Project Management Organizational Structures

Editor's Notes

1. Welcome to the ever evolving, dynamic 24x7 world of project management Why Study PM? It is how stuff gets done.
2. A hierarchy where each employee has one clear superior is called a Functional Organization. Staff members are grouped by function, specialty, or expertise. The project scope of these organizations are usually limited to the boundaries of the function it is organized by. Each function is managed independently and has a limited span of control. As an example, the organization might have IT, HR, Finance and Marketing departments, and so on. IT does not run Marketing’s projects and is concerned with its own projects. If it were necessary to get input from Marketing on a project, IT members would follow the chain of command. An IT manager would speak with a Marketing manager and get the needed information and pass it down to the project team.
3. The dotted lines on the graphic represent where the Project Manager coordinates projects and the gray boxes represent staff engaged in project activities. In a Functional Organization a Project Manager has little to no authority over resources availability and acts more as a project coordinator. Projects in a Functional Organization are undertaken by two approaches: Divided: Where a department will work on their portion of the project and hand it off to the next department to complete its part, and so on. Cross Functional: Where members of different departments work together at the same time on various aspects of the project. Project Team Members will more than likely remain loyal to their Functional Managers. The Project Manager has little or no authority in a functional organization due to the following: Staff members report directly to Functional Managers A strict chain of command exists Corporate culture dictates that you follow the functional hierarchy
4. In a Projectized Organization most of the organizational resources are involved in project work rather than operations. Projectized organizations often have organizational units called departments, and these groups either report directly to the project manager or provide support services to projects. Teams consist of staff members from a variety of disciplines and specialties. These teams are formed and often collocated; physically working in the same place.
5. In a Projectized Organization Project Managers are responsible for making project decisions and acquiring and assigning resources. They have the authority to assign resources from other areas within the organization or hire from outside. Project teams have the potential of dissolving upon completing of a specific project. Project Managers have ultimate authority over the project in this structure and report directly to an executive level.
6. Weak Matrix Organizations share many of the same characteristics of a Functional Organization where the Project Manager has limited authority and is more of a coordinator or expediter than that of a manager.
7. Weak Matrix Organizations share many of the same characteristics of a Functional Organization where the Project Manager has limited authority and is more of a coordinator or expediter than that of a manager.
8. The Balanced Matrix Organization recognizes the need for a Project Manager. While it does not provide the Project Manager with full authority over the project and project funding. There is a balance of power between the Project and Functional Managers. Each manager has responsibility for their parts of the project or organization, and employees get assigned to projects based on the needs of the project, not the strength or weakness of the manager’s position.
9. Weak Matrix Organizations share many of the same characteristics of a Functional Organization where the Project Manager has limited authority and is more of a coordinator or expediter than that of a manager.
10. Problems Groupthink Going Native Bureaucratic Bypass Syndrome Team Spirt Becomes Team infatuation.
11. Erik W. Larson & David H. Gobeli examined the performance of different organizational structures with regard to the schedule, cost and technical performance of 540 development projects in 1987-88. The industries represented in the survey were pharmaceuticals, aero-space, computer and data processing products, telecommunications, medical instruments, glass products, petrochemical products, software development and household goods.