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Introduction to Types of Organizational Structure and the Role of Project Manager
In the field of project management, understanding the organizational structure of a company is crucial because it directly impacts how projects are executed, resources are allocated, and decision-making takes place. The structure of an organization defines the hierarchy, roles, responsibilities, and reporting lines, which in turn shapes how a project manager operates within that environment.
There are three primary types of organizational structures commonly found in organizations: Functional, Matrix, and Projectized. Each structure has its unique characteristics, influencing how a project manager functions and interacts with team members, stakeholders, and resources.
Understanding the distinctions between these structures is essential for a project manager because it determines their level of authority, decision-making power, and the degree of support they can expect from the organization. The project manager’s role can vary significantly depending on the type of structure in place. Let's explore each type of organizational structure and the role of the project manager within them:
1. Functional Organizational Structure
In a Functional Organizational Structure, the company is divided into departments based on specialized functions such as marketing, finance, engineering, IT, etc. Each department is managed by a department head or functional manager, and employees report to this manager for daily operations and project work.
Project Manager Role: In a functional structure, the project manager typically has limited authority. They often act more as a coordinator or facilitator, working within the constraints of the functional department. The project manager relies heavily on the functional managers for resources, and decisions must go through them. The project manager’s role is to manage the project within the boundaries set by the functional managers and ensure communication between departments.
2. Matrix Organizational Structure
The Matrix Organizational Structure combines elements of both functional and projectized structures. In a matrix organization, employees report to both a functional manager and a project manager. This structure can be classified into three subtypes based on the balance of power between functional and project managers: weak matrix, balanced matrix, and strong matrix.
Project Manager Role: The role of the project manager in a matrix structure depends on the subtype of the matrix:
Weak Matrix: The project manager has limited authority, and functional managers retain control over resources and decision-making.
Balanced Matrix: The project manager shares authority with the functional managers and has a more collaborative role in decision-making.
Strong Matrix: The project manager has more authority and control over the project and is more empowered to make decisions regarding resources and project direction.
The matrix structure allows for flexibility in resource allocation and expertise sharing across functional areas, but it can also create conflicts between functional and project managers due to the dual reporting lines.
3. Projectized Organizational Structure
In a Projectized Organizational Structure, the organization is designed around projects, and resources are organized and allocated specifically for the project’s success. The project manager has a high level of authority, and most employees are assigned to work exclusively on projects.
Project Manager Role: The project manager holds full responsibility for project outcomes, from planning to execution and closing. In a projectized structure, the project manager has complete control over the project’s resources, timeline, and budget. They make decisions independently and directly manage the project team, without the constraints of functional managers. The project manager is the central figure in the organization’s project efforts, with authority and accountability for delivering the project’s objectives.
Summary
In a Functional Organization, the project manager has a more limited role, focusing on coordinating between departments.
In a Matrix Organization, the project manager shares authority with functional managers, with varying degrees of power depending on the subtype.
In a Projectized Organization, the project manager has full control over the project and its resources, making independent decisions for project success.