The PMBOK identifies the differences in relation to the project manager's authority, role, titles, and administrative staff, and the percentage of an organization's personnel assigned to project work when determining whether an organization has a functional, matrix, or projectized organizational structure. Here are the PMBOK definitions of the types of organizations and the implications for the project manager:
Most companies are functional in nature and become more projectized as the organization becomes aware of Project Management as a discipline.
Functional organization This is the typical corporate environment where an employee has a specific supervisor. Generally these types of organizations use hierarchies to determine the authority level of each employee. They are generally the most challenging for a project manager because resources are not fully assigned to the projects and the project manager lacks full authority to control work assignments and personnel. The organization generally starts with a CEO or president at the top of the hierarchy and utilizes pushdown management to monitor and control subordinates.
Matrix organization (strong, balanced, or weak) This is a mixture of functional and projectized organizations and proceeds from a weak to a strong matrix based on the allocation of resources and the level of authority the project manager exerts over project, time, and personnel scheduling. This type of organization tends to be more satisfying to a project manager because it migrates from a weak matrix organization toward a strong matrix organization.
Projectized organization This is generally a more rewarding type of environment for a project because most of the resources are specifically allocated to the project and the project manager has full discretion over the company's time and agenda. This allows the project manager the authority and resources to accomplish the project more effectively without conflict from the functional manager. The project manager is generally provided referent power to accomplish the goals and objectives of the project without interference from other sources. He is also allowed to escalate problems and issues to the highest levels of the organization in order to complete the project. This is the most idealistic working environment for a project manager, although he is also held fully responsible for all problems and positive or negative results.
Table 2.2 summarizes the types of organizations, their project management attributes, and some advantages and disadvantages.
Table 2.2. Organizational Structure Influences on Projects (PMBOK Figure 2-6)
Traditional. The staff reports to functional managers.
The staff reports to the functional manager with minimal project manager involvement.
The staff reports to the functional manager with moderate project manager involvement.
The staff reports to the functional manager with heavy project manager involvement.
The staff reports to the project manager.
Project Manager Involvement
Part time or limited involvement.
Part time with increased involvement.
Staff Time Allocated to Projects
Authority Level of Project Manager
None or a limited level of authority.
Limited level of authority.
Low to moderate level of authority.
Moderate to high level of authority.
High to almost full level of authority.
The functional manager is held accountable for the staff and project.
Some level of authority and staff for the project and project manager.
Increased authority and staff for the project.
Further increased authority and staff for the project.
Highest level of authority and staff allocation for the project.
The project manager has little or no authority or staff for the project.
Conflicts between functional manager and project manager can occur.
Confusion about who is actually responsible for what parts of the project may develop.
The functional manager may feel left out of the process unless the project manager keeps him informed.
The project manager is held responsible for the staff and project results.
The Project Management Office (PMO) has become an increasingly popular fixture in many companies. This group is specifically assigned the responsibility for auditing and tracking projects. It can either provide administrative support or lead the entire project based on the corporate culture in which it operates. It is generally involved with training, development of project plans, templates, scheduling, and other areas of expertise associated with projects.