Question

What are some of the differences between project-oriented and functional organizational structures in terms of their effects on project management?

Do you think that functional organization structure will be better than project-oriented organizations structure for some projects? Why or why not?

Answer 1

`Hey,

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A functional organization is a traditional structure where the organization is divided based on the functions performed by that particular group of people, such as Human Resources, Information Technology, Marketing, Service, etc.

The resource assigned as the “project manager” is usually a team member within a functional area and does not have the title of project manager. The functional manager will control the budget and the “project manager” will act more as a coordinator or expediter of project activities rather than having true project management responsibilities.

Resources for the project will need to be negotiated for with the functional managers and the accessibility of those resources will be based on business conditions. Any type of escalations of issues would need to be made to the functional manager.

Because the “project manager” has little to no authority, the project can take longer to complete than in other organizational structures and there is generally no recognized project management methodology or best practices.

In projectized organizations, the majority of the organization’s resources are involved in project work and the project work is generally completed for the benefit of an external customer. The project manager has increased independence and authority and is a full-time member of a project organization and has project resources available to them, such as project coordinators, project schedulers, business analysts, and plan administrators.
The project manager has authority and control of the budget and any escalation of issues would be made to the sponsor and potentially the PMO leadership. Given that the project resources report into the project manager versus the functional area, there may be a decrease in the subject matter expertise of the team members.

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