Project Management is a discipline that involves the use of various tools, techniques, and processes to plan, execute, and control projects effectively. One of the fundamental concepts in project management is the understanding of different types of organizations that exist in the field. In this article, we will explore the various types of organizations in project management and how they impact the management of projects.
If you’re looking to become a project manager you can obtain a certification: Obtaining certification in project management can demonstrate your knowledge and skills. Some popular certifications include PMP (Project Management Professional) and CAPM (Certified Associate in Project Management).
Types of Organizations in Project Management
Functional Organizations
A functional organization is a type of organizational structure where the company is divided into departments based on the functions performed, such as sales, marketing, finance, and more. In this structure, all authority and decision-making rest with the functional manager, and employees within each department report directly to that manager.
The main benefit of a functional organization is that it allows for specialized skills to be developed within each department, increasing the efficiency of each group. However, this type of structure can also lead to silos and decreased collaboration between departments, which can be a disadvantage. Additionally, in a functional organization, the role of the project manager is often limited, and they may only serve as a coordinator or expediter.
Overall, a functional organization is best suited for businesses that are focused on routine and repetitive tasks, where the focus is on the efficient functioning of each department rather than on projects.
Download and Practice Free PMP Exam questions and boost your preparation for the PMP Exam
- Projectized Organizations
A projectized organization is a type of organizational structure where the emphasis is on project work rather than functional work. In this structure, the project manager has complete authority and control over the project and its resources, including decision-making, budget allocation, and resource allocation. The project manager is considered the “boss” of the project and has a significant impact on the success of the project.
The main benefit of a projectized organization is that it allows for maximum control and flexibility for the project manager, enabling them to apply their expertise and experience to the project. This structure is best suited for organizations that are focused on delivering projects, such as construction, software development, and consulting firms.
However, one potential disadvantage of a projectized organization is that once a project is completed, the project manager becomes redundant. There is also a risk of overlap and competition between different projects within the organization, as each project operates as a separate entity.
Overall, a projectized organization is best suited for businesses that are focused on delivering projects and need a structure that provides maximum control and flexibility for the project manager.
Matrix Organizations
A matrix organization is a type of organizational structure that combines aspects of functional and projectized organizations. In a matrix organization, employees report to both a functional manager and a project manager. This structure is designed to balance the needs of the functional departments and the project work, allowing for better alignment and coordination between the two.
There are three types of matrix organizations: strong matrix, weak matrix, and balanced matrix.
Strong Matrix: In a strong matrix structure, the project manager has more authority and control over the project and its resources than the functional manager. The project manager is responsible for making decisions, allocating resources, and ensuring the project is completed on time and within budget.
Weak Matrix: In a weak matrix structure, the functional manager has more authority and control over the project and its resources. The project manager acts more as a coordinator or expeditor, serving as a point of communication between the customer and the team.
Balanced Matrix: In a balanced matrix structure, the functional manager and the project manager have equal authority and control over the project and its resources.
The matrix structure is often used in organizations that have a mix of functional and project work, and in industries that are dynamic and require a fast response to market or customer demands.
While the matrix structure can provide benefits, such as improved alignment and coordination between functional departments and project work, it can also lead to communication difficulties and confusion about who is in charge.
Overall, a matrix organization is best suited for organizations that need to balance the needs of the functional departments and the project work and require a structure that allows for better alignment and coordination between the two.
The structure is designed to meet the unique needs of the organization and its projects and can be tailored to fit the specific requirements of each project.
- Composite Organizations
A composite organization can be created for a variety of reasons, such as simplifying the organization structure, keeping power in check, or adapting to the specific requirements of a project. This type of structure allows organizations to adapt and change as the needs of their projects evolve over time.
In a composite organization, different projects may be structured in different ways, depending on the specific needs of each project. For example, one project may be structured as a functional organization, while another project may be structured as a projectized organization. This allows organizations to balance the needs of their functional departments and project work and respond quickly to market or customer demands.
Overall, a composite organization is best suited for organizations that have a mix of functional and project work and need a flexible structure that can adapt to the specific needs of each project.
Impact on Project Management
The type of organization that a project is managed under has a significant impact on the management of the project. For example, in a functional organization, the project manager may need help in securing resources and personnel for the project, as these are controlled by the functional managers. In contrast, in a projectized organization, the project manager has complete control over the project team and resources, making it easier to manage the project effectively.
Conclusion
In conclusion, understanding the different types of organizations in project management is crucial to the effective management of projects. The type of organization has a significant impact on the management of the project, and it is essential to choose the right type of organization for a given project to ensure its success. Whether it be a functional organization, projectized organization, matrix organization, or hybrid organization, understanding the unique characteristics of each type can help project managers make informed decisions and effectively manage their projects.
