How Organizational Structures Affect Projects and Project Management

It's correct that the structure of an organization can have a major impact on project management.

Think about your own experience. Is it tough to get traction on your own projects? Are there several layers of authority that you need to browse to get blessings for basic jobs? Does your budget get cut due to competition for limited funding? Do your projects lose out in favor of daily routine operations? And you thought it was something you're doing, or failing to do! Well it may have been, but it's more likely that you are feeling the impacts of the organizational structure in which you work. Understanding your working environment better can help you to grow above organizational issues and also easy the way to successful project management.

By looking at three distinct organizational structures - operational, matrix and projectised - we will discover how every distinct organizational design affects project administration.

Functional Organizational Structure. These companies are organized into operational divisions based on main functions such as engineering, human resources, finance, IT, planning and coverage. Each different functional branch works independently and dispersed groups of employees in a branch report into a functional manager. The functional manager generally both allocates and monitors the job and carries out tasks like performance evaluation and setting payment levels. Within this model project supervisors have very limited authority. Functional organizations are put up for ongoing operations as opposed to jobs and so this organizational arrangement can be found in firms whose primary purpose is to produce standardized products and services.

Matrix Organizational Structure. In a matrix firm control is shared. The job manager shares responsibility for the job with numerous individual operational managers. Shared responsibilities can consist of assigning tasks and priorities to individual team members. But functional managers still make the final decisions on who will operate on jobs and are still accountable for government. Project managers take charge of allocating and coordinating the work for your designated project staff. In this type of structure there is a balance between ongoing operations and jobs, so it's a common structure for organizations that have these dual functions. For example, local body organizations who are responsible for both maintaining existing infrastructure (continuing surgeries) and commissioning the construction of new infrastructure (projects) often have matrix structures.

Projectised Organizational Structure. In a projectised company the project director has complete authority over the project. This includes the authority to set priorities, employ resources, and to guide the work of the project team. All members of this staff report directly to the project manager and everyone is assigned to your project. After conclusion of this undertaking, funds will be re-assigned to another project. This type of structure is common in firms that work on size-able, long-term projects, like in the building market.

Take a little time to reflect on which type of organizational arrangement you work in before we move on to talk about how these organizational structures affect projects. Then see if you recognize any of the problems raised.

So what would be the consequences for project management?

In a practical organization, jobs that exist within one functional division generate no particular organizational issues, but jobs that cut across functional branches can be challenging to manage. Why? Because the project manager has no direct functional authority and has to obtain continual collaboration and assistance from functional managers of other branches to be able to satisfy job objectives. This can get complicated.

Since the matrix structure gives authority to both project managers and operational managers the result is to offer a more seamless division of work and ultimately to build a stronger team culture. On the other hand, the prospect of conflict between operational managers and project managers nevertheless exists since there is still source conflict. Everyone who's on a project team has two bosses - their functional manager as well as their project supervisor.

In a projectised organization authority is centralized. Because projects are removed from functional branches the lines of communication are shortened. These two factors improve the capability to generate swift decisions. Job teams develop a solid sense of individuality which subsequently makes a high level of commitment from staff members. On account of their involvement in consecutive projects of a similar nature projectised organizations can develop and maintain a long-term body of experience and techniques in specialized areas.

It's apparent that projectised organizations make it easier to run jobs because the entire structure is put up for that purpose. However, if you're managing a project within other organizational structures, then recognizing and understanding that the consequences will increase your awareness of the possible project management pitfalls, so that you can be proactive about resolving them. Communication, conflict resolution and team building will be key to your success.

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