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ACCA Applied Knowledge · Business and Technology · Business organisational structure

An engineering firm sets up project teams for each major contract. Team members stay in their functional departments, such as design and procurement, but also report to a project manager for the duration of the contract. Which of the following is a recognised disadvantage of this structure?

The structure described is a matrix, and its recognised disadvantage is that dual reporting can cause conflicting instructions and unclear authority. Employees answer to both a functional manager and a project manager, which may create confusion, stress and conflict over priorities and resources.

  1. AEmployees lack any specialist expertise because functions are abolished
  2. BOnly one line of authority exists, causing slow communication
  3. CThe structure cannot be used for temporary tasks
  4. DDual reporting can create conflicting instructions and confusion over authorityCorrect

Explanation

This is a matrix structure, where staff report to both a functional manager and a project manager. The key weakness is conflicting demands and unclear authority. Functions are retained, so expertise remains, and matrix structures suit temporary projects.

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