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Associations and Project Organizations in Business


The organization is structured according to functional areas instead of product lines. The functional structure groups specialize in similar skills in separate units. This structure is best used when creating specific, uniform products. A functional structure is well suited to organizations that have a single or dominant core product because each subunit becomes extremely adept at performing its particular portion of the process. They are economically efficient but lack flexibility. Communication between functional areas can be difficult.

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The fact is that Freeman is a useless team member, as is stated in the case study. But the post of a statistician is one of the key jobs in the company, as it is claimed to control the work of the whole organization. He must follow the activity within and out of the corporation to have the full image of the effectiveness. To avoid the arrangement of a huge IT department, the job of a statistician is required to be saved, but to solve the conflict within the team it is necessary to impose some additional obligations to Freeman:

  • Quality control
  • Market trends following
  • Promotion of the company
  • Work with potential customers

At first, it may seem that it is impossible to combine these jobs, but if Freeman wants to be useful for the team, and the company is interested in keeping his personality, the best way is to send him to extension courses, or for traineeship to the corresponding department (dependently on the selected occupation).

The design department is rather extended. And the similar case studies stipulate that the rank of controller here is unnecessary as if the department works effectively, his work is not required; if the department can not cope with the task – the controller will not solve the problem of effectiveness, as it is the matter of proficiency, encouragement and wish to go on working (at a project in particular, or in the company in general). And the commitments of control may be imposed either to the styling manager, or the whole company jointly (it is meant, that if the design department works efficiently, the sales and the cooperation with the clients will increase).

In this case, the organizational structure would stay the same, with the following exceptions:

  1. A statistician would get additional commitments, and be sent for training, or another person will be employed with extended obligations
  2. The controller is a useless job, as his task is to gather the information, which is known to every team member.


In conclusion, it is necessary to mention, that organizational arrangement depends on the product to be elaborated. Some researchers classify a range of organizational structures between two intense, functional associations and project organizations. Functional organizations are organized according to technological controls. Senior handy managers are responsible for allocating reserves. The accountability for the total product is not assigned to a single individual. Harmonization takes place through rules and processes, detailed requirements, shared customs among engineers, and conventions. Products that require a high level of particular skills necessitate a functionally arranged structure.


Innovation and change. A motor corporation Managing dynamics process. pp. 433-436.

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