Blog Project Management Defining and Identifying Organizational Type

Defining and Identifying Organizational Type

Organizational Influences on Project Management:
Your approach on project management may vary based on the type of Organization you working for. Organizations may be structured in a traditional or functional manner or in a Projectized structure. Your project manager authority and resource availability will depend on the given type of organization.

Organization culture, style, and structure influence how projects are performed. An organizations degree of project maturity and its project management systems can also influence the project. As a project manager you should know under what type of organization you are working. It is very imperative for a project manager to know his or her authoritative power and that it can differ from organization to organization or from project to project.

As a project manager, you should know about these organizations and particularly the authority and power of the project manager in these organizations.

Organizational Structure:
As per PMBOK 5 there are four types of organization.

  • Functional Organization
  • Matrix Organization
    • Weak Matrix Organization
    • Balanced Matrix Organization
    • Strong Matrix Organization
  • Projectized Organization
  • Composite Organization

Overview of Organizational types &their differences:

Function

Functional

Weak matrix

Balanced Matrix

Strong Matrix

Projectized

Project Managers Authority

Low or Zero

Limited

Low or Moderate

Moderate to High

High to almost total

Resource Availability

Low or Zero

Limited

Low or Moderate

Moderate to High

High to almost total

Project Manager’s Role

Part-time

Part-time

Full-time

Full-time

Full-time

Project Budget Control

Functional Manager

Functional Manager

Functional Manager+ Project Manager

Project Manager

Project Manager

Project Management Administrative Staff

Part-time

Part-time

Part-time

Full-time

Full-time

Functional Organization:

  • Functional organization is a traditional organization structure where authorities are divided based on the functions performed by that particular group of people, such as finance, HR, marketing and purchase etc.
  • Power and Authority stands with the functional manager.
  • The functional manager reserves the authority to release the resources based on their knowledge and subject matter expertness.
  • The resources working in this kind of organization reports to the functional manager.
  • Project manager having very less power in this kind of organization. Job security exists in functional organization. Once project get over and the resources can be transferred to other project or routine work.
  • Skills of project manager are very less utilized here.
  • The resource assigned as the “project manager” is usually a team member within a functional area and does not have the title of project manager.
  • The functional manager will control the budget and the “project manager” will act more as a coordinator or expediter of project activities rather than having true project management responsibilities.
  • Resources for the project will need to be negotiated for with the functional managers and the accessibility of those resources will be based on business conditions.
  • Any type of escalations of issues would need to be made to the functional manager.
  • Because the “project manager” has low to no authority, the project can take longer to complete than in other organizational structures and there is generally no recognized project management methodology or best practices.

Projectized Organization:

  • Majority of the organization’s resources are involved in project work and the project work is generally completed for the benefit of an external customer.
  • Indeed Projectized organization is a great organization for project managers.
  • Power and authority stands with Project Manager in this type of organization.
  • There is no home after the project is adjourned.
  • There is no job security in this type of the organization.
  • Project manager can utilize project management skill set completely.
  • Project manager have the complete resource allocation authority.
  • The project manager has authority and control of the budget and any escalation of issues
  • Project resources report into the project manager versus the functional area, there may be a decrease in the subject matter expertise of the team members.

Matrix Organization:
There are three types of matrix organizations. The power of the project manager differs in these three matrix organizations.

  • Strong matrix
    • Power is enjoyed by the project manager more than the functional manager.
    • PM can take decision on the allocation of the resources
    • PM can utilize his or her project management skill on the projects.
  • Weak matrix.
    • Power enjoyed by the functional manager completely.
    • Project manager works like a project coordinator or project expeditor.
    • Project coordinator can take decision on the allocation of the resources
    • Project expeditor works only like communicator point between the customer and team.
  • Balanced matrix
    • Powers enjoyed by the functional as well as project manager are in the same manner.
    • Resources working on the project face a complex communication.
    • It is not clear – whom to report and who is the real boss.

Composite Organization:

  • Functional organization may create a special project team to handle a critical project.
  • Teams have characteristics of project team in Projectized organization.
  • Team may include full time staff from different functional department.
  • Team develops their own set of operating procedures, and operates outside of the standard, formalized reporting structure during the project.
  • Organization may manage most of its project in strong matrix.
  • Small projects to be managed by functional departments.

Questions & Answers

  1. You are a project manager in a large organization that uses a matrix structure for projects. You have been asked to investigate what organizational structures your competitors use and how this affects their ability to manage project successfully. How would you describe the MAIN difference between a matrix organization and functional organization?
    • In a functional organization, project managers have more authority than they do in a matrix organization.
    • More people work full time on projects in a functional organization than a matrix organization.
    • Project team members usually report to two bosses in a matrix organization; the functional manager and project manager.
    • Most companies have found that functional organization structure provide the most flexibility for managing projects.

    Correct Answer: C

  2. Which type of organization is BEST for managing complex projects involving cross disciplinary efforts?
    • Projectized
    • Functional
    • Line
    • Matrix

    Correct Answer: D

  3. The policies, methodologies and templates for managing projects within the organization should be supplied by the
    • Project Sponsor
    • Functional department
    • Project management office
    • Project manager

    Correct Answer: C

  4. Which form of organization retains many characteristics of a functional organization and treats the project manager’s role as more of a coordinator or expediter than a manager?
    1. Projectized
    2. Functional
    3. Strong matrix
    4. Weak matrix

    Correct Answer: D

  5. A Project manager trying to complete a software development project, but cannot get enough attention for the project. Resources are focused on complementing process – related work and the project manager has little authority to properly assign resources. What form of organization must the project manager be working in?
    • Functional
    • Matrix
    • Expediter
    • Coordinator

    Correct Answer: A

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About Sparsh Goyal

A passionate IT professional, Sparsh Goyal boasts of 4.3+ years of experience. He has worked for various projects under AWS, Google Cloud Platform, Spring Boot, Python, Microservices, RESTful, RESTFUL APIs/SOAP, Scripting, Shell and JAVA. He is also working towards gaining proficiency in Oracle Cloud PaaS, DevOps, SaaS and Docker/Kubernetes. His primary and secondary skills validate his relentless pursuits of expanding his horizon and developing more as an IT person. He boasts of the following certifications: *Google Professional Cloud Security Engineer. *AWS Cloud Solutions Architect Associate. *Oracle certified JAVA programmer.
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