Every organization is a little different from every other organization.
Just as no two projects are alike no tour organizations are identical.
However there are some generally accepted characteristics that describe the structure of an organization.
So in this lecture we're going to look at these different organizational structures.
It's really we're talking about how the organization is built.
This influences the amount of power that you have as a project manager.
So it's important to recognize these for your exam because you may get an exam question that describes
a given organizational structure and if you don't know the characteristics of that structure then that's
going to affect how you answer the question because it's all about the power.
It's not all about power but that's generally where we go to as project managers.
So we want to pay attention to these organizational structure types.
There are some factors that we consider here in the structure like I mentioned just power but it's really
it's some other characteristics as well.
So it's the objectives alignment that the organization can structure its company based on how these
satisfy the organizational objectives how we best achieve our goals our vision and strategy we might
structure it by capabilities so sometimes we call it EHLO be lines of business or departments.
So you have the I.T. department in the manufacturing department the sales department.
So it's kind of my capabilities is one way.
That's pretty obvious how to structure an organization.
This also helps for control so we can better focus on the control and the effectiveness of these different
disciplines.
Escalation of decisions so it's easy to see who's in charge.
If we're talking about the manufacturing department or the sales department or the I.T. Department It
also sets up a scope of authority that you know the functional manager the I.T. Department or the CIO
if it will if that's the case that they're going to be in charge of I.T. decisions.
The simplicity of design that we want to get too cumbersome and over engineer how an organizational
structure sometimes though organizations just kind of evolve into this Frankenstein structure because
they've absorbed other groups or other businesses and it doesn't fit exactly 100 percent.
And so you might have two I.T. departments one for data and you know one for the network or what have
you.
So the simplicity of design is always a goal that we don't want to over engineer things for a project
manager.
Obviously these delegation capabilities what are you allowed to do as the PM.
How much authority do you have over Project decisions.
Who's accountable who's responsible accountable means that your response you are accountable you're
the one that makes that decision.
And it comes back to you that you are the one who is accountable it's your accountability responsibilities
means you have to do the work.
You have to get it done.
A lot of times we say roles and responsibilities we don't always see accountability but accountability
means it's if it goes wrong it's on you.
Adaptability means how flexible are you in the organization.
Efficiency what's most efficient for the organization.
How how will this make us.
Are we nimble or are we have some pretty stuffy bureaucracy we have to flow through.
What about cost.
Is that by having these multiple entities in the organization is at a cost savings.
Is that overhead.
How does that affect our cost.
What about the physical location especially in a very large organization you might have sites all around
the world.
And so that affects how nimble you are and how you manage projects and just how the company is structured.
And then we want clear communication who reports to whom it is the P.M. report.
Especially if they have an I.T. project for example that spans all of the different departments.
Who's really in charge of those different decisions.
So these are all organizational structure factors things that we think about when we answer these questions
when we think about these different types of structures we're going to look at in the next slide.
So these are all characteristics that go into the planning or sometimes not very much planning it just
happens or evolves to this.
So let's look at these 10 organizational structures.
I know there's a lot of them here.
You want to recognize these for your exam because the structure you're in will affect how much authority
you have the power is typically shifting between the project manager and the functional manager.
So the 10 different structures or look at all these in detail you have what's called organic or simple
functional sometimes called centralized multi divisional.
Then we have three Matrix structures weak balanced and strong project oriented.
Sometimes called a composite or a hybrid of virtual structure and then there is a hybrid structure and
then a PMO structure.
So let's look at these 10 organizational structure types and their characteristics organic or a simple
structure.
The work groups within the organization are flexible.
So a lot of times we see this not always but it could be a smaller type company where we have a big
project to do and people just jump in and do the work and they work.
The owner the manager the line employees they all jump in and just get the work done.
So it's really not a lot of bureaucracy here it's all focused on getting the work done.
The PM doesn't have a whole lot of authority might be more like a project coordinator or a project.
Expediter really the authority will be like the owner of the organization.
That's why I say it may be a startup company so the owner or the organization is in charge of the budget
and in charge of getting the work done he might have you know just be call the PM but you might also
be called a coordinator or expediter resources that are dedicated to the project or low meaning that
you probably are going to have people that are full time on this project.
Its more like an as needed basis and then the PM probably not going to have administrative staff to
help the project manager so forms and reports and templates that false in the PM You dont have an admin
staff to help.
So organic or simple is just that is very simple.
Remember that the main characteristic here is that people hop in and do the work as needed.
Not real in love with roles in titles or organic or simple structure.
A functional organization are sometimes called centralized.
So there's clear division of business units or lines of business and that's what I was talking about
a bit earlier when we talk about sales marketing finance I.T..
That's probably a functional organization PMS and a functional organization do not have a lot of authority.
It's more the functional manager makes the decision.
Now the project in a functional organization stay within that function.
So you have an I.T. project you have a sales project a manufacturing project that I'm not really using
resources from these other lines of business it's all within this one entity.
Everyone reports to a functional manager including the project manager the PM might be called the team
lead might be called the Project Coordinator or expediter.
Typically this is a part time role for everyone because not only working part time in the project you
also have day to day activities that you're doing IT operations little to no admin staff and the functional
manager manages the project budget.
Now a multi divisional structure has some of the same characteristics as a function.
All the differences though we have replication of functions for each division.
So this idea of having an I.T. department you might have over here the manufacturing division and within
manufacturing you have an I.T. department and then over here you have the finance department or division
and then within it you have an I.T. group so you can have these replication of roles but they only support
the division that they operate in.
So it's similar to the function but it's much larger.
And you had this replication of roles so it's not always efficient.
Not only not always cost efficient but sometimes it's done out of necessity because you have such a
massive organization that you have these replication of roles.
The PM really doesn't have a whole lot of authority like a functional the same way again might be called
a project coordinator resources for the project.
Probably part time because you're doing your day to day activities and you're participating in the project
could be a part time admin staff so you might have someone that serves as what's called a scribe or
administrative assistant that they're going to help with scheduling or keeping minutes and agendas and
things like this.
Again the functional manager is going to manage the project budget.
Now let's talk about the three Matrix structures we have weak balanced and strong that adjective weak
balanced or strong.
That describes the amount of authority the project manager has in relation to the functional manager.
So a weak matrix is where they are in these matrix is where the team comes from all over the company
that it's not just in manufacturing or just in I.T..
So you have a project where you have people from manufacturing and people from finance and people from
I.T. and so on.
So you have these resources from all over the country all over the world it could be the project manager
has very little before though and a weak matrix management is part time.
The project team is part time as well.
The project coordinator or team lead may be the title for the PM and you might have part time admin
staff to help again the functional manager manages the project budget.
The balance major balas matrix describes the amount of authority between the PM and the functional manager
systems are a power struggle here.
Typically the project manager still has a low to moderate amount of authority over the project team.
It's still part time still a part time PM because people have day to day operations they have to tend
to.
You might have a part time and then a straight of staff and again the project manager the functional
manager they're going to have a little power struggle but they share management over the project budget.
So balas Matrix it's really it sounds nice but it's more of a power struggle.
Now a strong matrix very similar characteristics.
But this time the project manager has more authority over the project budget than the functional manager.
So the PM has moderate to high level of power your management of a part time to a nearly full time project
team full time role as a role as a project manager and you might have full time administrative staff.
So a strong matrix is more focused on the projects and the PM.
The next one we have is a project oriented a project oriented means that the groups colocated or not.
They all work on this project full time.
So we come together from around the organization even if we're virtual And this is the only project
we work on any given time.
So it's project oriented.
Sometimes you might see it as Project sized but really as project oriented as what we call it when the
project manager has close to complete control over the team so he has the most power as a high level
of autonomy.
The PM's going to work full time on the project and the team will work full time on this project.
You have a full time administrative staff that they're helping with the logistics at times you may have
a full time scheduler you may have a risk person but they're helping you may have an administrative
assistant there helping manage the project and the project manager manages the budget and project oriented
a virtual organization.
Does it necessarily mean that we're all distributed when we talk about a virtual organization.
What we're really talking about is there we have all these different departments that are involved in
the project and you have one person for each department that represents that department or that group.
So it's kind of like a network among these different groups represented by this one individual.
So this the idea of the point of contact for each different department.
Communication can sometimes be a challenge because you have this one point of contact you have to go
through that person and that person goes down to the team or the stakeholder there gets information
brings it back and gives it back to you the PM and you give it to this guy.
So it just kind of gets kind of messy when it comes to communicating.
The PM really has low authority over this project team because these are all points of contact.
So not a whole lot of authority.
Go back to sharing the authority with a functional manager.
APM can be full time or part time project team members these different points of contact here that are
on the team.
They are likely part time and you might have administrative staff they could be part time or full time
a lot of flex there.
So a virtual organization really kind of describes this.
Networks we think of virtual think of this network node but the nodes are the people the little point
of contacts for each one of those different departments involved a hybrid organization it's just any
type of a blend of all these type and the mash up that you want is a composite structure or a hybrid
organization.
So you have a blend where you are a strong matrix of bring people from all over.
But for this one project you're going to be project oriented you're going to be only working on this
project for the duration.
So it's kind of a special project.
And then the project manager power is just unique to the structure it's you know it's kind of hard to
nail this one down because you make it up.
It's a blend of all these different structures.
Project management offices will talk more about Primos coming up kind of a high level because it does
affect our structure amount of power you have as the PM A PMO is a project management office a PMO organizes
and they manage the control over all projects in an organization.
That organization could be the Enterprise the whole company or it could be just one department.
It's a uniform approach is the goal of being a PM though you want a uniform approach in the PMO.
How project managers share resources across projects they can offer some coaching and communication
help with that.
Do some change control create some processes and policies for change control and they also help resolve
issues.
So that's the PMO a big picture of all of these so some pros and cons quickly not going to belabor the
point here.
Organic or simple prose.
People are flexible.
The cons people can feel overwhelmed because they have this project they have to tend to as well as
their day to day tasks functional functional managers in charge.
PM has little authority multi divisional clear lines of authority.
The cons though you have duplication of efforts.
Project oriented the PM has autonomy and the project team works full time on that project for the duration
of the project.
The cons though your your teams may compete or stockpile resources and they also may have some anxiety
as they are worried about what are they going to do next in the project.
A strong matrix strong Matrix team can be assigned 50 to 90 percent of the duration.
You might have some competition for resources still.
A balance matrix.
The project manager has balance project the authority with management but the function manager or the
PM may be competing.
So there's a little bit of a struggle here for time and in project team members may feel like they have
multiple bosses week matrix the PM has little authority and then the cons of this is the functional
Department.
It's separate is a separate activity and then Team members may feel like there are multiple resources
at once.
A virtual is resources and departments are segmented so there's just the single point of contact and
that creates communication challenges.
The PMO is we have a standard in centralized approach and then it can feel stifling or disconnected
from the project manager.
So there are some quick things here pros and cons don't want to belabor the point.
You can study that at your leisure is probably not overwhelmingly important to know these for your exam.
All right.
No a long lecture here.
Good job.
Keep moving forward.
I'll see you in the next lecture.