Organizational Structures

 

Pointwise Summary with Examples

1. Organizational Structures:

• Organizational structure determines the project manager's power and control over resources and decisions.
• Three primary structures:
  1. Functional
  2. Projectized
  3. Matrix (Weak, Balanced, Strong)
• Additionally, many companies use a hybrid structure combining these models.

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2. Functional Organization:

• Definition: Groups employees by areas of expertise (e.g., Sales, Marketing, IT).
• Key Characteristics:
  • Team members report to a functional manager (e.g., Director of IT, Head of Sales).
  • Project manager has little to no authority.
  • Resources and budgets are controlled by the functional manager.
  • Project work is often part-time for both staff and project managers.
• Example:
  • An employee in IT works under the Director of IT and contributes to a project when assigned, but the project manager has limited control.

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3. Projectized Organization:

• Definition: Entirely project-focused, where all resources are dedicated to projects.
• Key Characteristics:
  • Project manager has full authority over resources, budgets, and decisions.
  • Team members report directly to the project manager and work full-time on projects.
  • No functional manager involvement.
• Example:
  • A construction company assigns a project manager to build a house. The manager hires staff who report directly to them and work solely on that project.

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4. Matrix Organization:

• Definition: A mix of functional and projectized models, with shared responsibilities.
• Three Types:
  1. Weak Matrix:
     • Functions like a functional organization but gives the project manager limited authority.
     • Resources are controlled by the functional manager.
     • Example: A project manager in IT coordinates tasks but relies on the Director of IT for approvals and resources.
  2. Balanced Matrix:
     • Shares power between functional and project managers.
     • Project manager has moderate authority and some control over resources and budget.
     • Example: A marketing project where both the project manager and the Head of Marketing manage resources collaboratively.
  3. Strong Matrix:
     • Functions like a projectized organization with the project manager having high authority.
     • Project manager controls most resources and budgets.
     • Example: A product launch project where the project manager leads full-time staff and makes critical decisions.

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5. Hybrid Organization:

• Definition: Combines functional and projectized structures.
• Key Characteristics:
  • Some departments operate as functional (e.g., Sales, Marketing), while others are projectized (e.g., R&D teams working on specific products).
  • Project manager authority depends on the department.
• Example:
  • In a tech company, the marketing team functions traditionally, but the software development team operates project-based for new product releases.

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6. Comparative Summary:

Structure	Project Manager Authority	Resource Control	Staff Role	Budget Control
Functional	Little to none	Functional Manager	Part-time	Functional Manager controls
Weak Matrix	Low	Mostly Functional	Part-time	Shared
Balanced Matrix	Moderate	Shared	Part/Full-time	Shared
Strong Matrix	High	Project Manager	Full-time	Project Manager controls
Projectized	Full	Project Manager	Full-time	Project Manager controls

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7. Preferred Work Environment:

• Projectized organizations provide maximum control and focus for project managers.
• Reality: Most companies use hybrid or matrix structures.

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8. Key Takeaways for Exams and Practice:

• Functional: Minimal project manager authority.
• Projectized: Full project manager authority.
• Matrix: Authority depends on whether it’s weak, balanced, or strong.
• Hybrid: Combines multiple structures, common in modern businesses.

Understanding these structures is essential for managing projects effectively and recognizing the project manager's role within different organizational setups.