Which organisational structure is used for project management

Project-based organizations are structured around projects and not functions. This type of structure is also called a projectized organizational structure. In a project-based organization most of the organization's resources are involved in project work. Project Managers have high levels of independence and authority for the project and control the project resources. The key challenge with a matrix organization is that every employee has two or more managers they report to, their Functional Manager and the Project Manager.

If they are working on multiple projects, they may have even more managers to report to. A weak matrix organizational structure maintains many of the features of the functional organizational structure. The role of the Project Manager is more that of a Project Coordinator. Their ability to make or enforce decisions is low and most of the authority remains with the Functional Manager.

A balanced matrix organizational structure recognizes the need for a Project Manager. However, the Project Manager does not have full authority over the project, project staff or project budget. A strong matrix organizational structure has many of the features of the projectized organizational structure.

They have full-time Project Managers and project administrative staff. Project Managers have considerable authority over the project in this organzational structure. Two of the key project aspects affected by organizational structure types are Project Manager Authority and Resource Availability. A functional manager heads each department and reports to an executive. These functional managers — not other staff — coordinate the project, and they select team members from each department to support the project, in addition to their functional responsibilities.

A projectized or project-based organizational structure creates a dedicated project division within an organization.

The project coordination operates vertically under this division. Project managers maintain sole authority for the project and are assigned dedicated staff who work toward project goals. A matrix organizational structure is set up on a grid to demonstrate staff reporting patterns to more than one authority. It is a hybrid of functional and projectized organizational structures, and project managers share authority with other program managers in this structure.

Depending on the decision-making capacity of the project manager, a matrix structure is one of three subtypes: weak, balanced, or strong. Weak Structure A weak structure is similar to the functional organization structure, in which coordination occurs horizontally among staff without a designated project manager.

The primary difference between a weak matrix and a functional structure is that the staff across departments, rather than the functional managers, coordinate the project but the functional manager maintains decision-making authority. Balanced Structure In a balanced matrix , the project manager also holds a staff position and does not utilize the project manager role to its full capacity.

The project manager still has little authority over project decisions, budget, staff, etc. Strong Structure A strong matrix is most similar to a projectized organizational structure. In it, a dedicated project manager falls under a functional project management department, has dedicated cross-functional staff, and is supported by a manager of all the project managers.

This subtype offers the project manager the most authority as they work across a matrixed environment. There is no perfect organizational structure.

Instead, a project manager must weigh the pros and cons of resource allocation and optimization within each structure, then select the most optimal structure. This means that the project manager must have both the knowledge and the skills to apply effective managerial and interpersonal techniques that lead to a high-functioning project team. Use this quick-reference guide to help determine the pros and cons of your project organization structure, as well as the managerial skills you need to prioritize in order to ensure your project runs as smoothly as possible.

Optimal Resources: Resources are not in competition with other areas, which leaves little need for competition or negotiation. Familiarity: Team members are already familiar with each other and share similar skills and functions. Missing the Right People: Projects may need additional specialists if they do not have all the right people within the area. Competing Priorities of Team: Team members may feel challenged to balance competing priorities of program responsibilities and project responsibilities.

Flexibility: Employees can work across departmental units without being bound to one. Costs: Administrative costs are higher, due to the operational complexity of the reporting relationships. Workload Miscommunication: There is a greater potential for misunderstanding a team's workload, given that they report both to a project manager and a department manager.

Influencing and Negotiation Skills: Navigate limited authority with other program managers and interactions with the project team members. Servant Leadership: Focus on building deep collaboration and communication with the team, and continuously monitor the division of labor. Open Communication Lines: These boundaries are essential to spot and resolve conflicts before bigger issues come up.

Resource Duplication: Resources may not be optimized and can be costly, due to the doubling of resources across multiple projects. Role Responsibility: Live up to the trust and leadership that comes with full authority and ownership of the project.

Maintain Team Morale: Build team trust and keep the team moving to meet tight deadlines. Some organizations adopt a dedicated project management office PMO due to the high volume and variety of projects. This allows for better visibility of projects across the organization, improves resource allocation, and increases productivity and ROI across projects. Read our article with expert tips and best practices for PMOs. The features of an organizational structure define the roles and relationships among members of the project, as well as between projects.

These relationships are determined by authority, communication lines, coordination, supervision, and responsibilities. To make a project organizational chart, first assess the goals of the project, identify the core team, and assign them appropriate roles to the project. Develop the organizational chart by mapping out the roles and responsibilities of each team member.

The PM will make the organizational chart during the initiation phase of the project so that the project manager can communicate with team members before the project begins. The team will then use it in the project planning phase to help divide tasks among team members.

Doing so provides a clear understanding of each role, empowers team members to own their roles, and brings respect to other positions within the project, which immediately builds trust. The project organizational structure needs to be flexible and might require adjustments during the other phases of the project.

In the PMP exam , if the organizational structure is not defined, please assume it is a Matrix organization structure. It simply refers to locating offices of the project team in one room. Virtual, in which the project manager makes a connection to others thereby a network of people is created. Note: The projectized organization is also called a project-oriented organization. Sometimes this may be derived from a composite a mix of organization types, or a hybrid organization.

Premium Resources Training Courses. Organizational Structure A project operates in with people, process and technology of an organization. Different types of organizational structures include: Functional This is the most common form of an organization. That is to say that the project manager, in this type of organization has little to no authority here; in some functional organizations, that position does not even exist.

What would you find, however, is that the work is broken down into departments such as the human resource department, sales department, finance, public relations, administration, etc. In simple terms, it can be likened to that of a more traditional company where staff is presided over by a supervisor, based on their functions within the organization and communication is most often done through the department heads to senior management.

Sign up and enjoy Free project management and time tracking for you and your team! What is fascinating about this type of organizational structure is that employees appear to be more skilled in their respective departments, thereby leading to greater work efficiency. Everyone knows who to hold accountable if something were to go wrong as responsibilities are predetermined.

On the downside, the work may prove monotonous over time, which could result in less enthusiasm and reduced loyalty to the organization. In addition to that, you would also find that cross-departmental communication becomes poor and the high level of bureaucracy could affect decision-making negatively. The projectized organizational structure is the complete opposite of the functional organizational structure even though the organization may still group staff according to their work functions.

In this case, the project management team structure is organized in such a way that the project manager has project authority. You would find him at the top of the hierarchical structure, calling all the shots; with employees playing supporting roles for the project.

At the end of the project, the project team members are released and resources directed towards more relevant areas.