Types of Organizational Structure in Project Management
Updated on Jun 23, 2023 | 7 min read | 6.3k views
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Updated on Jun 23, 2023 | 7 min read | 6.3k views
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Every project management plan maintains an organisational structure defining the employee hierarchy and the roles and responsibilities of everyone associated with the project. Having a defined project organisational structure helps to foster efficiency and ensures seamless and quick execution of the project.
Read this blog to learn about the different types of organisational structures in project management, factors to consider before choosing one, best practices and examples.
The functional organisation structure is commonly seen in corporations, with the company manager leading the structure. The other employees of the organisation are assigned roles in various niches, such as human resources, customer service, quality assurance, R&D, sales, etc., based on their skills and expertise.
Different departments specialise in different tasks and report to their respective managers. This structure enhances effectiveness and ensures the task is accomplished efficiently.
The projectized organisational structure is temporary and is enforced when a company starts a project to meet a specific goal. In this structure, a project manager leads the project and oversees the different departments and groups performing specific tasks.
For instance, if a company has to develop technology to help them accomplish their tasks more efficiently, they might consider framing an organisational structure. It can include teams for hardware development, software development, research team, etc., and a project manager who will oversee the tasks.
The matrix organisational structure has two kinds of managers who ensure the task is evenly distributed among the employees across all the departments. While a project manager stresses how to plan the project, looks after its execution, and oversees it till its execution, the functional managers within teams look after the operations and technical management within the departments. They streamline the functioning of all the employees, easing the project managers’ tasks.
A company may have multiple project and functional managers entrusted with managing the tasks within their departments. These managers ensure the optimum utilisation of the company’s resources to meet company goals.
The hybrid organisational structure in project management is similar to the matrix structure. The hybrid organisational structure divides the tasks into different departments based on their nature. This structure ensures optimum knowledge, skills, and resource utilisation while maintaining specialisation in the different divisions.
In this structure, multiple organisational patterns are used together. It combines the different elements extracted from various models for the best results.
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A well-defined organisational structure ensures proper workforce arrangement, techniques, and tasks. It helps maintain organisational transparency and ensures all information is up-to-date.
Several factors must be considered while choosing an organisational structure for project management. Some of the factors that you need to consider while choosing an organisational structure are:
There should also be clarity in the information sources and the reporting relationship that are pivotal in the decision-making process. The structure also provides clarity on the hierarchical relationship.
There should also be tools that can measure the progress with time.
Decentralisation of an organisational structure allows room for open discussion and ensures everyone can air their opinions in the decision-making process. It helps gather valuable information and insights that top-level managers may need to be made aware of.
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Below are some best practices to help you implement your organisational structure most efficiently:
The first step to framing an organisational structure is identifying the right personnel to be involved in the roles. It includes everyone ranging from professionals who will build the projects to those who will manage the different aspects throughout the project management process.
Ideally, it is advisable to create a management team in the senior-most position who can oversee all the project areas. These professionals should be skilled in their respective domains.
There should also be project coordinators for all the departments. Although they should know what is happening in the departments, they must also have adequate domain knowledge.
The groups executing the different tasks associated with the project’s accomplishment should also receive training. It is crucial to identify the training requirements of the groups and understand the time required to be ready to take up their roles.
Once you have done all the above, prepare a project organisation chart. The project organisation chart will give a clear understanding of the roles and responsibilities of the professionals comprising the project management team structure.
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The organisational structures in project management vary depending on the requirements and goals of the project. Below are some examples to depict organisational structures in project management.
1. Functional project organisational structure example in manufacturing
A functional project management structure in the manufacturing department depicts a straightforward structure. All the functional managers, like the marketing, manufacturing, and engineering managers, coordinate the project’s different parts and then report to the respective executives.
2. Projectized organisational structure example in the construction sector
The projectized project organisational structure is primarily used In the construction sector. Project managers are tasked with coordinating the project’s different aspects, which they report to the company executive. There may be supporting departments involved in the process.
3. Matrix project organisational structure example in software development
Software development is a complex task and may often require the involvement of cross-functional teams for optimum performance. This organisational structure takes and uses the most convenient features from different structures. Such an organisational structure involves cross-reporting; for instance, technical specialists must report to the head of their discipline and the project manager.
There is no one-size-fits-all approach when choosing the most appropriate organisational structure. The success of an organisational project management structure depends on the organisation’s mission and goals. Various factors determine whether an organisational structure will work in a particular case.
Illustrated below are the differences between each structure based on a few parameters.
Parameter | Functional | Projectized | Matrix | Hybrid |
Pros | The work is accurate since the professionals are skilled in the respective domains. | Issues are resolved quickly. | Different teams work in collaboration with one another, which helps in excellent knowledge sharing. | Increased efficiency |
Ensures speedy execution of tasks | Ensures more transparency | Employees can strengthen their interpersonal skills. | Employees get the opportunity to develop cross-functional skills. | |
Assigning tasks to specialised individuals provides greater clarity about the work. | Excellent cooperation and smooth communication among teams. | Communication is exceptionally smooth. | Ensures greater flexibility | |
Cons | Teams are segregated and may not get to work together and share ideas. | Hiring skilled professionals may be costly. | Slow decision-making process. | Slow decision-making process. |
Lack of coordination among the units | Entire power lying in the hands of the project manager may pose a problem. | Difficult to assess individual employee performance | Conflicts might arise among the departments. |
A well-defined organisational structure ensures proper workforce arrangement, techniques, and tasks. It helps maintain organisational transparency and ensures that all the information is updated.
You can learn more about organisational structures in project management by signing up for the Advanced General Management Programme from IMT Ghaziabad, offered by upGrad. This course will boost your career and help you master job-relevant skills. Visit upGrad to know more!
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