Organizational structures in project management

Organizational structures in project management
Organizational project management perceives project management from the organization’s perspective.
How can an organization influence the project performance, and return on investment by changing its structure, policies, procedures, governance bodies, tools, or even culture?
The organizational structure will strongly influence the project’s performance.
Different organizations will have different answers to critical questions such as:
Who controls the resources?
Who determines the schedule and budget?
What is the reporting structure?
PMI distinguishes organization types, according to the level of the project manager’s authority.
Basic organization types are functional, projectized, and matrix.
The matrix type can then be broken down into a strong, balanced, and weak matrix.
In a functional organization structure, also known as a hierarchical organization structure or vertical organization structure, staff is grouped hierarchically by functions, such as marketing, sales, and human resources.
The authority of the functional managers over the project is clear, with each employee having only one clear boss.
When a project manager is assigned to a project, he or she assumes the role of a project coordinator or a project expediter. In functional organization structure, projects normally occur inside a single department.
If the project spans different functions, the information and the decisions go through the functional managers involved.
This distribution of project authority through multiple managers tends to slow decisions and fragment the project into different interests, schedules, and priorities.
Additionally, because people are organized by functions, the team is typically physically separated, which constrains the team development process and leads to the development of silos.
A projectized organization structure is structured around and oriented toward projects.
Authority over each project is exclusively assigned to a project manager who has full control over the budget, schedule, resources, and work assignments.
Resources are usually allocated full-time to a single project and are frequently collocated in a common physical space.
Unlike in most organizations, resources in a projectized organization structure do not belong to a department or business function.
At the end of each project, resources are mobilized for another project, allocated to a resource pool, or released from the organization.
The matrix organization structure is the most common organization type.
It is a multidimensional organization that combines the functions vertical lines with the project's horizontal lines to better adapt to a project’s challenges.
Similar to a functional organization structure, functional managers remain responsible for their vertical functions, developing and providing the project with resources as well as technical expertise.
Similar to a projectized organization structure, the project manager in the matrix organization structure is accountable for project success. There is, however, a shared authority over the projects in the matrix organization. This sharing will naturally lead to conflicts of authority.
Depending on whether the authority is more concentrated on the functional manager or the project manager, the matrix organization structure may be classified as weak, balanced, or strong.
In a weak matrix, most of the authority belongs to the functional manager.
In a balanced matrix, the authority is evenly shared between the functional manager and the project manager.
In this organization, the project manager has to work with the functional managers to recruit, manage, and reward the team members.
Finally, in a strong matrix, most of the authority over project decisions belongs to the project manager.
After reading about functional, projectized, and matrix organization structure, you may have thought of organizations that can fit more than one of the types described.
Some organizations adopt composite structures with characteristics of different organization types, for example, a matrix organization may adopt a projectized type for a specific business line that is developing projects on the customers’ sites.

This video may also help you with your PMP certification exam or CAPM certification exam.

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00:00 Introduction
00:58 Organization types
01:52 Projectized Organization
03:27 Functional Organization, hierarchical organization, or vertical organization
05:32 Matrix organization
08:08 Comparative organization analysis
08:34 Composite organization
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