Subtitles of the Movie

In the previous movie we went through a quick overview of the Project Environment, specifically the Internal and External factors that influence and make up the Project Environment. Part of the first item for review on our list included Organizational Structures. In this movie we'll go through a Snapshot Review of the Organizational Structures. Knowing the difference between a Functional, Projectized, and Matrix organization is important to Risk Management. Let's go through these closely to make sure that you understand on how they differ. The various structures include: Functional; Matrix, which has sub-organizational structures including a Weak Matrix, Balanced Matrix, and Strong Matrix; and, lastly, Projectized. Let's begin with Functional. A Functional organization is the more traditional type of organization where the company is divided into departments and each department is led by a department manager or what PMI calls Functional Manager, who typically reports to either the President or CEO. There is a clear chain of command, it's structured as a hierarchy. Typically the Project Manager reports to a Functional Manager, who is responsible for the project coordination and, many times, the Project Manager has other job functions. In these cases, the Project Manager usually manages projects within their functional department. The advantages of this kind of organizational structure includes: there is a clear reporting structure; there is room for advancements; it's stable; and, it's grouped by specialization. And the disadvantages are: the Project Manager has minimal authority; there's no room for growth in the Project Management field; Resources are limited; and, the project team is focused on their specialty, not the project. Let's now move on to a Projectized Organization. A Projectized Organization is almost the entire opposite of a Functional one. This organization revolves around the projects it manages and the Project Managers are the ones with the authority, reporting directly to the CEO. The concept of this type of organization is to center around the projects. Those working on the project typically have loyalty to that project unlike what we saw in the Functional type where they have loyalty to the Functional Manager and their department. In the Projectized Organization these types of competing priorities don't exist. A Project Manager has the authority to obtain resources and, if they are not able to obtain them within the organization then, budget permitting they hire them. Let's go through the advantages and disadvantages. Advantages include: the Project Manager has high to almost all authority; there's efficient project management; and, there are loyalties to the project. The disadvantages include: Inefficient use of resources; it's unstable; and, there's no in-house expertise readily available. Next, let's review Matrix Organizations. There are three types of Matrix Organizations. Matrix Organizations are a blend of Functional and Projectized. The whole idea is to benefit from the advantages of both. One of the differences that exists within Matrix Organizations is the staff working on projects reports not only to a Functional Manager, but also the Project Manager of the project they're working on. The three types of Matrix Organizations are: Weak Matrix, which leans more toward a Functional Organization; Balanced Matrix, that involves a nice blend of both Functional and Projectized; and, a Strong Matrix, which leans more toward Projectized Organizations. Next, let's go through the advantages and disadvantages of these organizational types under Matrix. The advantages include: within a Weak Matrix there's project coordination and there's better project communication; within a Balanced Matrix there's strong project communication and efficient project management; and in a Strong Matrix, the staff is not disbanded after projects and there's efficient project communication. The disadvantages include: within a Weak Matrix there's a dual reporting relationship and a complex staff management arrangement; in a Balanced Matrix, there's also a dual reporting relationship, there's also potential for conflict between the Functional Manager and the Project Manager because of this; and, within a Strong Matrix, once again we see that dual reporting relationship and a potential for conflict between the Functional Manager and Project Manager once again. And that covers the various Organizational Structures overall. Knowing the organizational structure that a project functions within plays an immense role in identifying risks and particularly how you'll respond to risk. We'll pause this movie here and continue on with a review of the Project Environment in the next movie.