6th Edition PMBOK® Guide–Organizational Structures (1)


I am starting a project of going through the 6th Edition of the PMBOK® Guide and blogging about its contents.    The 6th Edition was released on September 22nd by the Project Management Institute, and the second chapter is a general introduction to the framework in which project management exists.

There are many types of entities which can influence a project:

  • Risks–events which can influence a project (covered by Risk Management)
  • Shareholders–people who can influence a project (covered by Shareholder Management)
  • Environmental Enterprise Factors (EEFs)–conditions not under control of the project team that can be either internal and/or external to the organization
  • Organizational Process Assets (OPAs)–company policies and/or knowledge bases accumulated from previous projects

The final type or entity that can influence a project is the form of the organizational structure.   In the chart on page 47 of the Guide, there are 10 different types of organizational structure listed, each of which can influence the following on a project:

 

  • project manager’s authority
  • project manager’s role
  • availability of resources
  • management of the project budget
  • administrative staff on the project (the project management team)

Although the table is certainly thorough, it’s a bit overwhelming in the amount of information it presents, so let’s go through the choice of organizational structure based on three different variables:

  • Operations vs. projects (functional, strong matrix, balanced matrix, weak matrix, project-oriented, PMO, composite)
  • Complexity (simple, multi-divisional, virtual)
  • Framework (hybrid)

I’m doing three posts, each covering one of these variables.  In this post, I am covering the variable of operations vs. projects.

Functional organizations

Let’s say a company is doing operations, the regular activities it engages in order to stay in business.   Typically, these activities will be divided into functions, such as accounting, human resources, sales, etc.   If this company wants to do a project, then it needs to take people away from their regular operations work have the people work on the project on a part-time basis.    If the project requires people from various departments, those functional managers will have to give their permission, since it will take people from their regular work during part of each business day for the duration of the project.   In this case, the person who coordinates the project can’t even be said to be a project manager, but rather a project coordinator or expediter.   The resources in terms of money and people for the project will all have to come from functional managers, who essentially all most or all of the authority over a project.   A project coordinator has some limited authority, a project expediter has no decision-making power, and is essentially carrying out the directives given to him or her by the functional manager running the project.

Project-oriented organizations

Let’s go to the opposite extreme and have a company that does mostly projects, called a project-oriented organization.   In this case, the project manager is assigned people who are dedicated to that project and work on it full time.   That manager controls the people and the resources needed to get the project done.

Matrix organizations

In between the two extremes of functional, where there is no project manager per se, to the project-oriented, where there is a project manager and that person is given full authority on the project, there are the matrix organizations which are have a project manager, but with somewhat less than total authority.

A weak matrix organization has a project manager, but the authority rests with the functional manager.   A strong matrix organization has a project manager, who has a moderate to high amount of authority.   A balanced matrix organization would essentially have mixed authority shared by the functional and project manager.   For example, authority over the project budget would normally rest with the project manager, but the availability of the human resources taken from the various departments would rest with the functional manager of those departments.

Composite organizations

This is a company that is large enough that is can use a functional organizational structure for some projects, and a matrix or even a project-oriented organizational structure for other projects.

So the amount of authority a project manager has increases in the following types of organizational structure:

functional → weak matrix → balanced matrix → strong matrix → project-oriented

And a composite organization would mixed the different organizational structure listed above.   In a conversation between Andy Crowe and two other PMPs from his Velociteach corporation, they discussed what type of organizational structure was their favorite to work at as a project manager, and they answered a strong matrix organization.

You would have thought they would have answered a “project-oriented” organizational structure, but here’s the reason why they chose the way they did.   In a strong matrix organization, the authority over the project was almost totally within the purview of the project manager.   However, one of the functions the functional manager served was to handle the human resource related matters related to the project, i.e., monitoring the team sheets of the team members from their department, and taking care of requests for time off, vacations, etc.    In a project-oriented environment, there were no functional managers to speak of, so a project manager had to take on those HR functions as well.   The two PMPs admitted that was NOT a favorite activity of theirs, and so they preferred the strong matrix organizational structure where they didn’t have to worry about any of that, and could concentrate totally on project-oriented activities.

The next variable is the complexity of a project, and this will be the subject of the next post.

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