Types of Organization: Must knowledge for a Project Manager
As project manager, a sound knowledge of the types of organizations and their functions is important to deliver successful outcomes. It helps you understand the scope of your authority and power, which is a function of the type of organization you are working for.
According to the PMI, there are four basic types of organization - Functional, Matrix, Projectized, and Composite. Let us take a closer look at each of these types of organizations.
In functional organizations, power and supreme authority rest with a functional manager. The functional manager reserves the authority to release resources based on their subject matter expertise. When the project ends, the resources are returned to the functional manager again for routine work.
Resources in functional organizations report directly to the functional manager. Project managers lack power in such organizations, and the scope for growth and development is limited. However, job security is enhanced.
There are three types of matrix organizations, viz., strong matrix, weak matrix, and balanced matrix. The power of the project manager differs between these three types of matrix organizations.
In a strong matrix structure, the project manager enjoys more power than the functional manager. He or she can take a call on the allocation of resources.
In a weak matrix structure, a project manager works like a project coordinator or project expeditor. A project coordinator has some say in the allocation of resources, while a project expeditor serves only as a point of communication between the customer and team.
Overall, in a weak matrix, the functional manager reigns supreme.
In a balanced matrix, both have equal power. Resources working on a project thus face communication lapses. A lack of clarity on whom to report to characterizes this type of structure.
A projectized organization is the ideal type of organization for a project manager. Project managers enjoy supreme power, and are the real bosses here. You have the freedom to apply your expertise and have a say in the proceedings.
But a word of caution – once a project is adjourned, project managers become redundant. There is no job security in this type of organization.
It is a blend of the functional, matrix, and projectized types of organizations. Most modern businesses are of the composite type.
It is always helpful for a project manager to know in advance what type of organization he or she is working so that he or she can better understand their level of authority. A skilled project manager should prefer a projectized organization to the rest.
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