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Types of Organizational Structures

A project operates with people, process and technology of an organization. Projects have an impact on the culture, policies, procedures and other aspects of an organization. The organizational structure has a major influence on the execution of the project. The organizational structure decides the resources, communication methods and other aspects of project management.

Different types of organizational structures include:

Organizational Structure: Functional Organization


This is the most common form of an organization. Organizational departments are grouped by areas of specialization within different functions. In these organizations, a project generally occurs in silo environment, i.e. within the same function. Team members complete the project work over and above their responsibilities to normal departmental work. Communication primarily occurs within the same function.

Organizational Structure: Projectized Organization


In a projectized environment, the entire company is organized by projects, and the project manager is in control of the projects. Individuals or employees are assigned to projects and report into a project manager. Ones the project is over, they need to be assigned to another project. Communication primarily occurs within the same project.

Organizational Structure: Matrix Organization


In a matrix organization, the team members report into two bosses: the functional manager and the project manager. Communication goes from team members to both bosses. The matrix organization is created to get the best potential from both functional and projected type of organizational structure. Team members have departmental work and they also do project work. Depending on the strength of the matrix organization, the power or level of authority varies between the project manager and the functional manager. In a strong matrix organization, the power remains with the project manager. In a weak matrix organization, the power remains with the functional manager. The project manager is considered to be a coordinator or an escalator. In a balanced matrix, the power is equally balanced between the project manager and the functional manager.

Project/Product Life Cycle

Life Cycle

A progression through a series of developmental stages is termed as a lifecycle.

Product Life Cycle

The product life cycle starts at the conception of a new product and ends at its withdrawal

Project Life Cycle

A project life cycle is required to be executed to produce the deliverables of the project. The life cycle of a project can spawn from initiation phase to its closure phase and may involve some additional or some reduced steps varying from industry to industry.

Project Management Process

A project management process includes Initiating, Planning, Executing, Monitoring and Controlling, and Closing process groups.

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