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Barriers of Project Structures’ Development

Article · January 2008

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Janusz Marek Lichtarski

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Full text printed in:
J.M. Lichtarski, Barriers of Project Structures’ Development.
Management 2/2008. Faculty of Economics and Management Press,
Zielona Góra 2008.

JANUSZ MAREK LICHTARSKI

Barriers of Project Structures’ Development
1. Introduction
The environment of contemporary organizations is getting more and more complex
and dynamic. Traditional organizational structures which are based on top-down
hierarchy, the functional division of labour, the high level of centralization, and a
number of formal rules, seem to be not effective enough in the postindustrial era (Burns,
Stalker 1961; Lawrence, Lorsch 1967; Toffler 1974; Handy 1994).
For decades, numerous experts have been forecasting the inevitable end of
hierarchical structures and a rapid growth of organic organizational forms. For example,
Toffler argued that by the year 2000, most American companies would be based on
non-hierarchical ad hoc structures (Toffler 1974). However, this scenario did not
happen, and questions arise about the reasons for this fact. Why are modern
organizational structures, based on temporary teams and task forces, are still rare in
practice? Why do we still build organizations based on traditional hierarchies, rigid task
division, centralized power, as well as formalized norms, standards, and rules?
The goal of the article is to identify the main barriers and limitations to the
development of project structures. The text is based on literature study and the author’s
own findings – questionnaire research (n=131) and case studies (n=5) conducted in
enterprises from the regions of Lower Silesia and Greater Poland regions in the period
2005-2007.

2. The Definition and Nature of Project Structures

There are as many various definitions and concepts of project structures in literature,
as many authors there are who examine this problem, therefore is impossible to present
them all. Generally, we can define project structures as modern organizational forms,
based on temporary teams or task forces which are created to perform particular tasks or
solve current problems. Those teams disappear after achieving the established goals
(e.g. Bieniok, Rokita 1984; Bielski 2002; Handy 1994; Hall 1999; Stoner, Wankel
1986).
There are three basic types of project structures described in management theory: the
pure project structure, the project-matrix structure, and the mixed one (Kerzner 2006;
Robbins 1990). In the following section their nature is presented and illustrated with
charts, as well as some advantages and disadvantages are listed.
First type is the pure project structure in which there are no fixed divisions,
departments or sections, and project managers report directly to executives who are the
only unchangeable unit within the organization. Configuration is fluent and design
depends on the number and character of projects under realization. An example of the
pure project structure is shown in Figure 1.
The major advantage of the pure project structure is that the project manager
maintains authority over the entire project, and all individuals engaged in the project
report to only one person. In consequence, conflicts appear rarely – for example if one
unit is involved in more than one project at the same time (see unit X, Figure 1). Other
advantages of the pure project structure are: strong communication channels, short
reaction time, and staff loyalty to the project.

TOP MANAGEMENT

Project Project Project Project

Manager Manager Manager Manager

Project A Project B Project C Project D

Figure 1. Pure Project Structure

Source: Author’s Own

The most visible disadvantages are: the cost of maintaining this form due to the
duplication of tasks, the tendency to complete tasks after deadlines (if individuals do not
have further projects to realize, they continue the current project as long as it is
possible), and a lack of opportunities for technical interchange and knowledge diffusion
between projects (Kerzner 2006, Nonaka 1994). The pure project structure is used
mostly in large organizations which realize huge, valuable and long-term projects e.g.
construction companies.
The next type of the project structure, called “matrix project structure” or
“temporary matrix” came into existence as a combination of functional design and
horizontal project teams (Robbins 1990). The idea is based on the typical matrix
structure – doubled subordination, balance of authority, and both vertical and horizontal
orientations. The main difference results from the temporary nature of horizontal project
units. The chart of matrix project structure is presented Figure 2.
The advantages of this organizational form are: good quality decisions due to
decentralization, strong project coordination, and effective information flow. As far the
basic disadvantages are concerned, we should point out: high administrative costs,
potential conflicts between line managers and project managers, and slow response to
change (Wilson, Rosenfeld 1990).
The matrix project structure is used in large organizations which exist in a dynamic
and complex environment or in a global market. Their activity is often connected with
advanced technologies, data and information, as well as sophisticated knowledge. To be
effective, this structure needs a special organizational culture focused on collective
forms of working and decision making, compromise, and openness.

TOP MANAGEMENT

Supply Production Sales and Finance and

Marketing Accounting

Project
Manager

Project
Manager

Figure 2. Matrix Project Structure

Source: Author’s Own

Another common organizational form is the mixed project structure. In this concept
various temporary teams coexist with a stable hierarchical form. For example, a
functional or divisional design is covered by temporary project teams, as a result of
which, the mixed form appears. An example of the mixed project structure is shown in
Figure 3.

TOP MANAGEMENT

Supply Production Sales and Marketing Finance and

Accounting

Project Project
Manager Manager

Project A Project B
Figure 3. Mixed Project Structure
Source: Author’s Own

The major difference is that project managers can be located on various

organizational levels (both in the pure and matrix project structure they report directly
to the top management) and there is no clear subordination. Organizational hierarchy is
replaced by heterarchy. We can define heterarchy as a situation when there are
numerous temporary authority centers on different levels of the organization and they
change as tasks are completed. Since the situation is new and unknown, some people
find it extremely difficult to handle.
According to the author’s own findings, the implementation of project teams and
tasks forces is simpler and easier in an organization with a matrix structure rather than
with a functional or divisional one. Some mechanisms are similar, e.g. breaking the rule
of the unity of command, so people get used to having more than one supervisor and to
receiving different orders.
All the project structure types mentioned are contradictory to the traditional design
and closer to the organic model presented by Burns and Stalker or Mintzberg’s
adhocracy form. The characteristics of the mechanistic and organic model of the
organizational structure are shown in Table 1.

MECHANISTIC ORGANIC
CHARACTERISTIC
STRUCTURE STRUCTURE
Definition of tasks Strict and rigid Flexible
Number of levels of management High Low
Communication control Vertical and formal Lateral and informal
Control Centralized Diverse (self-control)
Influence Formal authority Expertise
Managerial focus Loyalty Effectiveness
Number of procedures High Low
Formalization of rules High Low
Table 1. Characteristics of Mechanistic and Organic Structures
Source: T. Burns, G. M. Stalker: Management of Innovation. Tavistock Publications, London
1961, p. 119-122.

To conclude, the project structure can take various forms. All of them seem to be
designed for knowledge-based organizations that operate in a dynamic and complex
environment, employ innovation-oriented strategies, realize sophisticated tasks and use
advanced technologies.
3. Barriers and Limitations
The development and spread of project structures is limited in spite of external
factors, such as technological development or global market competition, which
catalyze the transformation of traditional organizational structures into more organic
forms. There can be various reasons for this situation. It can result for instance from
modern and unknown nature of organic structures, or from human factors and
limitations of the individual’s perception. Thus, six barriers are discussed in this section.
The list is based on the results of empirical research mentioned before, and on no
account should it be treated as complete or closed.
3.1. Competence Regulation Problem
Thanks to its stability and certainty, the traditional organizational structure enables a
logical and rational distribution of tasks and duties within organization. Nevertheless,
as a result of the changeable nature of project structures a new problem appears, namely
that of dividing duties, working time and resources. It gets even more complicated when
project members simultaneously realize their regular duties and tasks connected with
the project (this problem appears mainly in mixed project structures). In the
questionnaire mentioned in the introduction over 52 per cent of respondents declared
that they faced the problem of perform both their regular duties and those related to the
project. This difficulty, along with communication and motivation issues, is one of the
most important problems identified in the survey.

3.2. Boundaries Among Projects

One of the most frequently quoted weaknesses of the traditional structure is its
vertical (between organizational levels) and horizontal (between functional units)
boundaries. They make communication, coordination and cooperation processes more
complicated, slow down internal flows, and lower organizational efficiency.
Many concepts in management theory were dedicated to breaking boundaries and
making the organization more flexible. Hammer and Champy designed the process-
oriented structure focused on horizontal coordination. Basic units are formed around
major processes within an organization and as a result, horizontal walls disappear
(Hammer, Champy 1996). Peters and Waterman insisted on flattening the
organizational hierarchy and breaking the vertical and horizontal boundaries, with a
stronger emphasis put on shared values, communities, etc. (Peters, Waterman 1982).
The authors of “The Boundaryless Organization” suggest that the organization of the
future is designed in a different way than the traditional one. The main idea is to
eliminate all boundaries – both internal (horizontal and vertical), and external obstacles.
It guarantees undisturbed flows of people, material resources, finances, as well as of
information and knowledge within the organization and between the organization and
its environment (Ashkenas 2002).
Is the project structure free from boundaries? When we read various descriptions of
the project structure concept, we can believe that it is. In order to prove its strengths,
most authors point to the non existence of “functional silos”. Does it really mean that
there are no boundaries at all? The results of the author’s questionnaire study show
another perspective. While functional boundaries do not exist in project oriented
organizations, strong boundaries can be found between particular projects in most of the
examined organizations. Their existence was indicated by more than a half of the
respondents. Thus, sometimes project managers competed with one another (almost one
third of them) in order to gain access to limited resources – specialists, equipment or
money. The same conclusion was made on the basis of the observation and interview in
large international corporation.

3.3. Low Acceptance of Multi-subordination and Heterarchy

One of Fayol’s fourteen rules – the unity of command – has been consciously
broken in the project structure. Performing complex and complicated tasks (or problem
solving) needs various perspectives, so employees receive instructions from more than
one supervisor. Double subordination (or multi-subordination) is the situation that
individuals are not comfortable with. For many years we have got used to the clear
subordination system - there was always one leader in a tribe, one king in a kingdom, as
well as one god in most religions. The hundreds of years of pyramidal hierarchies
resulted in our low acceptance of more complex forms like heterarchy. The findings
prove that individuals do not or hardly accept complex and unstable configurations -
about 40 per cent gave this answer.

3.4. Lack of Opportunities for Safety Needs Fulfillment

Needs for safety and stability refer to the security of working conditions, the
stability of the individual’s position in the organizational hierarchy, and the
predictability of tasks and payments. According to Maslow’s motivation theory, safety
needs are among the most fundamental human needs. Is the flexible project structure
able to guarantee safety needs fulfillment if relations are temporary, teams perform
short-term tasks, and general conditions are changeable? The situation seems to be
totally different from that in stable hierarchical organizations, where duties and relations
are constant, organizational roles are strictly defined and unchangeable (clear division
into managers and subordinates), etc. How to deal with the low level of certainty?
Leavitt maintains that a mixed structure with a certain of stable hierarchical units and
some temporary teams could be an acceptable answer (see e.g. Leavitt 2003; Bielski
2002).

3.5. Complex and Changeable Nature of Project Structure

On the whole, in terms of organizational flexibility (ability to adjust quickly to new
conditions) the changeable structure is treated as a great advantage, especially in a
dynamic environment of low predictability. A problem appears, however, when it
comes to describing the temporary and changeable project structure or to drawing the
organizational chart. How to draw or describe such an unstable phenomenon?
Psychologists prove that we are afraid of complex and hard to explain phenomena,
while simple solutions are accepted very easily (Aronson 1994). To describe and
explain the project structure nature and mechanisms, the static perspective seems to be
inappropriate. Therefore we should examine the project structure from a dynamic point
of view, analyzing continuous changes in its structural dimensions – configuration,
specialization, centralization, standardization, and formalization. In most of the
examined companies both managers and employees stressed the complex and dynamic
nature as one of the major disadvantages of project structures.
 3.6. Problems with Knowledge Creation and Exchange
Although, the flexible organizational structure based on temporary teams facilitates
task performance, it poses difficulty in organizational knowledge creation and share.
Specialists and experts engaged in projects are members of different teams and they
focus on goals, dates, and budgets, rather than on creating knowledge and sharing
experience. There is no place, tools, and motivation for such an exchange. Individuals
meet to perform particular tasks or solve problems, and after completing the tasks,
everyone goes their own way taking the knowledge and experience with them.
In a traditional organization specialists in the same discipline, even if they work on
different projects, they share rooms, report to the same supervisor, have common
meetings, etc. In the organic structure they do not have time or place to generate new
organizational knowledge and share their experience. This is an important barrier to the
development and spread of project structures in the era of information and knowledge
(Senge 1990, Handy 1994, Morgan 1986). Nonaka argues that the hierarchical core is
required in an organization for knowledge creation as well as for an exchange of
experience among specialists. In consequence, his response is a hypertext organization,
which combines the efficiency and stability of a hierarchical organization with the
dynamism of the flat, cross-functional task-force organization (Nonaka 1994).

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