There are three main types of organizational structures in relation to project management as well as a few other organizational structures that aren’t as popular. Full organizations can be made up of more than one of these structure types.
The Main Organizational Structures Are:
Lesser Utilized Organizational Structures Are:
The Main Organizational Structures
A Functional Organization is the most common and highly utilized organizational type. It groups together people by the type of work they do or their specialization. The employees usually report to a functional manager and if projects occur the employees do the project work on top of their normal routine/functional job. Each function is dedicated to a general task, and each employee works towards completing that task. The Project Manager may have no control and have to work with the employees they are assigned.
Examples of Functional organizations would be having a maintenance department and an operations department in a manufacturing facility – each department serves a function. In hospitals, you might see emergency services, surgical, pharmacy, mental health, and others. Your standard office might be made up of customer service, marketing, and accounting.
The Projectized Organization is one that is dedicated to performing projects and the employees’ work is project focused. As long as their role on a project exists or they can get on another project, the employee remains employed. In this type of organization, the Project Manager has a lot of control and functional managers do not exist.
Construction tends to be highly Projectized. The Project Manager (or General Contractor) may bring in people specific to the required tasks on the project. They would have a team for framing a house in and performing other tasks, then a plumber and an electrician comes in, and then someone needs to put the roof on the house. Each task on the project may require a different set of skills and the people performing those tasks may only be employed temporarily.
The Matrix is a mix of Projectized and Functional organizational types. There are three levels to a Matrix organization, Weak, Balanced, and Strong. Employees in this organizational type would report to two managers; a Project Manager and a Functional Manager. The strength of the Matrix is determined by who has more control.
Weak: A Weak Matrix organizational type is more closely related to a functional organization. The Project Manager and PMO may exist, but the Project Manager has little control over the employees and even which employees they get on their projects. Project Managers have to work with what is given to them and their role is often only slightly above that of notetaker or project coordinator.
Balanced: A Balanced Matrix is equal parts Functional and Projectized. It has the potential for the most conflict because who controls the general employee is sometimes questionable. The Functional Manager may want the employee for some task at the same time the Project Manager does and since neither have full control over the employee’s work, a conflict can occur.
Strong: In a Strong Matrix, the Project Manager has a lot more control. It has more in common with a Projectized organizational type. The Functional Manager may just be a guide to get through basic organizational requirements or assist the employee in finding projects to work on. The Project Manager decides who will work the project. Others may remain on “The Bench” answering only to the Functional Manager until a project becomes available for them to work on.
Matrix type organizations are in heavy use in IT Service industry roles – like IBM and its Global Services division. People may have a more general functional team such as IT Resources. Project Managers will have more control over the available resources on the stronger end of the continuum.
Lesser Utilized Organizational Structures
In an organic structure, there are no real functional departments. Workers with various skills and specializations that are not related to each other may report to the same manager or workgroup. This generally would be seen in a small organization.
The project manager may only serve as a project coordinator or overseer and it may not be their full-time role. They may also have functional duties.
This type of organization may arrange itself by geographic location, or by processes. A sales group, for example, may serve only the Northeast United States.
Projects in this organization type may look similar to projects in an Organic organization. There may be no Project Manager role, someone may just be carrying out coordinating activities.
The above shows most organizational types in use, there are still others in use. Other types of organizations include the Virtual, Hybrid, and even a PMO.