Types Of Organizational Structures – Must Read Concept for PMP

Organizational structures explains your organization culture in terms of classifying and organizing the project between functional and project streams.

How you and your team are working, is overly dependent on the organizational structures and the environment that you are working in.

Project success is largely depends on project manager and the team work.

To perform appropriate project management activities, project manager should be placed in the right type of organizational structures.

There are different types of organizational structures from project management perspective. Primarily they differ on the power and authority provided to the project managers.

This blog post emphasizes these different types of organizational structures and its impacts over projects.

The type of organization you are working for has a big impact on the project management. Organizational structures are classified in to the below three categories primarily.

• Functional organizations
• Matrix organizations
  • Strong Matrix organizations
  • Balanced Matrix organizations
  • Week matrix organizations
• Projectized organizations

Types of Organizational structures

The types of organizational structured are explained below in the subsequent sections.

Functional Organizations

Organization is grouped by areas of specialization or domains or departments.

Projects generally belong to a single department. Furthermore any help required from any other department will be routed through senior management to the department head.

In functional organizations, team members work on projects, in addition to the departmental work.

Unlike projectized organizations, project managers have least power and authority in functional organizations.

Functional Manager will have the greatest power and authority over any activities or resources. In many cases, project manager would report to functional managers.

In functional organizations, you would see project manager playing roles such as project coordinator or project expediter.

Projectized Organizations

Projectized organizations can be visualized in a sharp contrast to functional organizations.

Entire organization is organized by projects. Team members report to project manager for a specific project.

Once the project is completed, the team members would be released from the current project. And they would be added to the resource pool to allocate to other projects.

Communication is generally limited with in the project team.

In this kind of organizations, project Manager will have at most power and authority. And project managers will have full control over the project and the resources during the project life cycle.

Matrix Organizations

Matrix organizations are mix of both functional and projectized to maximize the benefits of both the organizations. And in matrix organizations, team members report to both project manager and functional manager.

Week Matrix Organization

This is more like a functional organization.

In the week matrix organizations, Project manager will have little more power compared to functional organizations.

Most likely Project manager reports to functional managers in these kind of organizations.

Project managers play a role of Project coordinators and expediters.  In other words, their work will be limited to project coordination, status tracking.

Eventually power remains with functional manager.

Balanced Matrix Organization

In the balanced organizations, both functional and project managers have equal powers.

Usually functional manager will head his departmental work.  And the project manager will focus on the project completion.

Project manager will have more power and authority to manage the projects. And the project manager will take project related decisions independently.

However for resources related requests, project manager needs to consult functional managers.

Strong Matrix Organization

Eventually project manager have complete power and authority over the project constraints. However functional manager would have control on the resources.

Strong matrix organizations are similar to Projectized organizations with an exception that functional managers also exist in the organization.

So, project manager would report to someone in PMO or senior project managers.

In functional or weak matrix organizations, you would see the project roles such as project expediter and project coordinator.

Project Expediter

Primarily Project expediter has the following responsibilities.

• Coordinates meetings with the team
• Record the status time to time
• Update the management and other stakeholder about the project status.

And he does not have any authority on project to make any decisions.

Project Coordinator

Project coordinator is someone similar to project expediter, except to that they generally report to someone in the top management.

Unlike project expediters, project coordinators has a little bit of authority to make decisions on the project.

Tight matrix organizations

Tight matrix organization is a confusing terminology.

It does not have anything to do with organizational structures. And it simply means, collaborate the project team into a single room.

So, if you see one of the answers as tight matrix organizations in the PMP exam questions related to type of organization structures, that is easy to eliminate.

Conclusion

To Summarize, We looked at different types of organizational structures namely

• Functional organizations
• Matrix organizations
  • Weak matrix
  • Balanced matrix
  • Strong matrix
• Projectized organizations

As you are aware, the project management power and authority will be more in matrix and Projectized organizations.

We also have seen that the roles such as project expediter and project coordinator exist in functional and weak matrix organizations.

Let us now, answer few questions to test your understanding on the concepts…

Question and Answers

1. To start with, we are looking for a candidate who can join us to work with our development manager to deliver the products to the customer on time. Also project has a team of developers and development manager who are working on ground to fulfill these customer requirements. Eventually we need a person, who can work with the team and development manager to coordinate the meetings, track the status and update the status to the relevant stakeholders. So, which type of organizational structure we are talking about?
   1. Functional
   2. Matrix
   3. Projectized
   4. None of the above
2. We are looking for an efficient person, who can manage the whole show starting from collecting requirements from the customer, managing the project constraints. Also he is fully responsible and accountable for the output of the project. All project staff will report to the candidate. When the project is completed, project staff will be released from the project. Which type of organizational structure we are talking about?
   1. Functional
   2. Matrix
   3. Projectized
   4. None of the above
3. We have a complex and prestigious project coming up. Our top developers and development manager will work on this project. Thus we need a manager who can work for the project management related activities to manage project schedule, time, cost and other project constraints. Also he needs to work with the development manager for people management responsibilities. Which type of organizational structure we are talking about?
   1. Functional
   2. Matrix
   3. Projectized
   4. None of the above

So, if you think, you have understood the concepts in this article clearly, let me know your answers by commenting below, for the above 3 questions.