INTRODUCTION: DIVISION OF LABOR AND ORGANIZATIONAL STRUCTURES

INTRODUCTION: DIVISION OF LABOR AND ORGANIZATIONAL STRUCTURES

Introduction

Division of labor is a management approach based on the breaking up of a process into a series of small tasks so that each task can be assigned to a different worker. Division of labor narrows the scope of work each worker has to learn enabling workers to learn new jobs quickly and providing an environment where each worker can be equipped with special tools and techniques required to do his job.

Some advantages of division of labor and specialization are:

• The fast development of a high degree of skill (specialization)

• The saving of set-up time required to change from one type of work to another

• The use of special-purpose, usually very efficient, machines, tools, and techniques developed for specific tasks.

These benefits do not come for free. Division of labor requires integration of the outputs produced by the different workers into the final product. Thus, some of the efficiency gained by specialization is lost to the additional effort of integration management required.

A common way to achieve integration is by a proper organizational structure, a structure that defines roles and responsibilities of each person as well as the inputs required and the tools and techniques used to produce that person’s outputs.

This chapter discusses division of labor in projects. Section 1 deals with different organizational structures. Section 2 focuses on the work breakdown structure (WBS) as a tool that supports division of labor in projects. Section 3 discusses the relationship between the project organizational structure and the WBS, and Section 4 presents types of work breakdown structures along with a discussion on the design of a WBS. Section 5 discusses the building blocks of a WBS, known as work packages, and Section 6 discusses how the WBS should be used and managed in projects. Finally, Sections 7 and 8 present the issues of individual learning and organizational learning in the context of the support a WBS can provide to the learning process.

Organizational Structures

Organizations are as old as mankind. Survival forced people to organize into families, tribes, and communities to provide for basic needs (security, food, shelter, etc.) that a single person had difficulty providing. Kingdoms and empires of the ancient world emerged as more formal organizations. While these organizations had long-term goals, other organizations were created to achieve specific unique goals within a limited time frame. Some ambitious undertakings that required the coordinated work of many thousands of people, like the construction of the Pyramids, Great Wall of China, or the Jewish Temple, motivated the development of ad hoc organizations.

As organizations grew larger and spread geographically, communication lines and clear definitions of roles became crucial. Formal organizations based on a hierarchical structure were established. The hierarchical structure emerged due to the limited ability of a supervisor to manage too many subor- dinates. This phenomenon, known as the limited span of control, limits the number of subordinates one can supervise effectively. The role, responsibility, and authority of each person in the organization were defined. A typical example is documented in the Bible where Moses divided the people of Israel into groups of 10 and clustered every 10 of these basic groups into larger groups of 100, and so on. The underlying assumption in this case is that the span of control is 10. Clustering was based on family relationships. Formal authority was defined and lines of communication were established to form a hierarchical organizational structure. The idea of a formal organization, where roles are defined and communication lines are established, is a cornerstone in the modern business world. Division of labor and specialization are basic building blocks in modern organizations. There is a large variety of organizational designs; some are designed to support repetitive (ongoing) operations, while others are designed to support unique one-time efforts. A model known as the organizational structure is frequently used to represent lines of communication, authority, and responsibility in business organizations.

The Functional Structure

The functional organization is designed to support repetitive activities over a long (indefinite) period of time. It is a hierarchical structure in which roles are based on the function or specialization of the workers involved. Functions like marketing, finance, human resources, engineering, production, and logistics are common. In large organizations, each function is subdivided further, to the point that a proper span of control is achieved. For example, the marketing department can be divided geograph- ically: marketing in Europe, the United States, Asia, and Africa. Engineering departments can be subdivided into electrical engineering, mechanical engineering, and industrial engineering. In a func- tional organization, the role of each organizational unit is to deal with the work content related to its function. Although fine tuning is required to define the exact border lines and interfaces between the different functions, division of labor is (naturally) along the functional lines.

An advantage of functional organization stems from the pooling together of similar resources: when all the electrical engineers are pooled together into one organizational unit, efficiency and effectiveness are achieved. Furthermore, workers in the same organizational unit (same function) share similar knowledge, education, and experience. They can learn from each other, and the flow of information within organizational units is natural. The stability of this organizational structure pro- motes career development to the point that people spend their entire career with the same organization moving up the hierarchical ladder while gaining expertise in their profession.

A disadvantage of this structure is its rigidity in dealing with complex tasks where different functions (or disciplines) must collaborate and the difficulty in introducing change. The flow of information between (different functions’) organizational units may be difficult, causing difficulty in integration. Furthermore, customers frequently have to interact with several functions—they do not have a single point of contact.

The Project Structure

The project structure is designed to handle one-time, unique, and nonrecurrent endeavors. It is based on a task force assembled for a limited time to achieve a predefined goal. The members of the project team may come from different organizational units and have different educations and backgrounds. They have a common goal—the project success; and a common leader—the project manager. Or- ganizations dealing with projects may adopt a flexible structure in which only a core group has a permanent structure while most of the organization is assigned to project groups.

An advantage of the project structure is its flexibility; the project team can be assembled exactly according to the task at hand. Another advantage is the creation of a single point of contact for the customer—the project manager has complete responsibility for the project and for customer satis- faction. Teamwork and coordination between people coming from different disciplines is easier to achieve when they belong to the same project, share a common goal, and have the same project manager.

The disadvantages of the project structure are related to its temporary nature—resources are not pooled and thus efficiency and effectiveness are hard to achieve. The limited life of the project’s organizational structure creates anxiety and uncertainty about the future role of the team members, mainly at the final stages of the project, and information between project teams is not flowing easily.

A major problem in the project structure is division of labor. Unlike the functional organization, in which division of labor is natural because it is based on the specialization of each function, in a project there is no natural division of labor. It is important to allocate the work among the project participants in a very precise way so that the schedule and budget constraints will not be violated and resources will be efficiently and effectively utilized but not overloaded. Most importantly, it should be possible to integrate the parts of the work performed by different individuals and organi- zations participating in the project and to produce the deliverables required by the customers.

In the functional organizations where division of labor is based on specialization, each function performs the same set of tasks repeatedly. Due to repetition, learning is built into the process. In a project, division of labor can take many different forms and has to be designed carefully because a project is a one-time effort and improvement by repartition is not built into it.

The work breakdown structure is the tool used to divide the project work content among individ- uals and organizations so that efficiency and effectiveness will be achieved while ensuring the inte- gration of work efforts to produce the project-required deliverables.

The Matrix Structure

Organizations involved in ongoing operations and multiple projects simultaneously develop hybrid structures that mix the functional organizational structure with the project structure. Although a large variety of such structures exist, most of these structures are based on a permanent functional skeleton and temporary project structures. Each project has a project manager (or coordinator) that serves as a point of contact for the customers and is responsible for the project success. A team that (typically) combines some members who are employed full time by the project and other members that belong to a functional unit and employed part time on one or more projects is assigned to the projects.

While the tasks assigned to each functional unit are repetitive and can be learned by repetition, the work content of each project must be defined and properly allocated to individuals and organizations participating in the project. The work breakdown structure (WBS) is the tool commonly used to ensure proper division of labor and integration of the project deliverables.