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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 second variable, that of the complexity of the project.

Organic or Simple

This is a simple project, done by a small team of people working side-by-side.  The person who “owns” the project, the project sponsor, is the one who controls the budget.

Multi-divisional

In this project, the scope is larger and therefore it involves people from different parts of the same organization, although they are usually still co-located, meaning working in the same building.    In this case it is the functional manager who is the one who probably manages the project budget.

Virtual

This is a larger project done by an organization that has several different branches, and the meetings are not in person, but virtual meetings to accommodate the fact that the team members are scattered throughout the organization that is itself in different locations.   The budgets authority will usually be shared by functional managers in the various branches.

The biggest change with this variable is not with the project authority, as the complexity of the communications involved.   This is especially true if some of the locations of the company branches are overseas; then cultural awareness must be one of the other skills that the project manager must learn in order to lead an effective team.

The next post deals with the final variable of the organizational structure, that of a company that prefers traditional, agile, or hybrid project management frameworks.

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