implementation, process of the project the project manager interacts with the different functional

managers for planning the necessary resources and utilization of the resources for the project

purposes. He can take the guidance and advise of the functional managers for making the

necessary revision or changes in the project course (Might & Fischer, 1985: 73).

The distinct advantage of matrix organizational structure is that it combines and retains the

advantages of both the functional and projectized structures.


Figure: Matrix Form of Organization Structure



This makes the matrix organization the most effective form of structure for implementing and

managing the projects. Because of the resultant advantages, this structure is being used for

managing most of the present day projects. This structure enables an effective allocation of

resources to different projects. There are four distinct advantages, which make the matrix form

most preferred form of organization. They are: (i) it allows companies to focus on multiple

business goals, (ii) it facilitates the management of information, (iii) it enables companies to

establish economies of scale and (iv) it speeds responses to environmental demands (Burns &

Whorely, 1993: 110; Galbriath, 2000: 32); Kilmann, 1985: 155; Knight, 1977: 16).


The matrix form of organization has a major disadvantage in that it is the source for potential

conflicts between the project manager and the functional managers regarding the allocation of

resources since the functional manager has to make the allocation of available resources to

different projects running concurrently using the resources from his department.

Another problem associated with matrix organizational structures is that since individual

employees associated with the project report at the same time to two different managers it often

leads to ambiguity and conflicts. However, this problem can be mitigated by employing an

effective communication and solid leadership between the mangers involved in the project.

2.5 Balanced Matrix Form of Organizational Structure

The matrix form of organization structure can be considered in three different forms depending

on the delegation of authority to the project manager and other criteria. They are weak or

functional matrix form, balanced and strong or project matrix form (Burns, 1989: 359;

Galbraith, 1971: 33; Larson & Gobeli, 1987: 129). This section details the characteristics of the

three forms of structures to provide the base for the selection of an appropriate structure.

A weak matrix form of structure more or less resembles the functional organizational structure in

which the functional manager holds the responsibility for the completion of the project created

within his areas of expertise. This form of structure is resorted to when the focus is on quality

and technical expertise needed for the execution of the project. This kind of structure undermines

the authority and decision-making capability of the project manager. This would make the

success of the project difficult. However, the weak matrix structure is comfortable for the people

since they are used to work with the kind of structure. Especially in the case of a project


involving IT and IS (Information System) since the project manager is fully empowered to

complete isolated project the project managers are keen in getting into this kind of structures.

From the logistical point of view since the staff work locations are centralized around the

functional departments, information sharing among the team members is highly facilitated. This

form of organizational structure has serious drawbacks in that communications and decision-

making process is slow since they exist outside the program structure. This gives rise work

scheduling and budget issues. Accountability also rests outside the program, which seriously

hampers the progress of the project.

The figure indicates the structure of a weak matrix form.

Figure: Weak Matrix Form of Organization

As against the weak form of matrix structure, is the strong matrix in which the project manager

holds almost the total authority for the execution of the project. This form of structure is the most

sought after structure because of the autonomy it provides to the project manager. From the

standpoint of the project management, this method has several advantages in terms of cost and


quality. The main advantages are (i) since the structure focuses on the complete authority for

decisions affecting a project or programs within a project the decision-making process is highly

simplified, (ii) it is possible to make program budgets and staffing decisions within the programs

without relying on other functional departmental resources, (iii) staff members have to report to

one single manager which improves motivation, interpersonal relations and productivity (iv)

resources are accountable to specific programs for deliverables and performance and (v) there

are clear communication channels that aid the progress of the project.

However, the strong matrix form also got some disadvantages. In case there is no availability of

enough resources in key technical and business areas, there may be difficulties in creating

dedicated project or program teams. It may take several weeks or months to recruit and train

people with required skills. There may be the other problem of existing staff located in different

geographical locations making their relocation difficult, which is sure to affect the progress of

the project. Moreover, this structure may prove uneconomical as there is the necessity to appoint

specialized people to work in the project.

The classification depended on the source of decision of authority in the matrix. In the balanced

matrix, the authority is split between purely functional level and purely project level. “The

project manager directs and sets control for the project with some shared authority over the

functional personnel. Functional management retains control over much of the team and is

responsible for carrying out the plans and controls established by the project manager” (Kerzner

1984: 21; Larson & Gobeli, 1987: 132; Might & Fischer, 1985: 73)

The figure shown below exhibits the strong matrix form of organizational structure.


Figure: Strong Matrix Form of Organization

A more project-friendly typology of matrix forms was developed by Sayles (1976: 4). However,

the work of Galbraith (1971: 34) which created an organizational structure that lie between pure

functional (weak) and pure product (strong) form of organization. This structure was further

refined by Larson and Gobeli (1987: 132) and they arrived at the balanced matrix organizational

structure (see figure).

The balanced form of matrix organization structure ideally fits to an organization or project

having multiple products or project objectives, where there is the need to respond to

environmental and technological changes.


Figure: Strong Matrix Form of Organization

Table: Project Characteristics of Different Organizational Structures

Organization

Structure

Project

Characteristics

Functional

Matrix

Projectized Weak Matrix Balanced Matrix Strong Matrix

Authority of the

Project Manager Little or

None Limited Low to Moderate

Moderate to

High

High to

Almost

Total

Resource

Availability Little or

None Limited Low to Moderate

Moderate to

High

High to

Almost

Total

Who Controls the

Project Budget

Functional

Manager

Functional

Manager Mixed

Project

Manager

Project

Manager

Role of the

Project Manager Part-time Part-time Full-time Full-time Full-time

Project

Management

Administrative

Staff

Part-time Part-time Part-time Full-time Full-time

Source: http://www.tensteppb.com/2.3OrganizationalInfluences.htm p1


The characteristics of the different forms of project management organizational structures are

presented in the above table for easy comparison.

2.6 Impact of Culture on Selection of Organizational Structure

The cultural characteristics of an organization play a vital role in the choice of a suitable

organization structure for the management of any project. The comfort level of the employees

with the kind of structure of the organization needs to be assessed before arriving at a decision

on the structure. There are different metrics identified for measuring the culture of an

organization including conflict tolerance, system focus and risk tolerance (Clifford & Larson,

2003: 14). In circumstances where people within the project identify their jobs, more than with

the organization which makes the integration difficult and if the emphasis is more on the

individuals than groups then the introduction of purely functional structure may prove to be

counterproductive. Functional or weak matrix will make the functional manager responsible for

the completion of the project but at the same time, the project members would like to give

priority to their original role and give only secondary focus to the project related activities. On

the other hand, if the organizational culture were one of receptive in nature a balanced matrix

organization would prove to be successful.

2.8 Application of Balanced Matrix Structure for Major IT Projects

Generally, IT projects face the same management problems as other projects. There are four

fundamental reasons, which make any IT project a failure. They are (i) poor investment


decisions, (ii) management sponsorship and stakeholder involvement, (iii) application of

immature and inappropriate technologies and (iv) use of project management methodology.

“Technology projects that implement a project management methodology are effectively

planned; have appropriate change control processes in place; and, deliver the right product or

service, on time, and within budget”. This brings us to the discussion on the selection of an

appropriate management methodology for an IT project whether large or small. The application

of balanced matrix structure as a viable method will be discussed at more length in the chapter 4

on findings of the study.


Chapter 3 Research Methodology

The methodology process of this study entails the collection, organization and integration of the

collected data. Data collection will be the most important step in the success of this paper since it

will lead to viable and credible findings. This study will be based on the research on several

issues relating to adaptability of a balanced matrix organizational structure for a large IT project

in international banking environment. The study will also draw information and data from

previous research conducted in the field of project management through matrix form of

organization structure as this is one of main objectives of the study. Though the primary data

through sponsored study by contacting various subjects through personal interviews and

questionnaires will be ideal for the sake of hands on or firsthand experience, due to paucity of

time and limited scope of this opportunity, the secondary data alone will been relied upon for the

study. Nevertheless, this type of study as many scholars do is no less reliable as they are

invariably supported by their own primary data.

3.1 Review of Secondary Data and Analysis

Secondary research consists of the analysis of information and data gathered previously by other

people like researchers, institutions and other non-governmental organizations. The data are

usually collected for some other purposes other than one, which is being presently attempted, or

it may help both the collection of data for both the studies (Cnossen, 1997: 1). When undertaken

with proper care and diligence secondary research can prove to be a cost-effective method in

gaining better understanding of the specific issue being studied and conducting assessments of

issues that do not need collection of primary data. The main advantage of secondary data is that


it provides the basis for designing the primary research and often it is possible to compare the

results of the primary research with secondary research results (Novak, 1996: 1).

3.2 Research Design and Purpose

Data analysis and review in the secondary research method involves the collection and analysis

of wide range of information. In order to conduct an efficient research it is important that a

statement of purpose is developed first and a detailed definition of the purpose of the research is

arrived at. It is also necessary that a proper research design be evolved. The statement of purpose

is to have a clear understanding of the reasons for collecting the kind of data and the type of data

the researcher wants to collect and analyze. This will help the researcher to stay focused on the

topic under study and prevent from becoming overwhelmed with large volume of data. Research

design can be defined as a systematic plan, which shows the researcher the direction of data

collection and analysis. The secondary data review normally involves designing the outline of

what the researcher wants to study, the format of final report, list of type of data and a list of data

sources that may be used for collection of data.

3.3 Sources of Secondary Data

There are different sources from which secondary data may be collected for conducting any

social research. The sources include; (i) official statistics – include the official statistics collected

by government departments and various other agencies, trade associations, information bureaus

and other institutions like World Bank and International Monetary Fund (IMF). These statistics

are particularly useful for the researchers since these data can be obtained more easily and


comprehensive source of information that extends to longer periods. It is important that the

official statistics collected as a part of the official statistics need to be verified for accuracy and

reliability because according to Gill (1993: 15) the official statistics are “characterized by

unreliability, data gaps, over-aggregation, inaccuracies, mutual inconsistencies, and lack of

timely reporting”. (ii) technical reports – these reports represent the research works previously

carried out. They are made out to provide the results of the research to different research

institutions, government and other interested research scholars. The report may be generated

either out of a research already completed or from a research that is presently ongoing, (iii)

scholarly journals – these sources generally contain reports generated out of original research or

results of experiments conducted by scholarly people in the field. Articles in the secondary

journals are subjected to a peer review where other knowledgeable people will make a critical

analysis of the contents of the journal articles for the qualities of “accuracy, originality and

relevance”. (iv) Literature Review Articles – review of literature gather and review articles of

original research that deals with the topic under study. The reviews are normally presented by

scholars and academics in the field of study and the reviews represent the overviews written for

the first time on the topic. The review articles normally contain the list and details of all relevant

publications and articles, which formed the basis of review. (v) Trade Journals and Review

Books – While trade journals provide the practical information on the field under study the

reference books form the secondary source where the researcher can find facts or summary of a

topic discussed in detail. Handbooks, manuals, encyclopedias, and dictionaries are considered

reference books (University of Cincinnati, 1996: 1; Pritchard & Scott, 1996: 19)


3.4 Merits and Demerits of Secondary Sources

The main advantage of secondary data analysis is that it can be carried out more quickly as

compared to the formal primary data collection and analysis procedure. If the quality of the

secondary data available is relatively better, the researchers can make best use of the secondary

data rather than spending valuable time on the collection of primary data, which will save a

considerable effort on the part of the researcher. Using secondary data comparatively involves

lower cost of gathering. However, there is the element of variations in the collection of data

between different researchers, countries and settings, which needs to be considered while making

use of the secondary data for analysis as the different methods may impair the comparability.

Based on the level of data disaggregation the secondary data analysis can lead to a trend analysis

to monitor changes in the values of attributes over a period. Secondary data can often be used to

complement the primary data collection and thus will prove to save considerable time of the

researcher in collecting the primary data. Secondary data facilitates the work of a researcher who

lacks training in the collection and analysis of primary data (Beaulieu, 1992: 1).

The main demerit of secondary sources of data is that they are considered as imperfect in nature

as compared with primary data. Since there will be differences in the settings and purposes for

which the data were collected a proper interpretation and analysis is required to understand the

data presented and to use them for other purposes precisely. It is also necessary to apply

selectivity without which there will be overwhelming volume of data that will influence the work

of the researcher. It may be difficult to determine to judge the quality of some data, which are


being considered. Secondary data sources often conflict with each other. The original purpose

for which the data was collected may bias the purpose of the secondary researcher.

3.5 Justification of the Secondary Research for Current Study

However, primary data would add value to the reliability of the results of the research, in the

chosen topic of study of the adaptability of the balanced matrix form of organizational structure

for a large IT project management, there are no enough opportunities within the time and reach

of the researcher to resort to other research methods. Moreover, since the study proposed to

derive the information and data for accomplishing the objectives of this research to be obtained

from the published journal articles and research reports the secondary data become more reliable

to be used for the purpose of the research. Since there is an abundance of literature on the subject

and most of them can be considered as reliable sources the research has drawn the necessary

information and data from the secondary sources. Therefore, the secondary research has been

considered suitable for completing the study.

3.5 Summary

This chapter presented a review of the secondary research method. It is observed that secondary

data is found to be a valuable source of information for gaining knowledge and an in-depth idea

on the broad range of issues and phenomenon. It is also found, though secondary research cannot

replace primary research it is found to be useful in aiding the primary data collection. In view of

the difficulties involved in using primary data collection methods and since the reliability of


secondary sources of data is more it is justified to use secondary research for accomplishing the

objectives of this study.


Chapter 4 Findings and Analysis

4.1 Introduction

The objective of this paper is to suggest the suitability of balanced matrix form of organization

structure for a long-term IT applications migration project in a multicultural international

banking environment. With a view to achieve this objective this study extended to consider the

challenges faced by an international banking institution having branches across multiple

geographical locations that intended to migrate the large IT system taking care of its various

functions. The project was to undertake a 10-year IT migration program, migrating 10 different

IT platforms on to one platform. Currently these platforms are in 10 different countries and all

will be merged with over 3000 applications that had to be adjusted. The proposed organization

was planned to have a setup of cross-functional executives and staff consisting of one program

with five projects running horizontally. There were 20 work-streams vertical to be handled with

500 stakeholders. The project also was to have one Program Management Office, with one

quality manager, one risk manager, and one requirement manager Number of stakeholders is

immense and the matrix organization was a weak functional matrix form with people also

organizationally reporting to line management who are not within the matrix. This form of

organization structure made this extremely complex and hard to manage. It is necessary to

analyze the different problems of the functional matrix form in order to examine the suitability of

balanced matrix as an alternative form of organization. The following sections detail different

problems associated with weak (functional) matrix organization proposed to be structured for the


large IT migration project in the international banking environment, which is studied for

accomplishing the objectives of this study.

4.2 Problems with Weak/Functional Matrix Form

There were different problems associated with weak/functional form of matrix identified by the

theorists (Bartlett & Ghoshal, 1998: 21). Although each project may have unique challenges and

obstacles, many of them are common to all organizations. Theories suggest that there are

disconnects between different levels in the organization that lead to different challenges to

executives at different levels. In this case, the experiences and challenges of the middle level

managers within the matrix organization would be different from those of the top-level

executives. These differences may be the result of different managerial functions the managers at

different levels are expected to undertake and perform. For example, the responsibility of top-

level managers is to focus on the function of planning implying that their time should be devoted

towards development of new strategies for achieving the project goals. On the other hand, the

middle level managers are expected to concentrate on the implementation of the strategies

evolved by the top-level managers. Therefore, the management functions assigned to managers

at different levels would pose different challenges to the project executives. Especially, in a large

IT migration project, where the number of projects running at the same time with different

verticals, the associated challenges and problems will be too many to handle. Some of the

problems associated with the current investigation on the large IT project are enumerated in the

following sections to suggest a suitable alternative in balanced matrix form.


4.2.1 Misaligned Objectives

Knight (1977: 21) has identified the aligning of goals among different dimensions as the primary

challenge in working in a functional matrix form of organization. Dimensions in this context

include functions, products, customers, or geographic locations or any other attributes or

elements of a project. Goal alignment in a functional matrix project organization is hampered by

(i) competing or conflicting objectives between different activities of the project, (ii) inadequate

processes to have a perfect alignment of project goals and absence of mechanisms to detect any

possible misalignment, (iii) Lack of synchronization, coordination and poor timing of work plans

and objectives, (iv) insufficient communication and consultation between different functional

areas within the matrix.

In the current study with 20 different verticals, operating at the same time there is the necessity

to adopt strategies for integrating the 3000 applications. This requires the coordination of the

services of a number of programmers and functional analysts. The project will also take

considerable time before it can be analyzed for initiation. It involves significant amount of time

of the top-level executives in planning the strategies for working out the schedule for completion

and the processes to be adopted. There is the requirement manager, whose time will be utilized

mostly in planning the resources required for the execution of the project. He may not have the

time to look into how the strategies developed by him are implemented by the middle level

managers. This implies that, the managers may not be able to devote much time guiding and

directing the middle level executives, which will lead to the middle level managers operating

with different objectives with no coordination. Usually in large projects there will be processes


established to ensure that the goals and metrics are aligned. However, still there is the likelihood

for conflicting goals as the goals of one unit will be designed to reinforce the goals of other units

and therefore, slack in following the goals by one unit will have its cascading effect on the other

units affecting the progress of the entire project.

4.2.2 Lack of Clarity in Roles and Responsibilities

Confusion over the roles and responsibilities of the project team members is a problem in most

of the matrix forms of project organizations (Lawrence, Kolodny, & Davis, 1977: 49). Usually

this problem occurs with the middle level managers than with the top-level managers. Moreover,

ambiguity on the roles and responsibilities make the middle level managers frustrated and this

affects the project performance largely. Some of the reasons for lack of clarity in the roles of the

team members are (i) undefined job descriptions and guidelines covering the roles and

responsibilities, (ii) ambiguity in the roles and responsibilities lead to tension among the project

members, (iii) prevalence of confusion on the person holding the authority as the boss, and (iv)

lack of knowledge about the person to be contacted for information. As the organizations get to

change themselves to adapt for changing customer needs and preferences, it is important that the

roles and responsibilities of the project team members are adapted to the requirements of the

project from time to time (Bartlett & Ghoshal, 1998: 21; Kilmann, 1985: 155). Those employees

who are not accustomed to change would find the project responsibilities creating confusion and

uncertainty in their minds. Poor planning will lead to such a situation. It is quite usual that

organizations do a good job in defining roles and responsibilities for the top-level managers; but

there will be no clear roles and responsibilities evolved for the middle level managers and lower


level staff. “Executives expect employees at these levels to adapt to change as necessary, and

often expect employees simply to take the initiative when a new situation calls for a reaction.

Employees, on the other hand, expect clarity from senior managers during times of change” (Sy

& D’Annunzio, 2005: 3). This disconnection between the parties leads to ambiguity, which is

exacerbated when there is no alignment of the organizational goals or if the goals are unclear. If

there is no clarity on the roles and responsibilities, it will also lead to ambiguity.

4.2.3 Ambiguous Authority

The leadership rights are cleared defined in the traditional functional structure with authority

equaling responsibility (Fayol, 1949: 23). In such structure leaders take charge of the situation by

making tough calls are not accustomed to sharing of decision-making authority. This lack of

experience in collaborative style of functioning often leads to tension and conflicts as the leaders

always look for their own authority to the maximum. In the weak matrix, form managers may

have responsibility without corresponding authority, because of the dual reporting structure. For

instance in the current study the quality manager may have the responsibility for instituting a

global quality policy but may not have the authority for implementing it at the branch levels in

the international context. There are the following issues concerning ambiguity of authority may

arise in a weak or functional matrix form of organization structure: (i) lack of clarity on the

person holding the final authority, (ii) lack of clarity on areas of accountability, (iii) leaders are

not used to sharing of decision-making authority and (iv) consequent delay in the process of

decision-making. This clearly elucidates the role of culture in creating or resolving ambiguity in

authority. In an international banking environment there will be a multiplicity of cultures and it


cannot be expected that managers at all levels will react in the same way to avoid ambiguity in

authority levels. This problem should be clearly visualized and addressed, while, framing the

project organization structure. “In companies with a collaborative culture, employees appear to

be more focused on problem solving and were able to resolve the issues through informal

negotiations. Negotiation and persuasion skills are critical for matrix performance” (Hodgetts,

1868). Where there exists a political culture, employees tend to concentrate on the maintenance

of their status and power rather than resolving the project issues.

4.2.4 Lack of Matrix Guardian

While most of the companies are keen in measuring the ROI, market share and profitability, they

do not seem to be interested in measuring the performance of the matrix structure (Sy &

D'Annunzio, 2005: 4). In the absence of performance measure metrics to find out how the

company operates it becomes difficult for the managers to spot the problems and take the

necessary steps to correct the issues. It is usual that the managers often are not able to find the

issues in the structure that impede the project performance without a proper mechanism to

measure the performance of the project. The key issues associated with the matrix guardian are:

(i) absence of consequences and rewards for matrix performance leads to lack of motivation

among the employees and this affects the working of the matrix, (ii) establishing a process to

monitor to identify the problems in performance of matrix, (iii) ensuring that the top-level

managers support the matrix guardian and ensure the authority for taking corrective actions, (iv)

preserving the objectivity of the matrix guardian and preventing undue political pressure.


4.2.5 Silo-Focused Employees

One of the most critical challenges that projects face is the behavior of the project team members

(Bartlett & Ghoshal 1998: 25; Butler, 1973: 87; Goold & Campbell, 2002: 14; Joyce, 1986:

540). While organizations strive to maintain a balance between different projects and the main,

business by shuffling staff from the functional departments it creates tension among the

employees. Although such tension is one of the characteristics of the functional matrix, it

requires high level of collaborative teamwork among the project members to avoid the tension

and behave as a team.

Unfortunately, in the large IT project, there is a chance that most of the employees would be

more silo-focused. For instance, the staff from the resources department would attach more

importance and priority to their regular chore than attending to the project development work due

to the pressures from other departments. There may be lack of integration due to personal

conflicts among the managers. The issues connected with the silo-focused views of the

employees are (i) personal conflicts among the managers would lead to lack of collaboration

among the project units, (ii) it may lead to withholding of the resources from being allocated to

the project purposes, (iii) lack of trust between the employees of different units is one of the

main issues, (iv) lack of skill with the employees to function effectively in the matrix, (v)

Insufficient communication between different project units. There are two main reasons

identified for the silo-focused behavior of the project members – (i) because the employees

remain in the same function for a longer time, they tend to interact with the same group of

members and make use of the same systems. This will leave no chance for the project members


to work with the members of other units. (ii) Functional matrix form of structure requires high

degree of collaboration, which the project members would not have developed over the period.

Working in matrix form requires unique set of interpersonal skills, in the absence of which the

speed of the project may be hindered.

4.3 Analysis

With the given details about the proposed structure to handle the IT migration project for a large

international bank, it is observed that the organization has made some strides in moving toward a

matrix organization from a purely functional hierarchy. A Project Management Office (PMO)

has been put in place without giving proper attention to the project management issues during the

initial planning phase. Instead of creating a PMO to manage the migration program, the exiting

program has been inserted into a PMO. It is quite apparent that the PMO lacks authority in the

absence of a project manager to take the lead. Since the authority is divided between the quality

manager, risk manager and resources manager accountability will be problematic. There will

lack of proper communication channels and project members will be in dark about the person to

contact for information, guidance and direction. The major drawback of the structure is that the

program budgets and staffing decisions would be made within the functional set up and not

within the programs themselves. Under this structure, resources are not accountable to programs

for deliverables.

The other issue is that programs will be initiated by the functional departments and this makes

any kind of strategic alignment or project prioritization difficult. Since the project teams within

the program will be organized by the functional department within the matrix and not according


to the deliverables, there will be problems to communication because of physical and

organizational barriers between project teams.

4.3.1 Suitability of Balanced Matrix

With a view to consider quality, cost and schedule having an equal thrust a more project-friendly

“balanced matrix” may be considered for implementation of the large IT migration program in a

large international banking environment. This structure maximizes the productivity of the project

through continuous negotiations and trade-offs between a weak form and a strong form of matrix

structure. Since there is the need for increased communications and resource negotiations

between project manager and functional managers and the added complexity of the project due to

number of concurrent programs running there is a need for balanced matrix form of

organizational structure which calls for modified roles and responsibilities in the IT and business

functional departments. The continuous status reporting and enhanced staff management

activities also necessitate the institution of a balanced matrix form of structure. The most

significant part of the adoption to the balanced matrix form is the revision in the roles and

responsibilities of the project team members. It is necessary that IT functional management

shares joint staff management with program management and had to coordinate in the areas of

standards and process implementation. At the same time, the business functional management

also shares the joint staff management with the program management.

4.3.2 Steps involved in Making the Balance Matrix Organization

The following steps may be considered for instituting a proper balanced matrix form of

organization.


1. An exclusive project manager needs to be assigned to take the responsibility for the

completion of the project.

2. The role and responsibilities of the project team members need to be revised based on a

matrix document to be prepared detailing the roles and responsibilities of the project and

functional managers.

3. The process of assigning resources to roles must be approached in a collaborative way by

involving the functional management in the project initiation activities as the functional

managers will have a better insight into the skills and ,limitations of the staff

4. The performance management process is to be revised providing for periodic

performance related information to functional managers

5. A comprehensive program communication plans detailing who reports to whom and

when

6. Above all, it is essential that the support of the senior executives be obtained for the

balanced matrix form of organizational structure.

4.4 Summary

This chapter analyzed the drawbacks of the proposed weak functional form of organization

structure for the proposed IT migration project in a large international banking environment and

suggested the balanced matrix organization as the alternative proposal. This also answers the

research question.


Chapter 5 Conclusion and Recommendations

5.1 Conclusion

This study analyzed the salient features, merits and demerit of different forms of project

management organization structures. By bringing out the drawbacks of the weak functional form

of organizational structure proposed for a large IT program in the context of an international

bank. There are few lessons learnt out of this analysis. First, there must be deliberate decisions

taken about program and project organization when planning the program. The important

constraints for the program to be ascertained form the nature and complexities of the program

and different forms of organizational structures available must be considered while designing the

organizational structure. While considering the project teams the geographical locations of the

facilities and the staff should also be considered. It is necessary to maintain team integrity in a

single location. The roles and responsibilities of the team members at all levels should be clearly

defined. This includes the provision of assigned responsibilities for the functional managers who

are in-charge for taking care of the resources needed for the project. It I advisable to obtain the

agreement and sign-offs of all concerned parties to ensure the respective roles and

responsibilities are understood and agreed.

Another equally important step is to develop a comprehensive communication plan, which

supports an effective communication within and outside the programs. There must be provision

for horizontal communication flows in addition to vertical flows and the information need for the

organization as a whole is to be considered. A continuous assessment of the performance of the

project by instituting proper performance measures will also improve the quality and speed of the


execution of the project. The prevailing organizational culture especially in the case of

international bank plays a vital role in the determination of an appropriate organization structure

and this factor should be or prime consideration. Changes and adaptations to the changing

circumstances is one important thing any project manager should remember.

52. Recommendations

From the knowledge gained in the study the following recommendations are made for further

research to expand the knowledge gained.

1. A study on the performance assessment metrics being used by a large IT project would

throw light on increasing the effectiveness of the project organization structure

2. The effectiveness of the form of organization structure can also be improved through a

study on the ways to improve the cross-functional relationship between the project

managers and project managers.

3. An elaborate study on the individual factors affecting the form of organizational

structure for a large IT project would enhance the knowledge gained in this study.


Bibliography

Bartlett, C. A., & Ghoshal, S. (1998). Managing Across Borders. Boston MA: Harvard Business

School Press.

Beaulieu, J. L. (1992). Identifying Needs Using Secondary Data Sources. Institute of Food and

Agricultural Services, University of Florida.

Burns, & Whorely. (1993). Adoption and Abandonment of Matrix Management Programs:

Effects of Organizational Characteristics and Interorganizational Networks. Academy of

Management Journal , 106-138.

Burns, L. R. (1989). Matrix Management in Hospitals: Testing Theories of Matrix Structure and

Development. Administrative Science Quarterly , 349-368.

Butler, A. G. (1973). Proejct Management: A Study of Organizational Conflict. Academy of

Management Journal , 16, 84-101.

Cleland, D. I., & King, W. R. (1983). Project Management Handbook (3rd Ed). New York: Van

Nostrand Reinhold.

Clifford, G. F., & Larson, E. W. (2003). Proejct Management: The Managerial Process Second

Edition. New York: McGraw Hill.

Cnossen, C. (1997, January). Secondary Reserach: Learning Paper 7, School of Public

Administration and Law, the Robert Gordon University, January 1997. Retrieved December 17,

2008, from jura2.eee.rgu.ac.uk/dsk5/research/material/resmeth

Davis, S. M., & Lawrence, P. R. (1977). Matrix. New York: Addision-Wesley.

Fayol, H. (1949). General and Industrial Administration. London: Sir Isaac Pitman and Sons

Limited.

Fimreite, A. L., & Laegreid, P. (2005). Specialization and Coordination: Implications for

Integration and Autonomy in a Multi-Level System. Stein Rokkan Centre for Social Studies.


Galbraith, J. R. (1971). Matrix Organization Designs: How to Combine Functional and Project

Forms. Business Horizons , 14, 29-40.

Galbriath, J. R. (2000). Desigining the Global Corporation. San Francisco: Jossey-Boss.

Goold, M., & Campbell, A. (2002). Designing Effective Organizations: How to Create

Structured Networks . San Francisco CA: Jossey-Bass.

Hodgetts, R. M. (1868). Leadership Techniques in the Project Organization. Academy of

Management Journal , 211-219.

ITandOrganization. (n.d.). Chapter Two: IT and Organization. Retrieved February 25, 2009,

from Kfupm.edu: http://ocw.kfupm.edu.sa/user062/MIS51001/Chapter2%20Extended.ppt.

Joyce, W. F. (1986). Matrix Organization: A Social Experiment. Academy of Management , 29,

536-61.

Kilmann, R. H. (1985). Understanding Matrix Organization: Keeping the Dialectic Alive and

Well." In Contemporary Organizational Development," D.D. Warrick (Ed.). Glenview IL: Scott,

Forseman and Company.

Knight, K. (1977). Matrix Management. New York: PBI.

Larson, E. W., & Gobeli, D. H. (1987). Matrix Management: Contradictions and Insights.

California Management Review , 29, 126-138.

Lawrence, P. R., Kolodny, H. F., & Davis, S. M. (1977). The Human Side of the Matrix .

Organizational Dynamics , 43-61.

Might, R. J., & Fischer, W. A. (1985). The Role of Structural Factors in Determining Project

Management Success. IEEE Transactions on Engineering Management , 32 (2), 71-77.

Novak, P. T. (1996). Secondary Data Analysis Lecture Notes. Marketing Research, Vanderbilt.

Retrieved December 17, 2008, from

:www2000.ogsm.vanderbilt.edu/marketing.research.spring.1996

PM4DEV. (2007). Project Management Organizational Structures. Project Management for

Development Organizations.


Pritchard, E., & Scott, p. R. (1996). Literature Searching in Science,Technology, and

Agriculture. Westport CT: Greenwood Press.

Russell, M. (2007, January 21). Organizational Structures in Project Management. Retrieved

February 26, 2009, from Ezine Articles: http://ezinearticles.com/?Organizational-Structures-In-

Project-Management&id=424910

Sy, T., & D'Annunzio, L. S. (2005, March). Challenges and strategies of matrix organizations:

top-level and mid-level managers' perspectives. Retrieved February 27, 2009, from Find

Articles.com: http://www.entrepreneur.com/tradejournals/article/131500184_6.html

UniversityofCincinnati. (1996). Critically Analyzing Information, the Reference Library,

University of Cincinnati. Retrieved December 17, 2008, from www.libraries.uc.edu/libinfo

Weber, W. (2000, January 08). Designing Organizational Structure. Retrieved February 26,

2009, from Csupomona.edi:

http://www.csupomona.edu/~wcweber/301/301slide/ch08301/index.htm



Documents

Masterarbeit FHNW 2009 - Yvonne Meinert Fiedermann