Project Management Organizational Structure & Types: Functional, Matrix & Projectized - AIMS UK

Summary

The video script discusses how different organizational structures—functional, projectized, and matrix—affect the authority of project managers and the way projects are managed. It explains the characteristics and pros and cons of each structure. Functional organizations have hierarchical structures where authority lies with functional managers. In projectized organizations, the project manager holds full authority. Matrix organizations blend both structures, with varying degrees of shared authority between project and functional managers, ranging from weak to strong matrix setups. The advantages and challenges of each structure are also highlighted.

Takeaways

• 🏢 Organizational structures influence the authority of project managers and the execution of projects, categorized mainly into three types: Functional, Projectized, and Matrix.
• 🔄 A Functional organization groups people by their specialization, with authority held by functional managers. This structure suits organizations with ongoing operations like manufacturing.
• 🧑‍💼 In a Projectized organization, authority lies with the project manager. The focus is on project work, and team members report directly to the project manager.
• 🔀 Matrix organizations blend features of both Functional and Projectized structures, with employees reporting to both a functional manager and a project manager.
• 💪 A Strong Matrix structure gives more authority to the project manager, similar to a Projectized organization, with most team members dedicated full-time to projects.
• ⚖️ In a Balanced Matrix, authority is shared between the functional manager and the project manager, with both having control over resources and project decisions.
• 🛠️ A Weak Matrix structure is closer to a Functional organization, with the project manager having a part-time role and limited authority, mainly serving as a coordinator.
• 📊 The advantages of a Functional organization include stability, a clear chain of command, and well-defined career growth paths. However, project managers have little formal authority, and resources often compete.
• 🚀 Projectized organizations offer strong communication, fast decision-making, and clear authority. However, they can lead to stress, arrogance, and high costs if projects extend over time.
• 🕹️ Matrix organizations provide visible project objectives and better control over resources but require more administration and complex monitoring due to dual reporting lines.

Q & A

What are the three main types of organizational structures mentioned in the transcript?

The three main types of organizational structures mentioned are functional, projectized, and matrix structures.

What distinguishes a functional organization from a projectized organization?

In a functional organization, authority rests with the functional manager, and employees are grouped based on specialization. In a projectized organization, authority is with the project manager, and the focus is on the project, with team members reporting directly to the project manager.

What are the three types of matrix organizational structures?

The three types of matrix organizational structures are strong matrix, balanced matrix, and weak matrix.

How does the authority of the project manager differ in a strong matrix versus a weak matrix organization?

In a strong matrix, the project manager holds significant authority, similar to a projectized organization. In a weak matrix, the functional manager holds most of the authority, and the project manager has a more limited, part-time role.

What are the advantages of a functional organizational structure?

Advantages of a functional organizational structure include a stable hierarchy, clear chain of command, and opportunities for career growth within specialized functions.

What are the disadvantages of a projectized organization?

Disadvantages of a projectized organization include the potential for the project manager to become overly authoritative, a stressful work environment due to deadlines, and high costs if the project extends over time.

What is the role of the project manager in a balanced matrix organization?

In a balanced matrix, the project manager shares authority with the functional manager. The project manager holds a full-time role but may only have part-time administrative support.

What are the benefits of using a matrix organizational structure?

The benefits of a matrix structure include highly visible project objectives, improved control over resources, and more support from functional areas.

What challenges might arise from using a matrix organizational structure?

Challenges of a matrix structure include extra administrative overhead, complex reporting with multiple bosses for team members, and difficulties in monitoring and controlling projects.

In which type of organizational structure does the project manager have full control over the project budget?

The project manager has full control over the project budget in a projectized organization.

Outlines

00:00

🏗️ Organizational Structures and Project Manager Authority

This paragraph introduces how organizational structure influences project management. It explains that organizations can be structured in three primary ways: functional, projectized, or matrix. The matrix structure is further divided into strong, balanced, and weak types. In functional organizations, authority lies with a functional manager, while in projectized organizations, it rests with the project manager. Matrix structures attempt to balance these two approaches, with varying degrees of authority distributed between project and functional managers depending on whether the matrix is weak, balanced, or strong.

05:01

🔄 Functional Organization: Structure, Advantages, and Disadvantages

The functional organization is hierarchical, grouping people by their area of expertise under a functional manager with matching knowledge. This structure is suited for ongoing operations like manufacturing and production. Functional organizations are divided into specialized departments (e.g., human resources, finance). Advantages include stability, clear career paths, and a straightforward chain of command. However, project managers have little authority, resources are limited, and team members tend to remain loyal to their functional manager, leading to challenges in managing cross-departmental projects.

🚀 Projectized Organization: Structure, Advantages, and Disadvantages

In projectized organizations, the focus is on the project itself rather than functional areas. The project manager holds all authority, and team members report directly to them, often working exclusively on the project. Advantages include clear authority lines, strong communication, and quick decision-making. However, this structure can lead to power imbalances, making project managers overconfident. The work environment may become stressful due to constant deadlines, and elongated projects can drive up costs.

🔀 Matrix Organization: Weak, Balanced, and Strong Structures

Matrix organizations combine the strengths of functional and projectized structures. Employees report to both a functional manager and at least one project manager. Matrix structures are divided into weak, balanced, and strong types. In weak matrices, the project manager has limited authority and team members spend most of their time on functional tasks. Balanced matrices share authority between project and functional managers, while strong matrices give more power to the project manager, with team members almost fully dedicated to the project. Each type has specific advantages and challenges regarding authority and resource management.

⚖️ Advantages and Disadvantages of Matrix Structures

Matrix organizations provide clear project objectives, improved resource management, and better control over project progress. However, they require additional administration and coordination due to the dual reporting lines. This complexity can make it difficult to monitor and manage projects effectively. The influence of the project manager in a matrix structure varies based on the type (weak, balanced, or strong), impacting their control over budget and staff.

Keywords

💡Organizational Structure

Organizational structure refers to how an organization arranges its lines of authority, communications, rights, and duties. It determines the roles of individuals within the organization and influences the authority of the project manager. The structure impacts how projects are conducted and the distribution of power between functional and project managers, as discussed in the video.

💡Functional Organization

A functional organization is a hierarchical structure where employees are grouped based on their specialization, such as marketing, finance, or operations. Supervised by functional managers with expertise in the same field, this structure emphasizes stability and clear lines of authority. However, project managers have little to no formal authority, and team loyalty is often towards the functional manager.

💡Projectized Organization

A projectized organization focuses primarily on projects rather than functional operations. The project manager has full authority, and all team members report directly to them, fostering loyalty to the project instead of functional areas. This structure enables fast decision-making and clear lines of authority but can create stressful work environments with potential for high costs if projects are delayed.

💡Matrix Organization

Matrix organizations combine elements of both functional and projectized structures to balance strengths and minimize weaknesses. Employees report to both functional and project managers, allowing for flexible resource allocation. The matrix structure is further divided into strong, balanced, and weak matrices, with varying degrees of authority shared between project and functional managers.

💡Strong Matrix

In a strong matrix, most authority resides with the project manager, similar to a projectized organization. The project manager has full-time support staff and high control over resources, which allows for greater project management control. This structure aims to empower the project manager to drive the project towards its objectives with significant autonomy.

💡Balanced Matrix

A balanced matrix shares authority equally between the project and functional managers. The project manager has a full-time role but often lacks full-time administrative staff, and responsibilities are split between functional and project management tasks. This approach seeks to balance power, maintaining influence over projects without heavily favoring one manager over the other.

💡Weak Matrix

The weak matrix structure closely resembles a functional organization where the project manager has limited authority and acts more as a coordinator or expediter. They often handle communication and administrative tasks but lack decision-making power. Most team members dedicate a small portion of their time to the project, maintaining primary allegiance to their functional departments.

💡Project Manager Authority

Project manager authority refers to the degree of power a project manager has in guiding project decisions, resources, and team members. Authority varies significantly across different organizational structures; it is highest in projectized organizations and strong matrices and lowest in functional and weak matrix structures. This authority directly impacts project execution and the manager's ability to make independent decisions.

💡Functional Manager

A functional manager is responsible for overseeing a specific department, such as HR, marketing, or finance, within a functional or matrix organization. They have authority over team members in their department and often control the budget and resources. In matrix organizations, the functional manager shares or competes for authority with the project manager, influencing how resources are allocated.

💡Hierarchical Structure

A hierarchical structure is an organizational framework where authority and responsibilities are clearly defined, usually in a top-down manner. Employees report to managers, creating a chain of command. This structure is seen prominently in functional organizations, where it helps ensure clear lines of authority and specialization but can limit flexibility and responsiveness in project management.

Highlights

Organizational structure significantly influences the authority of the project manager and how projects are conducted.

Organizations are structured in one of three ways: functional, projectized, or matrix.

Matrix organization structure is divided into strong matrix, balanced matrix, and weak matrix types.

In a functional organization, project authority rests with the functional manager.

In a projectized organization, authority rests with the project manager, who has all the power.

A matrix organization tries to balance the authority between functional and project managers.

Strong matrix organizations give most authority and power to the project manager.

Weak matrix organizations give most authority to the functional manager, with the project manager in a part-time role.

Balanced matrix organizations share authority between functional and project managers.

Functional organizations are hierarchical, with people grouped by specialization and supervised by a functional manager.

Functional organizations are suitable for ongoing operations such as manufacturing and production.

Projectized organizations focus on the project itself, with the project manager having ultimate authority.

Matrix organizations combine the strengths of functional and projectized structures to minimize differences.

In a functional organization, the project manager has little formal authority and multiple projects compete for resources.

Projectized organizations offer a clear line of authority and strong communication with a single reporting system.

Matrix organizations require extra administration and have more than one boss for project teams.

The influence of the project manager varies significantly across different organizational structures.

Transcripts

[Music]

organizational structure organizational

structure influences the authority of

the project manager and influen that how

projects are conducted all organizations

are structured in one of three ways

functional project do or Matrix Matrix

organization structure is further

divided into three types strong Matrix

balanced Matrix and weak

Matrix project manager Authority and

organizational structures in a

functional organization project

Authority rests with a functional

manager and any proje ised organization

it rests with a project manager a matrix

organization tries to be somewhere in

between these two

in a strong Matrix The Authority is with

a project manager just like in a

projectized organization in a weak

Matrix The Authority is with a

functional manager just like in a

functional organization and in a

balanced Matrix the authority over the

project is shared by both the functional

manager and the project

manager now let us understand the

functional organization a functional

organization structure is a hierarchical

type of organizational structure wherein

people are grouped as per their area of

specialization and supervised by the

functional manager with expertise in the

same field this way their skills can be

effectively utilized and the

organization's objective can be achieved

the functional organizational structure

is suitable for an organization which

has ongoing operations such as

manufacturing and production INF

functional organization is divided into

various specific Department departments

like human resource marketing finance

and

operations the below figure represents a

classic functional organization where

each employee has one clear Superior

grouping occurs from top level down to

the bottom level for example accounting

engineering or marketing Project work of

each group is performed independently

from other

groups now let us see the advantages and

disadvantages ages of a functional

organization its advantages are as

follows it is a stable organization

structure employees have a career growth

path with separation of functions

employees have one supervisor with a

clear chain of command disadvantages of

functional organization are as follows

project manager has little to no formal

Authority multiple projects compete for

limited resources and priority and

project team members will likely to

remain loyal to their functional

manager proje ised

organizations proje ised organizations

are nearly the opposite of functional

organizations the focus of this type of

organization is the project itself the

idea behind a projected organization is

to develop loyalty to the project not to

a functional manager in a projectized

organization the project manager has all

the power and authority and everybody

directly reports to the project

manager the following figure illustrates

a proje ised

organization team members are often

collocated team resources can either

report directly to the project manager

or Provide support services to the

various projects and project managers

almost always have ultimate authority

over the project in this structure and

Report directly to the chief executive

officer now let us see the advantages

and disadvantages of a project ised

organization its advantages are as

follows it has a clear line of authority

strong Communications with a single

reporting system and flexibility in

tradeoffs and fast

decision-making the disadvantages of

projectized organizations are as follows

Authority and power can make the project

manager arrogant the work environment

can be stressful because there is always

a deadline if the project gets elongated

the cost of employees and Equipment can

go

higher let's understand the Matrix

organizations Matrix organizations came

about to minimize the differences

between take advantage of the strengths

and reduce weaknesses of the functional

and proje ised

organizations the best of both

organizational structures can be

realized by combining them into one

employees in a matrix organization

report to one functional manager and to

at least one project manager a matrix

organization structure is further

divided into three types they are weak

Matrix balance Matrix and strong

Matrix weak Matrix in a weak Matrix the

project manager has a part-time role

with very limited power and authority

the team members are only assigned to

projects for 25% or less of their time

for the rest of the time they go back to

functional assignments the role of

project manager will be more like a

coordinator or an

expediter a weak Matrix structure is

very close to the functional

organization

structure the below figure reflects a

blend of functional organizations which

is classified as a weak Matrix structure

the project expediter works as a staff

assistant and Communications coordinator

but they do not make or enforce

decisions project coordinators make some

decisions because they have some

Authority and they report to a higher

level

manager balanced Matrix in a balanced

Matrix power is shared between the

functional manager and the project

manager although the project manager has

a full-time role he has only part-time

project management administrative staff

under him up to 60% of the project team

in a balance Matrix structure are

full-timers in a balance bance Matrix

structure the project manager is

assigned on a full-time basis however

support staff are usually part-time

rather than being fully dedicated to the

project strong Matrix in a strong Matrix

most Authority and power lies with the

project manager the percentage of people

on the project team assigned and

dedicated to a single project may run as

high as

90% in a strong Matrix the project

manager is assigned full-time and has a

full-time support staff however the

support staff still have dual reporting

lines with both their functional

managers and the project

manager following are the advantages and

disadvantages of the Matrix organization

structures advantages of Matrix

organization are as follows it has

highly visible project objectives it

improves project management control over

resources it has more support from

function

areas the disadvantages of a matrix

organization are as follows it requires

extra Administration it requires more

than one boss for project teams it is

more complex to Monitor and

control the influence of project manager

in different organizational structures

is explained Below in functional

organization structure the project

manager has little or no Authority and

is often a part-time person that has a

part-time time project management

administrative staff the functional

manager manages the project budget the

functional structure is the weakest of

all in a weak Matrix the project manager

has limited Authority the role of

project manager is part-time and it may

have part-time administrative staff to

help expedite the project the functional

manager manages the project

budget in a balanced Matrix the project

manager has reasonable Authority the

role of a project manager is full-time

who may have part-time administrative

staff to help expedite the project both

functional manager and project manager

manages the project

budget in a strong Matrix the project

manager has a reasonable to high level

of power and manages the project budget

the role of a project manager is

full-time and it has a full-time

administrative staff to help expedite

the

project in a projectized organization

structure the project manager holds the

highest Authority and manages the

project budget the project is managed by

full-time project manager and

administrative

staff