BUS603: Managing People

According to Kerzner, twelve factors should be taken into account when selecting the appropriate structure. These factors are "uncertainty, technology, size, duration, complexity, importance, customers, interdependency within and interdependency between, criticality of time, criticality of resources and differentiation". Following a deep study on the 12 factors in different structural forms, Kerzner was able to identify the relative status of each factor in each of the organizational structures. Organizations aiming at selecting the appropriate structure for managing a project should take into account the compatibility of each factor status with project good performance. For example, if the organization is operating in a stable environment with little uncertainty, the functional or weak matrix might be a good choice. However, monitoring the level of uncertainty alone is not sufficient, as the relative effect of the other twelve factors should be taken into account when deciding on the best structure. Mishra and Soota claimed that the functional structure is only effective in a stable environment with routine and continuous tasks.

This structure allows the project to lose its bigger image and be in a narrow view. It brings many problems to projects due to the delayed decision-making that slows down the project pace. On the other extreme, multidisciplinary structures like the project-based structure provide clearer accountability and authority that speeds up the whole process. Such types of structures can be very demanding in terms of the human resources and that's why it is recommended for big projects.

However, in case a compromise is needed, the matrix structure is the best fit where it minimizes the need for a large number of staff, while empowering project managers. Other authors like Shikha introduced five principles for effective organizational design. These principles encompass division of labor, unity of command, authority and responsibility, the span of control and Contingency factors.

In this respect, it is significant to highlight a very important research conducted by Larson and Gobeli on the use and effectiveness of project management structures in the construction and new product development field. This research was conducted in more than 14 countries in Europe and it aimed at studying the effectiveness of project management structures across different countries (Figure 1).

As depicted in Figure 1, in the construction projects, the strong matrix was ranked as most effective followed by the pure project-based. In the new product development projects, the pure project was ranked as most effective followed by strong matrix then balance matrix. The study that tackled the case of 540 development projects found that over 50% of projects applying the project based and Strong matrix met their schedule successfully, 42% of projects applying the balanced matrix met their schedule successfully, 36% of those applying the weak matrix and 25% of those applying the functional structures met their schedules successfully. On the cost index side, the results showed that over 50% of projects applying the balanced matrix were completed on budget, 47% of projects applying the project-based structure and 46% applying the Strong matrix were completed on budget while only 25% of projects applying the functional and weak matrix structure were successful in meeting the budget. On the quality performance index, over 70% of projects applying the Strong matrix, project based, and balanced matrix achieved successful results while 50% success rate was recorded for projects applying the weak matrix and the functional structure. The overall results of this important research showed that the functional structure and the weak matrix provide the least successful performance of the project's key indicators in terms of time, cost and quality deliverables. The Strong matrix, the project based and the balanced matrix tend to be successful with slight differences but the balanced matrix tends to be less successful in terms of the time index but it is still better than the functional structure and weak matrix structure. Based on the above theories, this research made the following assumptions to be tested throughout this study:

Hypothesis 1: A relationship exists between the NGOs' project structure and its performance.

Hypothesis 2: The pure functional, weak and balanced matrix are the least effective structures for managing NGOs' projects.

Hypothesis 3: The pure project and strong matrix are the most effective structures for managing NGOS' projects.