In what type of organization does the project manager have full authority over the project?

Asked 7 months ago

Hi everyone, I've landed my first team leader and project management position. I'm very excited and looking to increase the team's current performance. Which would you say is the best way to structure the work?

Peter Daniels

Sunday, March 27, 2022

There are three project management organizational structures depending on authority and resource allocation.

1. Project Organization Structure: If your company has no budgeting issue, go for the project organization structure. In this type, the project manager has the full authority of making decisions, and the team gets dedicated resources for the task.
2. Functional Organization Structure: Go for a functional organization structure if you are new and less experienced. In this structure, the project manager directs the team members to work and reports to the functional manager.
3. Matrix Organization Structure: If tight on budget and you want to work independently without a function head, you can choose a matrix organization structure.

Jonathon Nixon

Sunday, May 15, 2022

It is advisable to opt in for the matrix organization structure because it affords the employees or the staff to have two organizers or leaders to which they can submit. This type of organizational structure is effective for a project manager who does not have all the capacity for effective team management. He will need a functional manager to help in oversight and execution of certain duties.

The matrix project management makes for hierarchical leadership whereby there is a flow of power from the team leader through the functional leader to the employees. This organizational structure is actually a combination of both the projectized organization and the functional organization. You can download the LinkedIn mobile app to see this, most people will state on their profile that they are managing a team in a matrixed organization.

Arjun Coleman

Monday, September 05, 2022

As a first-time leader, it is better to go with a functional organization. The functional organization provides a clear hierarchy where every team member knows their job. It classifies the company into different groups and departments, considering their domain of expertise. Functional managers supervise these groups to ensure that all the business operations run smoothly and efficiently.

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Your approach to project management may vary based on the type of organization that you are working within. Organizations may be structured in a traditional or functional manner or a projectized structure.

Depending on the organizational structure, your project management authority and availability of resources will vary.

Functional Organizations

A functional organization is a traditional structure where the organization is divided based on the functions performed by that particular group of people, such as Human Resources, Information Technology, Marketing, Service, etc.

The resource assigned as the “project manager” is usually a team member within a functional area and does not have the title of project manager. The functional manager will control the budget and the “project manager” will act more as a coordinator or expediter of project activities rather than having true project management responsibilities.

Resources for the project will need to be negotiated for with the functional managers and the accessibility of those resources will be based on business conditions. Any type of escalations of issues would need to be made to the functional manager.

Because the “project manager” has little to no authority, the project can take longer to complete than in other organizational structures and there is generally no recognized project management methodology or best practices. However, the depth of subject matter knowledge is much greater because the resources that will contribute to the project reside within the functional areas.

Projectized Organizations

In projectized organizations, the majority of the organization’s resources are involved in project work and the project work is generally completed for the benefit of an external customer. The project manager has increased independence and authority and is a full-time member of a project organization and has project resources available to them, such as project coordinators, project schedulers, business analysts, and plan administrators.
The project manager has authority and control of the budget and any escalation of issues would be made to the sponsor and potentially the PMO leadership. Given that the project resources report into the project manager versus the functional area, there may be a decrease in the subject matter expertise of the team members.

Example

Arizona Construction Company is a projectized organization: the majority of their resources are allocated against delivering projects for external customers, although they do have a few back-office workers who process the timecards, issue payroll, etc. Each foreman is a project manager and has authority over the project resources assigned to him or her.

AAJ Grocery is a functional organization: the company’s resources are structured by the function that they perform: front-end, bookkeeping, stock rotation, grocery, personal care and pharmacy, dairy, meat, etc. There is not a defined “project” organization nor are there defined “project managers”.

Summary

The organizational structure will dictate the level of power, authority, and resources available to a project manager. A traditional functional organization gives the project manager very little, if any, authority, whereas a projectized organization will provide the project manager with significant authority.

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