Organizational Structures

It is very important for a project manager to understand the type of organization, he is going to work in, before he starts planning for the project. This is so much emphasized upon as organizational structure/type can have a significant impact on the project planning and execution. There are following three types of organizations:

1. Functional: This is the most commonly found structure in organizations. such organizations are grouped in different departments based on their functionality, for example, accounts, logistics, administration, human resource, sales, marketing, etc. Projects in such organizations are done in a ‘silo’. What this means is that project manager and the team are all from the same department and the information about the project remains within the boundaries of the department. The team works on the project along with the normal departmental work. If help or information from another department is needed then a request is sent to the head of the department who communicates the request to the other department head. Project managers have little or almost no authority in such organizations as the project team reports to related  supervisors, hence, not many chances to prove your skills as a project manager, so no career path in project management. Since the project team has to work on their normal departmental work as well, so their interest in the project is not up to the mark which results in very less interest in the project.
2. Projectized: As the name suggests, this organization is grouped by projects headed by the project managers and their teams. The team reports to the project manager directly so the project manager is most authoritative in this kind of an organization. Most of the vendors selling services are projectized organizations. Since the team members are hired and assigned on the basis of projects, their loyalty with the projects is maximum. Unlike functional organizations, the teams have ‘no home’ to return to after the project completion. Besides its advantages, less efficient use of resources and duplication of facilities and job functions are among the top disadvantages. This means that each project, for example, might have a separate accountant to work only on that particular project, thus duplicating the job function and facility in every project individually. Since his idle time cannot be allocated to any other project, this results in less efficient use of resources.
3. Matrix: This is an attempt to combine the best features of both functional and projectized organizations thus enhancing the strength of an organization working. Here, there are project managers and functional managers. The resources are under the functional managers which are allocated to a project before its start, only for that particular duration. This results in having two bosses of the team; the project manager & the functional manager. Communication and reporting goes from team members to both the bosses. Because of the two bosses, the project management becomes complex and requires properly implemented policies and procedures to run the things smoothly. The resources are maximum utilized as compared to projectized organizations. Since there is a lot of coordination between the project and functional managers, there is more support for the project from functional areas. The matrix can be strong or weak depending upon the authority and role of the project manager. Power rests with the project manager in strong matrix. In weak matrix, functional manager has the overall authority and the project manager is merely a coordinator or expediter. Expediter is primarily like an assistant for coordination and cannot make or enforce decisions. Coordinator is similar to the expediter but with an exception of having some power to make certain level decisions and have some authority. Merging strong and weak matrix, results in a balanced matrix where the power is shared between the functional and the project managers.