Organizational Structure in Project Management

Organizational structure is an enterprise environmental factor which can affect the availability of resources and influence how projects are conducted. Organizational structures range from functional to projectized, with a variety of matrix structures between them. The table below shows key project-related characteristics of the major types of organizational structures.



1. Functional organization, is a hierarchy where each employee has one clear superior. Staff members are grouped by specialty, such as production, marketing, engineering, and accounting at the top level. Specialties may be further subdivided into functional organizations, such as mechanical and electrical engineering. Each department in a functional organization will do its project work independent of other departments.

2. Matrix organization, is a blend of functional and projectized characteristics.

• Weak matrices maintain many of the characteristics of a functional organization, and the project manager role is more of a coordinator or expediter than that of a true project manager. 
• Strong matrices have many of the characteristics of the projectized organization, and can have full-time project managers with considerable authority and full-time project administrative staff. 
• Balanced matrix organization recognizes the need for a project manager, it does not provide the project manager with the full authority over the project and project funding.

3. Projectized organization, is a hierarchy where team members are often co-located, most of the organization's resources are involved in project work, and project managers have a great deal of independence and authority. Projectized organizations often have organizational units called departments, but these groups either report directly to the project manager or provide support services to the various projects.

Many organizations involve all these structures at various levels. For example, even a fundamentally functional organization may create a special project team to handle a critical project. Such a team may have many of the characteristics of a project team in a projectized organization. The team may include full-time staff from different functional departments, may develop its own set of operating procedures, and may operate outside the standard, formalized reporting structure.

Source: Project Management Body of Knowledge (PMBOK® Guide)

Project Management Knowledge Areas

Project management knowledge areas describe the key competencies that project managers mus develop. There are nine knowledge areas of project management. The four core knowledge areas of project management include project scope, time, cost, and quality management. These are core knowledge areas because they lead to specific project objectives. Brief descriptions of each core knowledge area are as follows:

• Project scope management, involves defining and managing all the work required to complete the project successfully.
• Project time management, includes estimating how long it will take to complete the work, developing an acceptable project schedule, and ensuring timely completion of the project.
• Project cost management, consists of preparing and managing the budget for the project.
• Project quality management, ensures that the project will satisfy the stated or implied needs for which it was undertaken.

The four facilitating knowledge areas of project management are human resource, communications, risk, and procurement management. These are called facilitating areas because they are the processes through which the project objectives are achieved. Brief descriptions of each facilitating knowledge area are as follows:

• Project human resource management, is concerned with making effective use of the people involved with the project.
• Project communications management, involves generating, collecting, disseminating, and storing project information.
• Project risk management, includes identifying, analyzing, and responding to risks related to the project.
• Project procurement management, involves acquiring or procuring goods and services for a project from outside the performing organization.

Project integration management, the ninth knowledge area, is an overarching function that affects and is affected by all of the other knowledge areas. Project managers must have knowledge and skills in all nine of these areas.

Project Management Offices

The concept of a project management office, sometimes referred to as the PMO, has been around for several years. You’ll find that many organizations are establishing PMOs in many different forms. PMOs might also be called project offices or program management offices. The PMO is usually a centralized organizational unit that oversees the management of projects and programs throughout the organization. The most common reason a company starts a project management office is to establish and maintain procedures and standards for project management methodologies.

In some organizations, project managers and team members might report directly to the PMO and are assigned to projects as they are initiated. In other organizations, the PMO provides support functions only for projects and trains others in project management procedures and techniques. Still others, depending on their size and function, have experts available that assist project managers in project planning, estimating, and business assumption verification tasks. They serve as mentors to junior-level project managers and act as consultants to the senior project managers.

The PMO usually has responsibility for maintaining and archiving project documentation for future reference. This office compares project goals with project progress and gives feedback to the project teams. It also measures the project performance of active projects and suggests corrective actions. The PMO evaluates completed projects for their adherence to the project plan and asks questions like “Did the project meet the time frames established?” and “Did it stay within budget?” and “Was the quality acceptable?”

Project management offices are becoming more common in organizations today, if for no other reason than to serve as a collection point for project documentation. Some PMOs are fairly sophisticated and prescribe the standards and methodologies to be used in all project phases across the enterprise. Still others provide all these functions and also offer project management consulting services. However, the establishment of a PMO is not required in order for you to apply good project management practices to your next project.