Die approbierte Originalversion dieser Diplom-/ MasterarbeitMSc Programist in der Hauptbibliothek der Tech- nischen Universität Wien aufgestellt und zugänglich. Engineering Management http://www.ub.tuwien.ac.at The approved original version of this diploma or master thesis is available at the main library of the Vienna University of Technology. http://www.ub.tuwien.ac.at/eng Agile software development within the flat organization Case study: Evaluating the implementation in a small tech start-up A Master’s Thesis submitted for the degree of “Master of Science” supervised by Dr.LarryStapleton Orthodoxia Papachartofyli 01646734 Vienna, 10.01.2018 Affidavit I, ORTHODOXIA PAPACHARTOFYLI, hereby declare 1. that I am the sole author of the present Master’s Thesis, "AGILE SOFTWARE DEVELOPMENT WITHIN THE FLAT ORGANIZATION - CASE STUDY: EVALUATING THE IMPLEMENTATION IN A SMALL TECH START-UP", 88 pages, bound, and that I have not used any source or tool other than those referenced or any other illicit aid or tool, and 2. that I have not prior to this date submitted this Master’s Thesis as an examination paper in any form in Austria or abroad. Vienna, 10.01.2018 Signature ACKNOWLEDGEMENT I would like to express my endless gratitude to my professor and supervisor, Dr. Larry Stapleton for his constant patience, guidance and valuable insights throughout the process of writing my thesis. To my husband, Costas, whose love and support made the completion of this thesis and this master program possible. And to our daughter Lydia, who patiently waited for this thesis to be completed before making her appearance into this world. Abstract The present study focuses on giving a short overview of different organizational structures and of most famous Agile frameworks, in order to provide a background context for conducting research in a small software company. By focusing on a specific software company, the study aims to assess the effectiveness of the organizational structure selected for this company and if and how this structure relates to the success -or not- of Agile implementation. The population of the study includes the aforementioned software company and the participants are 28 employees of this company and the 3 people of whom the company's leadership consists. The literature review of Agile, the differences, advantages and disadvantages of each organizational structure as well as the personal professional experience of the author in the company as well as in the field of Agile helped formulate the objectives and research questions of this study. A questionnaire was designed and provided to the 28 participants and follow-up clarifications, comments and interviews with the leadership were conducted when needed. Literature review demonstrates that choosing the appropriate structure to fit the organization or having the ability to adjust it as efficiently when needed, is crucial for every organization. By analysing the questionnaire results and assessing important findings revealed during the interviews, the study revealed that the employees and the company’s leadership perceive the simplicity of structure of the company as a factor that contributes to the successful operation of the company, as they feel it aids in establishing direct communication, cooperation, adaptability, fast decision-making and cross-functionality that are needed in order for Agile software development practices to succeed. Keywords: Organizational structure, hierarchy, Agile software development, flat structure, Scrum, Kanban Table of Contents Chapter 1: Introduction 1.1 Statement of the problem ..................................................................................................... 1 1.2 Significance of the study ...................................................................................................... 2 1.3 Contribution ......................................................................................................................... 3 1.4 Research purposes ................................................................................................................ 4 1.5 Research questions ............................................................................................................... 4 1.6 Outline of study ................................................................................................................... 5 Chapter 2: Theoretical Background and literature review of organizational structures 2.1 Introduction .......................................................................................................................... 6 2.2 Theoretical background ....................................................................................................... 7 2.2.1 Fundamental Processes - Division and Coordination of Labour .......................... 7 2.2.2 Key elements of organizational structure ............................................................. 8 2.2.3 Contingency theory ............................................................................................. 10 2.3 Organizational Structures .................................................................................................. 12 2.3.1 Functional structure ........................................................................................... 13 2.3.2 Divisional Structure ............................................................................................ 15 2.3.3 Matrix Structure .................................................................................................. 19 2.3.4 The Process Structure ..................................................................................................... 22 2.3.5 The Network Structure .................................................................................................... 24 2.4 Tall and Flat structures ...................................................................................................... 26 2.5 Summary and Conclusions ................................................................................................ 30 Chapter 3 : Theoretical Background and literature review of Agile 3.1 Introduction ........................................................................................................................ 32 3.2 What is Agile? ................................................................................................................... 33 3.2.1 Traditional Software Development Process - Waterfall ..................................... 33 3.2.2 Agile Software Development .............................................................................. 34 3.2.3 Agile Terminology .............................................................................................. 35 3.3 Agile methodologies .......................................................................................................... 37 i 3.3.1 Scrum .................................................................................................................. 37 3.3.2 Kanban ................................................................................................................ 39 3.4 Common practices of Agile teams ..................................................................................... 42 3.5 Agile and Organizational Structures .................................................................................. 45 3.6 Synthesis of Hypotheses .................................................................................................... 46 3.6.1 Research Propositions ......................................................................................... 47 3.7 Summary and Conclusions ................................................................................................ 47 Chapter 4: Methodology 4.1 Introduction ........................................................................................................................ 49 4.2 Research method ................................................................................................................ 49 4.3 Data collection instruments................................................................................................ 51 4.3.1. Questionnaire format ......................................................................................... 51 4.3.2 Informal Interviews Format ................................................................................ 52 4.4 Participants ......................................................................................................................... 52 4.5 Analysis and Interpretation of Questionnaire Results ....................................................... 53 Chapter 5 : General Observations and Data Analysis 5.1 Introduction ........................................................................................................................ 54 5.2 Background and context: The Company ............................................................................ 54 5.3 Background and context: Agile software development ..................................................... 54 5.3.1 Agile practices used ............................................................................................ 55 5.3.2 Agile variations and modifications ..................................................................... 56 5.4 Background and context: Organizational structure of the company .................................. 56 5.5 Interview Data ...................................................................................................................