Understanding Types of Organization: PMP® Study

Type of Organization

1. Functional Organization

   Project Management training for the PMP exam covers the functional organization, the most commonly used organization type. In a functional organization structure, the organization is grouped into departments where people with similar skills are kept together in forms of groups; e.g., sales department, marketing department, finance department, etc. This helps organizations enhance the efficiencies of each functional group.
   
   All authority (i.e., budget allocation, resource allocation, decision-making, etc.) belongs to the functional manager in a functional organization. Resources in functional organizations report directly to the 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.
   
   Project managers typically do not exist in this type of organization structure; if this position exists, the role of the project manager will be very limited. The project manager may have the title of a coordinator or an expediter.

2. Matrix Organization

   The matrix organization structure is a combination of two or more types of organizational structures, such as the projectized organization structure and the functional organization structure. This combination can help organizations improve efficiency, readiness, and market adaptation. This type of structure is most suitable for organizations operating in a dynamic environment; they often can respond faster to market or customer demand while decreasing the lead time to produce a new product.
   
   The authority of a functional manager moves vertically downwards, and the authority of the project manager moves sideways. Since these authorities flow downward and sideways, this structure is called the matrix organization structure. In a matrix organization structure, employees may report to many managers, and some from one section may report to one boss while the rest report to a different boss.
   
   When you receive project management training, you’ll learn more details about the three types of matrix organizations, and how the project manager’s power differs depending on the type. Below we provide a summary.

3. Strong Matrix

   In a strong matrix structure, the project manager enjoys more power than the functional manager. For example, the project manager has a say in the allocation of resources.

4. Weak Matrix

   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.

5. Balanced Matrix

   In a balanced matrix, both have equal power. Resources working on a project can face communication difficulties due to the lack of clarity on whom to report.

6. Projectized Organization

   A projectized organization is the ideal organization type for a project manager. Project managers are the real bosses here, with the freedom to apply your expertise and have a say in the proceedings. However, once a project is delivered, project managers become redundant. There is no job security in this type of organization.

Become a Project Management Professional

• 6%Growth In Jobs Of Project Management Profiles By 2024
• 22 Million JobsEstimated For Project Management Professionals By 2027

• 

  PMP® Certification Training

  • Access to Digital Materials from PMI
  • 12 Full-Length Simulation Test Papers (180 Questions Each)

  View Program
• 

  Post Graduate Program in Project Management

  • Receive Post Graduate Program Certificate and Alumni Association Membership from UMass Amherst
  • 8X higher live interaction in live online classes by industry experts

  6 months

  View Program

prevNext

Here's what learners are saying regarding our programs:

• 

  Katrina Tanchoco

  Shell - Manila,

  The interactive sessions make a huge difference as I'm able to ask for further clarifications. The training sessions are more engaging than the self-paced modules, it's easier now that i first decided to take up the online classroom training, and then followed it up with the self-paced learning (online and readings).

• 

  Nathan C

  PHC Business Manager, Midlands and Lancashire Commissioning Support Unit

  I wanted to transition into the Project Management field and wanted the right opportunity to do so. Thus, I took that leap forward and enrolled in this course. My learning experience was fantastic. It suited my learning style.

prevNext

Not sure what you’re looking for?View all Related Programs

7. Composite Organization

   A composite organization blends the functional, matrix, and projectized types of organizations. A composite is just two or more models that are adapted for a special project, for simplicity, or to keep power in check. Most modern businesses are of the composite type.
   
   Two examples to help describe composite organizations are below:
   
   
   • An organization may deliver one project in a Balanced Matrix way, while another is being performed in a Functional way. They also have yet another project that’s being done as Projectized.
   • A Functional organization needs a small building, and the organization has the capability to construct the building itself. This would become a Composite organization because the organization creates a separate project team to complete this task.

Learn from experts who help you pass the examination post enrolling in Simplilearn's PMP training course. Sign-up today for PMP® Certification Training Course!

Choose the Right Program

Unlock your project management potential with Simplilearn's comprehensive training. Gain the skills and knowledge needed to lead successful projects, boost efficiency, and exceed goals. Choose the right project management course today and advance your career with confidence.

Program Name	PMP® Certification Training Course	PMP Plus	Post Graduate Program In Project Management
Geo	All Geos	All Geos	All Geos
University	PMI	Simplilearn	University of Massachusetts Amherst
Course Duration	90 Days of Flexible Access to Online Classes	36 Months	6 Months
Coding experience reqd	No	No	No
Skills you wll learn	8+ PM skills including Work Breakdown Structure, Gantt Charts, Resource Allocation, Leadership and more.	6 courses including Project Management, Agile Scrum Master, Implementing a PMO, and More	9+ skills including Project Management, Quality Management, Agile Management, Design Thinking and More.
Additional Benefits	Experiential learning through case studies Global Teaching Assistance 35PDUs	Learn by working on real-world problems 24x7 Learning support from mentors	Earn 60+ PDU’s 3 year course access
Cost	$$	$$$$	$$$$
	Explore Program	Explore Program	Explore Program

Conclusion

It’s always helpful for a project manager to know in advance what type of organization you are working in to better understand your level of authority. Skilled project managers typically prefer a projectized organization to others.

Are you looking to take your project management career to the next level? Add the PMP certification to your resume with Simplilearn’s world-class online PMP course.

PMP is a registered mark of the Project Management Institute, Inc.