Organization types as defined by the PMI are one of the many new concepts you’ll need to learn if you’re taking project management courses to prepare for your PMP certification. An organization’s reporting structure, as well as the hierarchy of its employees, functions, and workflow, are all determined by its organizational types.
Every organization needs a clearly defined organizational structure to operate effectively and accomplish its business objectives. Some claim that an organization won’t be successful unless it has a clearly defined organizational type and structure that supports its goals. This will assist you in locating the stakeholders and other team members as a project manager.
Project Management Organizational Structure | AIMS UK
Why are organizational structures important?
For a number of reasons, such as the following, organizational structures can be a crucial component of your project management:
Defining who is in charge
Organizational structures can be used to determine who employees report to and how the structure is centralized when working on a project in a company. It’s crucial to establish who employees report to so that a clear ranking system can be created for them to refer to if they have any concerns or questions and are unsure of who to turn to. Additionally, it can assist managers in choosing who to assign tasks to. You can refer to the organizational structure to decide who to contact, for instance, if your project group is engaged in research for a new product and you have a question about the specifics of your research.
Another reason why understanding a structure’s centralization is crucial is that it can reveal who has the authority to make crucial decisions. In a centralized structure, the project leader retains the authority to make plans and decisions. This implies that only the project manager may make decisions without the input of any other managers or supervisors. The project manager delegated some of their authority to lower-level managers and supervisors in a decentralized structure, enabling them to take decisive actions without delay and in an equitable manner.
Grouping by ability
The project can be run more effectively by grouping people and employees using organizational structures. Grouping allows the project to:
The project can create smaller units with a common area of expertise by grouping employees into specialized groups. By doing so, the project may be able to complete some tasks that are more appropriate for the specialized groups. For instance, a team of workers with expertise in 3D design and printing might produce a prototype of a product. They can then give the prototype to a different team of workers who are experts at identifying and testing product flaws.
The hope is that by dividing tasks into smaller groups of people, the project managers will be able to complete them more quickly. For instance, a project manager might assign particular research topics to various groups within the organizational structure if they want to finish the research of a product’s benefit to customers. As a result, the project manager can combine all the research into a single coherent document once each group has finished its work.
The capacity of organizational structures to communicate guidelines, roles, and processes is another crucial factor. For a company project, the project managers can better inform those groups of their tasks and plan out how they will complete the project efficiently by creating a clearly defined structure and grouping.
What are project management organizational structures?
Different organizational structures for project management can be used to separate and coordinate teams of employees and individuals. It frequently consists of a hierarchy that specifies the various roles and enumerates the duties that must be fulfilled in order to accomplish a purpose or finish a project.
Types of organizational structures
Here are eight different organizational structure types and some applications for each:
1. Functional structure
Businesses and corporations may frequently use the functional organizational structure. The company manager is in charge of the structure, and the workers are divided into groups according to their areas of expertise. For example, the company manager may sort the groups into:
Different departments and sections of a company could be made up of these specialized groups created through a functional structure, allowing it to function more effectively. Each division would produce its own output and submit reports to its respective managers. The company manager would then receive their finished tasks from that manager.
2. Line structure
A line organizational structure may be employed by smaller businesses with fewer employees to assign tasks to. There is no doubt about who is in charge thanks to this structure’s clarity and simplification of the organization’s hierarchical structure. This can facilitate quicker communication between staff members and managers as well as faster and more effective work completion. The company manager, for instance, is in charge of the sales, marketing, and development managers. While the development manager supervises the research manager, the sales and marketing managers work independently in their departments.
Although there are several managing employees at the company, the line organizational structure is a straightforward way to define the company’s hierarchy and each role because the company is so small.
3. Line and staff structure
Line structure and functional structure are combined to form the line and staff structure. It is yet another illustration of a system that many businesses and organizations might employ. A hierarchy of managers oversees the structure’s various specialized groups. These groups submit reports to their individual managers, who submit those reports to their own managers.
For instance, the company manager who is in charge of the groups of specialized financial and technical advisors has the responsibility of reporting to the production manager who is in charge of the specialized production teams, such as the research and development team and the technical experts. Similar to the functional structure, each manager is responsible for their own groups. However, each manager receives a rank that is slightly higher or lower than the other in the line and staff structure, so they are not equal.
4. Matrix structure
Project managers and functional managers are the two types of managers who can assign tasks to workers from different departments in the matrix structure. Within their own department, the functional manager concentrates on operational and technical management. They put a lot of effort into making sure their staff members are working as effectively as they can so that the project managers can complete their tasks more quickly.
The project managers concentrate their skills on planning, carrying out, and finishing projects. They often work with several different employees from different departments. A company may have numerous functional and project managers, each with a specific task or division. Then, in order to achieve the objectives of the company, these managers collaborate, combining and sharing their resources.
For instance, a business might have distinct functional managers for its research, sales, and marketing departments. Three new projects are then launched by the business, each with a separate project manager. These project managers will collaborate with the functional managers and utilize the staff members and resources from each department to finish the tasks at hand.
5. Divisional structure
Multiple divisions within a company are covered by the divisional structure, which adapts functional structure techniques. For instance, a company with numerous locations may use a divisional structure to establish a functional hierarchy at each location. Each location ought to have its own division with specialized teams to support it.
For instance, one division of the English company might have a department for marketing, human resources, and research and development. The same departments may exist in another division of the business in Japan, but they may only function for that division’s operations and not for England’s.
6. Organic structure
A decentralized organizational structure with little definition is known as an organic structure. It enables the team to collaborate without the need for direct supervision from a top executive. If a project manager is involved in this kind of system, they typically try to provide some structure but may not have any control over the project staff.
A business operating in a market that is rapidly changing will benefit from this structure because it will enable it to be more adaptable.
7. Virtual structure
A clearly defined structure system is used by a virtual organizational structure, but it is implemented remotely. This makes it easier for the business to operate from various locations and hire workers with extensive knowledge and expertise from around the world. Virtual teams are frequently most advantageous for businesses that deliver a virtual product. Each of their employees can access any resources they need without having to relocate to a new physical location thanks to this.
If a social media marketing company’s product does not require all of its employees to be physically present, for instance, they might complete the majority of their work using a virtual structure.
8. Project structure
An organization may use a project organizational structure as a temporary framework to begin and complete a particular project or goal. This structure is frequently created with a project manager as the chief, who then supervises various departments and groups that each have a distinct responsibility.
For instance, a business might create a project with a research team, a hardware development team, and a software development team if it needs to develop a piece of technology to perform its tasks more effectively. They would then employ a project manager to direct and coordinate each team and carry out a strategy to achieve the objective.
What are the 4 types of organizational structures in project management?
Functional, Matrix, Projectized, and Composite organizations are the four fundamental types, according to PMI.
What are the 3 project management structures?
- Organic or Simple Organization. This kind of business is very adaptable and able to change with the market.
- Line Organization. …
- Line and Staff Organization. …
- Functional Organization. …
- Divisional Organization. …
- Project Organization. …
- Matrix Organization. …
- Virtual Organization.