In what type of organizational structure do project managers have the least amount of authority group of answer choices functional project matrix circular?

In one of our previous articles, we discussed organizational chart best practices. Now let’s take a look at types of organizational charts structures which can be used in different scenarios. And you don’t have to worry about creating them too. Our organizational chart software supports all the types mentioned below.

Organizational Structure Types

1) Hierarchical Structure

The hierarchical model is the most popular organizational chart type. There are a few models that are derived from this model.

In a hierarchical organization structure, employees are grouped with every employee having one clear supervisor. The grouping is done based on a few factors, hence many models derived from this. Below are few of those factors

• Function – employees are grouped according to the function they provide. The below image shows a functional org chart with finance, technical, HR and admin groups.
• Geography – employees are grouped based on their region. For example in USA employees might be grouped according to the state. If it’s a global company the grouping could be done according to countries.
• Product – If a company is producing multiple products or offering different services it can be grouped according to the product or service.

These are some of the most common factors, but there are many more factors. You can find org chart examples for most of these types in our diagramming community.

A functional organizational structure chart, a variation of the hierarchical model

This is the dominant mode of organization among large organizations. For example Corporations, Governments, and organized religions are hierarchical organizations with different levels of management, power or authority. 

2) Matrix Structure

In a Matrix organizational structure, the reporting relationships are set up as a grid, or matrix, rather than in the traditional hierarchy. It is a type of organizational management in which people with similar skills are pooled for work assignments, resulting in more than one manager to report to (sometimes referred to as solid line and dotted line reports, in reference to traditional business organization charts).

For example, all engineers may be in one engineering department and report to an engineering manager. But these same engineers may be assigned to different projects and might be reporting to those project managers as well. Therefore some engineers might have to work with multiple managers in their job role.

3) Horizontal/Flat Structure

This is an organizational chart type mostly adopted by small companies and start-ups in their early stage. It’s almost impossible to use this model for larger companies with many projects and employees.

The most important thing about this structure is that many levels of middle management are eliminated. This enables employees to make decisions quickly and independently. Thus a well-trained workforce can be more productive by directly getting involved in the decision-making process.

This works well for small companies because work and effort in a small company are relatively transparent. This does not mean that employees don’t have superiors and people to report. Just that decision making power is shared and employees are held accountable for their decisions.

So in summary, when deciding on a suitable organizational chart, it is important to have an understanding of the current organizational structure of your company.

4) Network Structure

Network organizational structure helps visualize both internal and external relationships between managers and top-level management. They are not only less hierarchical but are also more decentralized and more flexible than other structures.

The idea behind the network structure is based on social networks. Its structure relies on open communication and reliable partners; both internal and external. The network structure is viewed as agiler than other structures because it has few tires, more control and bottom flow of decision making.

Using a Network organizational structure is sometimes a disadvantage because of its complexity. The below example of network org chart shows the rapid communication between entities.

5) Divisional Structure

Within a divisional types of organizational charts has its own division which corresponds to either products or geographies. Each division contains the necessary resources and functions needed to support the product line and geography.

Another form of divisional org chart structure is the multi-divisional structure. It’s also known as M-form. It’s a legit structure in which one parent company owns several subsidiary companies, each of which uses the parent company’s brand and name.

The main advantage of the divisional structure is the independent operational flow, that failure of one company does not threaten the existence of the others.

It’s not perfect either. There can be operational inefficiencies from separating specialized functions. Increase in accounting taxes can be seen as another disadvantage.

Divisional organizational structure chart drawn with Creately

Creating org chart with pictures using Creately

6) Line Organizational Structure

Line organizational structure is one of the simplest types of organizational structures. Its authority flows from top to bottom.  Unlike other structures, specialized and supportive services do not take place in these organizations.

The chain of command and each department head has control over their departments. The self-contained department structure can be seen as its main characteristic. Independent decisions can be taken by line officers because of its unified structure.

The main advantage of a line organizational structure can be identified as the effective communication that brings stability to the organization.

7) Team-based Organizational Structure

Team-based organizational structures are made of teams working towards a common goal while working on their individual tasks. They are less hierarchical and they have flexible structures that reinforce problem-solving, decision-making and teamwork.

Team organization structures have changed the way many industries work. Globalization has allowed people in all industries around the world to produce goods and services cooperatively. Especially, manufacturing companies must work together with the suppliers around the globe while keeping the cost to a minimum while producing high-quality products.

Other Types of Organizational Charts

The ones shown above are the most commonly used types of Organizational Charts or organogram structure types as some call them. But there are plenty more models which have various advantages and disadvantages based on the situation and organization. You can easily experiment with different models using our org chart software.

Have questions? Feel free to ask them in the comments or you can reach to us via our social media channels.

Today we will discuss projectized organization structure.

Organizations are having to adapt to stay profitable in this tough market, they must be results-oriented while improving their operations and working conditions.

Organizations must adapt to a suitable structure to achieve their business goals, whether that be a functional, projectized, matrix, or other types of structure.

I have discussed the matrix and functional structures in separate blog posts. Now we will discuss projectized organizations.

Please note that project and projectized are different terms. Projectized is a classification for an organization that deals with projects; many experts call projectized organizations, project-oriented, or project-based organizations.

Projectized Organizational Structure

In projectized organizations, all activities are managed through the projects.

Here, organizations encourage employees to share their lessons learned. At the same time, they allow others to learn and benefit from a shared corporate knowledge base.

Project managers are in charge and they have complete authority over resources. All team members report to them.

Projectized organizations have no functional manager; if they do, their role will be minimal. Moreover, they won’t have any authority. The projectized structure is the opposite of the functional structure.

In projectized organizations, resources are utilized by the project work. These organizations are only interested in external project work. Usually, they have a few small, functional departments that support activities. Examples include admin, accounting, human resources, etc.

A projectized organization has to be dynamic for its survival. They always have to compete with other organizations to win bids. If their quote is high or technically inferior, they will lose the contract.

The project manager has all the authority. This does not mean they have the absolute power to do anything they desire.

For example, let us say that your project is a part of a portfolio. Some idle equipment is needed by another project under the same portfolio. In this case, the portfolio manager will assign this equipment to the other project. You may or you may not agree with this decision, but you have to follow the order.

Project managers have enough authority they need to complete the project and they can accept the responsibility and its outcome.

Characteristics of a Projectized Organizational Structure

The following are a few characteristics of a projectized organizational structure:

• Projectized organizations are dynamic and adaptive.
• Project managers have full authority over project resources. They control the budget and work assignments.
• Project managers have full-time team members under their control.
• Team members are often collocated for better performance until the project ends.
• When the project is completed, the team is disbanded, and resources are released.

Advantages of a Projectized Organizational Structure

These are a few advantages of a projectized organizational structure:

• Team members are loyal to the project goal.
• Team members report directly to project managers; the line of authority is clear. This reduces conflict and decision making is faster and more flexible.
• A single reporting system helps shorten communication lines, creating effective communication within the team.
• Communication is fast because of a single authority. This helps solve stakeholders’ concerns quickly. 
• Being the only authority, project managers can make quick decisions and complete the project faster.
• Communication and cooperation tend to be better because there is a sense of urgency when completing milestones. Hence, new members learn fast.
• Team members become more versatile and flexible due to working on different projects.
• Projectized culture is adaptive. Team members are encouraged to learn from others’ experiences and share their own.

Disadvantages of a Projectized Organizational Structure

These are a few disadvantages of a projectized organizational structure:

• Absolute authority can make project manager arrogant. Lack of power is an issue in a functional organizational structure, while absolute authority can be an issue in a projectized organization.
• Projects always have deadlines and tight schedules, which can make the work environment stressful.
• Poor communication can cause resource duplication if there are multiple projects.
• There is a sense of insecurity among the team members. They know they may lose their jobs once the project is finished. They tend to be less loyal to the organization.
• The cost of employees and equipment can be higher because they are being hired for a shorter period. Moreover, this cost can become much higher if the project is delayed.
• The employees may not be highly skilled in a particular area because they work on so many different projects. This may affect the quality of the deliverable.

Examples of Projectized Organizational Structure

I often receive emails asking for examples of a projectized organizational structure. It is impossible to get a well-known example. Even if an organization is only dealing with projects, they need supporting departments to take care of routine tasks like admin, finance, human resources, etc.

Initially, when the organization is small, it is easier to be a projectized organization; a freelancer taking on a project or hiring temporary staff to complete a task.

However, as organizations grow and become bigger, they need to adapt and take on characteristics of a strong matrix organization.

Summary

Projectized organizations are dynamic and they adapt quickly. In this organizational structure, project managers have a central role. They control everything. The PMO, portfolio manager, or program manager provides support to the project manager. However, project managers are responsible for the project and its outcome.

Are you working in a projectized organization? Please share your experiences in the comments section.

Further readings: Strategic alignment of project management organizational structure