Overheard at the water fountain: “The Functional Manager is responsible…no…no…it’s the Project Manager’s accountability. This organizational structure just doesn’t work for us!" The role of organizational structure and workplace culture is critical for optimized project management environments.
What Influences Project Success?
Every organization implements a product or service as a project. Two components that influence project success from an organizational perspective are organizational structure and workplace culture. These factors play a significant role in creating optimized project management environments for project success. By working in an optimized project management environment and by applying project management best practices, you can greatly enhance the success of your project.
PMP Note: The material in this article pertains to the PMBOK version 5.
The PMBOK tells us there are four types of organization structures. These types are:
Projectized Organizational Structure: In this structure, the Project Manager has the most authority over resources. For the duration of the project, each project member reports directly to the Project Manager. Consequently, the Project Manager can create a team focused only on meeting the project goals. Many IT consulting and Construction organizations use a projectized structure. A projectized organizational structure provides the maximum authority and control to the Project Manager.
Functional Organizational Structure: In this structure, the employees report to a Functional Manager who will lead a business unit. Each project team is created from relevant business units. For example, you may have an organization split into business units, such as Java, .NET, GUI, and Testing. Now, suppose the organization has to develop a Java application. The project team will be created from the Java, GUI and Testing business units. Since each project team member will still report to the Functional Manager, the Project Manager will not much authority over his or her team. The Functional Manager will have the most authority. If there is a conflict of business unit interests and project interests, the Functional Manager will direct resources to achieve the interests of the business unit first. The project will take a back seat.
Matrix Organizational Structure: A Matrix structure leverages both Functional and Projectized organizational structure concepts. This hybrid solution tries to negate the drawbacks of Functional and Projectized structures. There are three types of Matrix structures: Weak, Strong, and Balanced. In a Weak Matrix structure, project team members report to the Functional Manager first and then Project Manager. It is very similar to the Functional structure. In a Strong Matrix structure, project team members report to the Project Manager first and then the Functional Manager. In a Balanced Matrix structure, project team members report to both the Project Manager and the Functional Manager. This dual-reporting structure can lead to a lack of clarity in accountability. Therefore, accountability should be clearly communicated before starting the project.
Composite Organizational Structure: In this structure, the Project Manager is given total control over project resources for a temporary period. This structure is not a permanent organizational structure. Rather organizations use it, to complete critical projects. For example, an organization based on the Functional model can deploy a composite structure for continuous improvement and value engineering initiatives. After the initiative is complete, the project resources are released back into the functional pool.
Having the most appropriate organizational structure is one step to creating optimized project management environments. There are other steps in the puzzle. The most critical is having a workplace culture that aids project success. One aspect of workplace culture is organizational values. By fostering values, such as Communication and Trust, project team members will behave in a manner that leads to project success. Other key aspects include expectation setting and performance management. The workplace culture also impacts how you resolve workplace conflicts. Read the Workplace Conflict Resolution Techniques for Project Managers article for more.
As a Project Manager, being in an organization that provides you with the most authority and responsibility to acheive the project goals is critical to your and your project's success. By working in an optimized project management environment, you will be able to avoid common project management failures.