PMI PMP Project Management Professional – Project Environments Part 3

9. Organizational Structure Types

Every organization is a little different from every other organization. Just as no two projects are like no two organizations are identical. However, there are some generally accepted characteristics that describe the structure of an organization. So in this lecture we’re going to look at these different organizational structures. It’s really we’re talking about how the organization is built. This influences the amount of power that you have as a project manager. So it’s important to recognize these for your exam because you may get an exam question that describes a given organizational structure and if you don’t know the characteristics of that structure, then that’s going to affect how you answer the question. Because it’s all about the power. It’s not all about power, but that’s generally where we go to as project managers. So we want to pay attention to these organizational structure types. There are some factors that we consider here in the structure.

Like I mentioned, just power, but it’s really some other characteristics as well. So it’s the objectives alignment that the organization can structure its company based on how these satisfy the organizational objectives, how we best achieve our goals, our vision and strategy. We might structure it by capability. So sometimes we call it Lob lines of business or departments. So you have the It department, the manufacturing department, the sales department. So it’s kind of by capabilities is one way that’s pretty obvious how to structure an organization. This also helps for control, so we can better focus on the control and the effectiveness of these different disciplines. Escalation of decisions so it’s easy to see who’s in charge if we’re talking about the manufacturing department or the sales department or the It department. It also sets up a scope of authority that, you know, the functional manager of the It department or the CIO if it will, if that’s the case, that they’re going to be in charge of It decisions.

The simplicity of design that we don’t want to get too cumbersome and over engineer how an organization is structured. Sometimes though, organizations just kind of evolve into this Frankenstein structure because they’ve absorbed other groups or other businesses and it doesn’t fit exactly 100%. You might have two It departments, one for data and one for the network or what have you. So the simplicity of design is always a goal that we don’t want to over engineer things for project manager it obviously needs delegation capabilities. What are you allowed to do as the PM? How much authority do you have over project decisions? Who’s accountable? Who’s responsible? Accountable means that you are accountable. You’re the one that makes that decision and it comes back to you that you are the one who is accountable. It’s your accountability.

 Responsibilities means you have to do the work, you have to get it done. A lot of times we say roles and responsibilities and we don’t always see accountability. But accountability means if it goes wrong, it’s on you. Adaptability means? How flexible are you in the organization? Efficiency? What’s most efficient for the organization? How will this make us? Are we nimble or do we have some pretty stuffy bureaucracy we have to flow through? What about cost? Is it by having these multiple entities in the organization? Is that a cost savings? Is that overhead? How does that affect our cost? What about the physical location? Especially in a very large organization, you might have sites all around the world and so that affects how nimble you are and how you manage projects and just how the company is structured. And then we want clear communication.

Who reports to whom, who does the PM report to? Especially if they have an It project, for example, that spans all of the different departments. So who’s really in charge of those different decisions? So these are all organizational structure factors, things that we think about when we answer these questions, when we think about these different types of structures we’re going to look at in the next slide. So these are all characteristics that go into the planning, or sometimes not very much planning. It just happens or evolves to this. So let’s look at these ten organizational structures. I know there’s a lot of them here. You want to recognize these for your exam because the structure you’re in will affect how much authority you have.

The power is typically shifting between the project manager and the functional manager. So the ten different structures, we’re going to look at all these in detail. You have what’s called organic or simple. You have functional, sometimes called centralized, multidivisional. Then we have three matrix structures, weak, balanced and strong project oriented, sometimes called a composite or a hybrid, a virtual structure. And then there is a hybrid structure and then a PMO structure. So let’s look at these ten organizational structure types and their characteristics. Organic or a simple structure. The work groups within the organization are flexible. So a lot of times we see this, not always, but it could be a smaller type company where we have a big project to do and people just jump in and do the work and they work the the owner, the manager, the line employees, they all jump in and just get the work done. So it’s really not a lot of your accuracy here. It’s all focused on getting the work done. The PM doesn’t have a whole lot of authority.

Might be more like a project coordinator or a project expediter, really. The authority would be like the owner of the organization. That’s why I say it may be a startup company. So the owner of the organization is in charge of the budget, in charge of getting the work done. You might have just be called a PM, but you might also be called a coordinator or expediter. Resources that are dedicated to the project are low, meaning that you probably aren’t going to have people that are full time on this project. It’s more like an as needed basis. And then the PM, they’re probably not going to have administrative staff to help the project manager. So forms and reports and templates, a lot of that falls on the PM. You don’t have an admin staff to help.

So organic or simple is just that, it’s very simple. Remember, the main characteristic here is that people hop in and do the work as needed, not real in love with roles and titles. On organic or simple structure, a functional organization are sometimes called centralized. So there’s clear division of business units or lines of business. And that’s what I was talking about a bit earlier. When we talk about sales, marketing, finance, it that’s probably a functional organization. PMS in a functional organization do not have a lot of authority. It’s more the functional manager makes a decision. Now the projects in a functional organization stay within that function.

So you have an It project, you have a sales project, a manufacturing project that I’m not really using resources from these other lines of business. It’s all within this one entity. Everyone reports to a functional manager, including the project manager. The PM might be called a team lead, might be called a project coordinator or expediter. Typically this is a part time role for everyone because not only working part time on the project, you also have day to day activities that you’re doing in operations. Little to no admin staff and the functional manager manages the project budget. Now, a multidivisional structure has some of the same characteristics as a functional. The difference is though, we have replication of functions for each division.

So this idea of having an It department, you might have over here the manufacturing division and within manufacturing you have an It department and then over here you have the finance department or division. And then within it you have an It group. So you could have these replication of roles, but they only support the division that they operate in. So it’s similar to the function but it’s much larger. And you have this replication of roles. So it’s not always efficient, not always cost efficient, but sometimes it’s done out of necessity because you have such a massive organization that you have these replication of roles. The PM really doesn’t have a whole lot of authority like a functional the same way again might be called a project coordinator.

Resources for the project probably part time because you’re doing your day to day activities and you’re participating in the project. Could be a part time admin staff. So you might have someone that serves as what’s called a scribe or an administrative assistant that they’re going to help with scheduling or keeping minutes and agendas and things like this. Again, the functional manager is going to manage the project budget. Now let’s talk about the three matrix structures. We have weak, balanced and strong. That adjective of weak, balanced or strong. That describes the amount of authority the project manager has in relation to the functional manager.

So a weak matrix or any of these matrix is where the team comes from all over the company, that it’s not just in manufacturing or just in it. So you have a project where you have people from manufacturing and people from finance and people from It and so on. So you have these resources from all over the country, all over the world. It could be. The project manager has very little authority though in a weak matrix. Management is part time. The project team is part time as well. The project coordinator or team lead may be the title for the PM and you might have part time admin staff to help. Again, the functional manager manages the project budget. The balance matrix, a balanced matrix describes the amount of authority between a PM and the functional manager.

So sometimes there’s a power struggle here. Typically the project manager still has a low to moderate amount of authority over the project team. It’s still part time, it’s still a part time PM because people have day to day operations they have to attend to. You might have a part time administrative staff and again the project manager and the functional manager, they’re going to have a little power struggle but they share management over the project budget. So balanced matrix, it sounds nice but it’s more of a power struggle now. A strong matrix, very similar characteristics. But this time the project manager has more authority over the project budget than the functional manager. So the PM has moderate to high level of power. Your management of a part time to a nearly full time project team full time role is a role as a project manager and you might have full time administrative staff. So a strong matrix is more focused on the projects in the PM.

The next one we have is a project oriented. A project oriented means that the groups colocated or not, they all work on this project full time. So we come together from around the organization even if we’re virtual and this is the only project we work on at a given time. So it’s project oriented. Sometimes you might see it as projectized but really it’s project oriented is what we call it. Town. The project manager has close to complete control over the team, so he has the most power as a high level of autonomy. The PM is going to work full time on the project and the team will work full time on this project. You have a full time administrative staff that they’re helping with the logistics.

As long as you might have a full time scheduler, you might have a risk person, but they’re helping, you might have an administrative assistant, they’re helping manage the project and the project manager manages the budget and project oriented. A virtual organization doesn’t necessarily mean that we’re all distributed when we talk about a virtual organization. What we’re really talking about is we have all these different departments that are involved in the project and you have one person for each department that represents that department or that group. So it’s kind of like a network among these different groups represented by this one individual. So this is the idea of the point of contact for each different department.

Communication can sometimes be a challenge because you have this one point of contact, so you have to go through that person and that person goes down to the team or the stakeholder there, gets information, brings it back and gives it back to you, the PM, and then you give it to this guy. So it just kind of gets kind of messy when it comes to communicating. The PM really has low authority over this project team because these are all points of contact. So there’s not a whole lot of authority. They go back to sharing the authority with a functional manager. A PM could be full time or part time project team members. These different points of contact out here that are on the team, they’re likely part time and you might have administrative staff. They could be part time or full time. A lot of flex there. So a virtual organization really kind of describes this network.

So when you think of virtual, think of this network node. But the nodes are the people. The little point of contacts for each one of those different departments involved a hybrid organization. It’s just any type of a blend of all these any type of a mash up that you want is a composite structure or a hybrid organization. So you have a blend where you are a strong matrix. You bring people from all over. But for this one project you’re going to be a projectoriented. You’re going to be only working on this project for the duration. So it’s kind of a special project. And then the project manager power is just unique to the structure. It’s kind of hard to nail this one down because you make it up. It’s a blend of all these different structures. Project Management Offices we’ll talk more about PMOs coming up kind of a high level because it does affect our structure and the amount of power you have as the PM. A PMO is a project management office.

A PMO organizes and they manage the control over all projects in an organization. That organization could be the enterprise, the whole company, or it could be just one department. It’s a uniform approach is the goal of being a PM, though you want a uniform approach. And the PMOs help project managers share resources across projects. They can offer some coaching and communication, help with that, do some change control, create some processes and policies for change control. And they also help resolve issues. So that’s A PMO a big picture of all of these. So some pros and cons quickly. I’m not going to belabor the point here. Organic are simple. The pros people are flexible. The cons people can feel overwhelmed because they have this project they have to tend to as well as their day to day task. Functional. Functional managers in charge.

PM has little authority. multidivisional clear lines of authority. The cons though you have duplication of efforts project oriented. The PM has autonomy and the project team works full time on that project for the duration of the project. The cons though your teams may compete or stockpile resources and they also may have some anxiety as they are worried about what are they going to do next in the project. A strong matrix. Strong matrix team can be assigned to 50% to 90% of the duration. You might have some competition for resources. Still a balanced matrix. The project manager has balanced project authority with management. But the functional manager of the PM may be competing. So there’s a little bit of struggle here for time. And then project team members may feel like they have multiple bosses.

Weak matrix. The PM has little authority. And then the cons of this is the functional department. It’s separate, it’s a separate activity. And then team members may feel like there are multiple resources at once. A virtual Is resources and departments are segmented. So there’s just a single point of contact and that creates communication challenges. The PMO is we have a standard and centralized approach and then it can feel stifling or disconnected from the project manager. So there’s some quick things here. Pros and Cons didn’t want to belabor the point. You can study that at your leisure. It’s probably not overwhelmingly important to know these for your exam. All right, I know a long lecture here. Good job, keep moving forward. I’ll see you in the next lecture.

10. Project Management Office

We’ve talked a little bit already about project management offices and how they can help or support the project manager. But there are some more characteristics you need to know for your exam. The Project management office is a uniform approach for project management in that organization. And remember, a PMO can exist in the whole organization, organization, a department of lines of business. But a PMO is generally there to have some control over the projects within that domain, whether it’s the whole company or organization or different departments or lines of business. The goal is to support, not surprise, it’s going to support the project manager.

The PMO provides organizational process assets, so templates, forms, software, things that help the project manager do their job. There are some different types of PMOs, though you want to be familiar with. The first one is a directive PMO. A directive PMO is where the project manager is really part of the PMO. The PMO manages and controls all projects, so the PMO control is very high. Where the PM is part of the PMO, an organization wants to do a project, or a team wants to do a project, or a stakeholder wants to do a project. They give that project to the PMO and the PMO controls it, that they have a uniform approach and they do everything as far as project management goes with all projects in that organization.

Then we have what’s called a controlling PMO. The controlling PMO defines project governance that they set up, what the governance will be for projects. So they kind of create the framework and give it to the project managers. Where the PM isn’t necessarily part of the PMO, they have required templates and forms and oversight. They define what the project management activities are, they set communication requirements, and so the PMO control is considered moderate. It’s like they give the framework and the structure to the project manager. And so there is some oversight, but they’re definitely not as controlling as we saw in the directive.

The next PMO is supporting. A supportive PMO is where the PMO acts as a coach or a consultant. And they can help the project manager, but they don’t really control the project manager. So they’re more of a consultative role. So they’re giving advice and forms and software and best practices, but they’re not really telling the PM how to do the work. So you have directive with the most control, and then we have controlling, but just a little bit less it’s a little bit more moderate control and then very low in control. It’s the support of PMI. All right, so know those three types of PMOs, just as if, you know, the organization types keep moving forward.

11. PMP Coach: Keep going!

I’m a big believer in momentum. I think the hardest part is just getting started. Once you get started, though, you start getting momentum. Momentum is that energy that keeps moving you forward. It’s so important in your efforts to pass the exam, to pass the PMP that you find momentum, that you find a way to keep going, to find some daily time to involve in studying for your PMP. We also need to look at the big picture here. This is not going to last forever like a project. It’s not going to go on and on and on forever. I’ve met people or talked to people that have taken the whole year from when their application was approved to actually go sit for the exam. Frankly, not a good idea. Compress that. Compact it rather than stretch out your misery over a year.

And to get disconnected with this information over a year sooner is better. As we talked about earlier, and as you did in one of your assignments, was to create a study strategy. If your goal is a year to pass this exam, by the time you get to muff nine or ten, look at how much time has passed and how you’re going to lose touch with this information. Like most things in life, the longer you wait, the worse it’s going to be. So you really want to compact that effort, find momentum, compact the effort, be dedicated and get it done. I have confidence that you can do this. In fact, I know that you can do this. So find effort, find the time, find the energy, create momentum, stay in this course. You’re doing a great job. You’ve already covered a lot of material, and now we’re going to be starting to get into the more specific knowledge areas as we work our way through the Pinball guide. So I have confidence that you can do this. Keep moving forward and I’ll see you in the next lecture.

12. Section Wrap: Project Environments

Great job finishing this section on Project environments. I told you it was a lot of information, right? A lot of things to cover Well, you did it. You knocked out Section Eight here on project environments. Good job. In this section, we talked about enterprise environmental factors and organizational SS assets, which you know as EEF and OPA. So we’ll see that over and over. Throughout this course, we looked at the different processes, policies, and procedures that are unique to your environment that you have to follow as a PM where you work.

And then we looked at organizational knowledge repositories, the new process in Pinbox Six that we’ll see coming up about knowledge management. So you can see how that’s going to tie in. So this sets us up for this idea of knowledge repositories. That how do we take that data and that information from our past projects? And how can we quickly access that and be able to apply it and use it in our current project? So we’re talking about cataloging. So how do you catalog it electronically? How do you archive it? Is it retrievable? So do you have to go dig through a closet somewhere? Hopefully not, but it’s electronic that you can search it and retrieve it. Organizational process assets, these are part of your knowledge repositories. So historical information so that allows me then to pull from that and apply it to my current project. We always archive that closure.

So it’s never an option to not archive. We always archive at closure because that’s part of the business value. That’s part of the things that we’re creating as part of the project. Project deliverables are not always things that the customer gets. It could also be things that we get and that we retain as the organization.

So knowledge gain tools, equipment. In this case, it’s knowledge. So how do we retrieve that knowledge? We looked at organizational systems and frameworks, how your company structured and the systems that you follow to get work done or that you create to get work done. So you need a system. And then we looked at those different structure types. Probably the most important thing in this section are the organizational structure types. I know you completed an assignment, right, on recognizing these different organizational types.

Really important. Good job. And then we talked about the project management office. Okay, very good. You’ve covered a lot of material. You knocked out this stuff on Project Environments. Keep moving forward. We’re getting closer and closer to getting into those knowledge areas where I know you want to go, but this stuff’s really important as well. You’re going to be tested on this, and this will affect how you answer questions successfully. All right, I’m proud of you. You’ve made great progress. Keep going. You can do it.