8 Common Types of Organizational Structures in Project Management

6. Project Organization

Project organization is a temporary setup formed for specific projects. It's also called “projectized organizational structure.” The project manager assigned for the project is the head of this structure.

Once the project is complete, you may choose to dismantle this setup or move it to form a new project. In the case of a new project, the project manager might have to reshuffle the staff to fit the new plan. You’ll hire resources or specialists from different functional departments.

As a project manager, you can use allotted resources until completion and closeout. Albeit you're accountable for all the activities and timely completion of the project. In other words, you must spend based on the project budget.

The manager assigns clearly defined tasks to each of the team members, along with the complete schedule.

These types of organizations are useful when:

    - The project scope is complete, and objectives are clearly defined

    - Project is unique and independent

 

Advantages Easy to communicate, hence can stay up to date The team can have a strong sense of identity as all are working together to achieve a common goal Manage resources efficiently and effectively Disadvantages No clear growth path for the team once the project gets completed It's expensive because the organization dedicates all the specialists for one single project.

 

7. Matrix Organization

This one is the combination of a projectized and functional organization. This hybrid organization overcomes the limitations of each organization. Here, both the functional and project managers share their respective authorities.

Project managers are generally responsible for

    - Overall integration

    - Project planning

    - Execution of the project, and

    - Completion of project activities.

All activities must be done using the assigned resources.

The functional managers are concerned with the operational aspects of the project. They’re also responsible for providing technical guidance.

The functional staff specializes in the skills required for the project. Though project managers manage the project staff, functional managers control the process.

This type of organization is most useful when workers must share available resources. The combination achieves high efficiency and better usage of available resources. Also, they adapt better to the changing trends.

You can further classify the Matrix Organization into

    - Balanced

    - Strong and

    - Weak

The authority level that both functional and project managers share determines its strength.

 

Advantages It helps in sharing resources efficiently Decision making is balanced and flexible Staff members can communicate with each other across boundaries Pleasant environment It has a clear career graph and job security; hence, members would be more loyal to the organization Disadvantages The dual reporting structure add confusion and results in conflicts Create issues when there is no coordination between functional and project managers Resources may be under-utilized if you don't assign them with skill-related tasks Costly to maintain as it has many managers You need to maintain resources throughout the project, no matter how long it takes

8. Virtual Organization

A virtual organization is a recent development that involves different locations. When your team executes a project in one area, you can manage it from any other place. So you can distribute resources to your project team regardless of location.

You can connect all the locations virtually. The other names for this organizational structure are:

    - Digital organization

    - Network organization, or

    - Modular organization

ICT (Information and Communication Technology) is the backbone of virtual organizations. This organization is a social network without vertical and horizontal boundaries.

Resources aren't tied to a particular workstation (desk). Also, you can work from any mobile device. You can manage every project activity, including meetings, virtually.

The team reports digitally except on a few occasions that need physical meetings. Hence, it's common to hear of virtual offices, virtual teams, and virtual leadership

This setup is most suitable for software or IT companies.

Advantages Faster and cost-effective as there are no boundaries to work and communication. Lower operating costs as no permanent set up required (no need for office premises) Have several options like flexitime, part-time work, job-sharing, and home-based working, hence increased Employee satisfaction and efficiency Can have a larger talent pool Disadvantages No physical contact or communication, thus, lacks team integrity Difficult to restrict information sharing as your locations are different You have to spread resources across various locations and time zones Resources require training for virtual interaction Different time zones cause delayed responses

Wrap Up

With the different types of organization structures, it’s easy to know what you need. Though each structure has limitations, large and complex organizations adopt the matrix organization.

Line and staff organization has a direct and straightforward hierarchy. Hence it's used in simple organizations. Software or information technology businesses often adopt virtual organizations.

Albeit choosing the right organization, type ensures that you do well in the market.