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The structure of your organization has an impact on many aspects of project management, including the authority of the project manager and the process to assign resources.

Project managers are often frustrated by what appear to be roadblocks in moving the project forward, but in many cases, the root issue is the organizational structure itself and how it operates. The following sections will cover the different types of organizational structures and how they influence the way projects are conducted.

The Functional Organization

The classic organizational structure is the functional organization, as shown in Figure 1.1. In this structure, the staff is organized along departmental lines, such as IT, marketing, sales, network, human resources, public relations, customer support, and legal. Each department is managed independently with a limited span of control. This organizational type is hierarchical, with each staff member reporting to one supervisor, who in turn reports to one supervisor, and so on up the chain. Figure 1.1 shows a typical functional organization.

FIGURE 1.1 The functional organization

A functional organization often goes about the work of the project in a siloed fashion. That is, the project deliverables are worked on independently in different departments. This can cause frustration among project managers, because they are the ones held accountable for the results of the project, but they have no means of holding team members from other departments accountable for completing project deliverables.

A project manager in a functional organization should develop strong working relationships with the functional managers. Functional managers are responsible for assigning work to the employees who report to them. They are also responsible for rating the performance of the employees and determining their raises or bonuses. This, as you can imagine, sets up a strong loyalty between the employee and the functional manager as opposed to the employee and the project manager. However, that doesn’t mean project managers can’t be successful in this type of organization. Building a relationship with the functional managers and maintaining open communications is the key to successful projects in this type of structure. It also helps a great deal if you can contribute to the employee’s performance ratings by rating their work on the project.

Project managers have little formal authority in this type of structure, but it doesn’t mean their projects are predestined for failure. Communication skills, negotiation skills, and strong interpersonal skills will help assure your success in working within this type of environment.

The functional organization is the most common organizational structure and has endured for centuries. The advantages of a functional organization include the following:

■ Growth potential and a career path for employees

■ The opportunity for those with unique skills to flourish

■ A clear chain of command (each staff member has one supervisor – the functional manager)

The typical disadvantages of a functional organization include the following:

■ Project managers have limited to no authority.

■ Multiple projects compete for the same limited resources.

■ Resources are generally committed part-time to the project rather than full-time.

■ Issue resolution follows the department chain of command.

■ Project team members are loyal to the functional manager.

The Matrix Organization

The next organizational structure covered is a matrix organization. There are three types of matrix organizations, as discussed in a moment. Figure 1.2 shows a balanced matrix organization.

FIGURE 1.2 The balanced matrix organization

Matrix organizations typically are organized along departmental lines, like a functional organization, but resources assigned to a project are accountable to the project manager for all work associated with the project. The project manager is often a peer of the functional staff managers. The team members working on the project often have two or more supervisors – their functional manager and the project manager (or managers) they are reporting to.