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Designed to help those that are preparing to take the PMP or CAPM Certification Exam, each post within this series presents a comparison of common concepts that appear on the PMP and CAPM exams. 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 OrganizationsA 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 OrganizationsIn 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. ExampleArizona 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”. SummaryThe 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.
See all posts in our PMP Concepts Learning Series From the course: Project Management Foundations How organizational structure affects projects“ - [Instructor] Organizations can be structured in several ways. From the classic functional hierarchy, where each person reports to only one supervisor, to a matrix, where people report to both functional managers and project managers, to a projectized organization, where most of the people work on projects. Each of these structures affects how projects are performed. In a functional hierarchy, projects aren't the priority, making it difficult for projects to succeed. Project managers have almost no authority. A functional manager is typically in charge of things like the project budget. Resources are hard to come by because they report to functional managers not the project manager. Even the project manager and other project management staff have to split their attention between the project and their regular work. The second type, matrix organizations, are still functional hierarchies but they support projects more than pure hierarchies do. They can be weak, balanced or strong depending on how much emphasis they put on projects. In a matrix, project managers have some authority to make decisions. Resources assigned to projects report to two managers, their functional manager and the project manager. In a strong matrix, the project manager and project admin staff work full time on projects. Projectized organizations are all about projects. This third type makes it easier for project managers to produce results. Project managers have almost complete authority over their projects, including the budget. Resources are dedicated to project work and report to the project manager. Project managers and project admin staff also work full time on project work. Organizational structure has a big influence on how projects are performed, how much a project manager can do and how easy it is to make projects successful. Using these characteristics, determine which structure your organization uses. ContentsWhat is a functional organization in project management?The functional organization is a traditional organizational structure in which the authorities – and therefore the real managers – are divided according to the functions performed by a particular group of people, such as Finance, HR, Marketing and Purchases, etc.
What is functional project in project management?A Functional project organizational structure consists of project team members allocated from different functional units of an organization. A typical organization would have different functional units such as- HR, Finance, Marketing, Sales, Operations, IT, Administration etc.
When projects are organized within the functional organization coordination is maintained through?Coordination is maintained through normal management channels. It is commonly used when one functional area plays a dominant role in completing the project or has a dominant interest in the success of the project.
What is a major advantage of the functional organization for a project?What is a major advantage of the Functional Organization for a Project? It offers maximum flexibility in use of personnel. each project manager has full line authority so there is unity of command.
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When projects are completed using a functional project management organization, it typically takes
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