Organizational structures

Like it or not, the way the organisation in which the project takes place, is structured, will have a profound effect on how the project works.

Each organisation has its own culture and style of working.

Most organisations are structured in 13 ways: functional, projectized, or matrix. As a project manager you must know how your organisation is designed.

The style of these three organizational types will dictate their managers. There is another aspect of organisations to consider. Are they risk averse or willing to take on risky projects?

The functional organisation

This is the traditional way of organising a business, and has its name suggests, means that the organisation is split into its various functions. For example, under the leadership of the CEO, the main functions such as engineering, marketing, manufacturing, etc, report upwards to the CEO.

Each function has its own staff beneath it. Clearly, an employee reports to only one boss, and the chain of command is vital.

Americans call this type of organisation -- a stove pipe type of organisation. So-called, because each reporting line is only concerned with their own functions. Problems occur when one function employee needs to speak to another functions employee.

The only way to do this is to escalate upwards to the functional head, then across to the other functional head, and back down again. A clumsy and inefficient way of working, however each function works as a very effective team and is very goals focused.

Another advantage is that people with similar skills, knowledge, and experience are easier to manage, making work assignments much easier.

A big disadvantage for projects is that the project manager will have to work with other functions with no formal authority.

Within a function, several projects at any one time will have to compete for the available resources, and project team members will have their first loyalty with their line or functional manager.

Projectized organisations

In this organisation, each project manager reports directly into the CEO. Each project manager will have their own full-time team members and staff. This would only suit and organisation where projects and their delivery were the core business.

Project managers have the ultimate authority over the project, but disadvantage is that as projects finish the project teams are dissolved and may find themselves out of work. Team members sit and work in the same physical area as each other.

Matrix organisations

Employees in a matrix organisation are structured vertically in their functions, but horizontally to a given project manager or more. Functional managers look after" pay and rations", and the project managers give out work for their projects.

Both the operational managers and the project managers contribute to performance reviews for the project teams.

The operational manager acts of course, as the resource manager and should be consulted when a project manager seeks resources for their projects. Some compromise is often needed when there is not enough functional staff to serve all projects. When this happens the project managers will need to negotiate with other project managers for resources.

There are two forms of matrix organisation; the strong matrix, and the week matrix. For both of these, the vertical functional teams are the same.

The weak matrix.

The functional managers have all the Power in a weak matrix, and project managers act as project organisers with little or no authority.

The strong matrix.

Here, the Power rests with the project manager, and they are able to force the functional managers to give them their best resources. The project managers can then negotiate these resources amongst themselves, leaving out the functional managers.

The project managers have their own boss, in effect a functional manager, who is the manager of project managers.

The balanced matrix.

For this, each manager has responsibility for their parts of the project organisation and staff get assigned based on the needs of the project not on the strength of the manager's position.

These days it is rare than organisation would be a pure functional one or a pure projectized one.