PMP 101: Understanding the Different Organizational Structures

Let’s dive deep into a prominent PMI-PMP area of study, Organizational Structures. As a Technical Program Manager, being able to understand your organization’s structure helps you better align with the right leadership influencers, in turn to more effectively communicate, influence decision and execution, better conflict resolution, and more. In this article, we will explore 1) Functional Organizations, 2) Projectized Organizations, 3) Matrix Organizations and 4) Composite Organizations.

1. Functional Organization

A functional organization is demarcated around departments organized along specialized functions, such as marketing, finance, and engineering. Within each department you would have a functional manager leading the work within said department. Companies such as Ford Motor, Pfizer, and IBM subscribe to this organizational model.

Pros

• Clear hierarchy and well-defined roles.
• Specialized expertise within departments.
• Efficient resource use within functions.

Cons

• Siloed communication, making cross-department collaboration challenging.
• Limited career mobility across functions.
• Project managers have little authority and often report to functional managers.

As a TPM, you build relationships with functional managers where the authority is typically held, by understanding their priorities and aligning your program’s goals with their departmental objectives, leveraging SMEs to better understand the specific domain deeper in a technical manner. You need to clearly articulate how your program supports the broader organizational goals.

2. Projectized Organization

A Projectized organization is oriented around projects, where project and program managers have full authority over their projects, with team members reporting directly to them.

Pros

• Program and project managers have significant control and authority over resources.
• Strong focus on project completion and goals.
• Team members are usually co-located, improving communication and team cohesion.

Cons

• Duplication of resources across projects.
• Team members may experience uncertainty when a project ends.
• Potential for inefficient resource utilization when not involved in active projects.

As a TPM you can assert more authority in this organizational type, allowing you to establish a clear vision and direction for the program. Influencing here is more about setting the tone and driving the team towards common goals. Your goal here is to foster a strong team culture as teams are often ad-hoc assembled specifically for projects, hence the need to build a cohesive team culture. Encourage collaboration and open communication to ensure everyone is aligned with the program’s objectives. Make sure to also engage with stakeholders early and often within and outside of the project team through formal and informal channels to maintain strong relationships.

3. Matrix Organization

The matrix organization is a hybrid structure blending elements of both functional and projectized structures, where employees report to both a functional manager and project manager. You see this structure more often than not in companies such as Amazon and Microsoft. There are several types of matrix organizations to be mindful of:

1. Weak Matrix: Closer to a functional structure, where the functional manager has more authority than the project manager.
2. Balanced Matrix: Authority is shared equally between functional and project managers.
3. Strong Matrix: Closer to a projectized structure, where the project manager has more authority than the functional manager.

Pros

• Flexibility in resource allocation across projects.
• Efficient use of expertise and resources.
• Better collaboration across functions.

Cons

• Dual reporting can create conflicts and confusion.
• Complex communication channels.
• Requires strong leadership and negotiation skills from project managers.

As a Technical Program Manager, you navigate dual reporting relationships, where engineers report to both functional and program managers. You need to balance these relationships and maintain strong communication upward and diagonally. You will be negotiating for shared resources and ensure adequate allocation as necessary. You may also need to clarify roles and responsibilities, a common outcome of dual reporting. Finally, you will need to lean on influence through collaboration, by building alliances across functions by fostering a collaborative environment. Engage cross-functional teams by demonstrating how their involvement will lead to program success and, consequently, benefit their own functional goals.

4. Composite Organization

The composite organization uses a combination of different structures, often incorporating elements of functional, projectized, and matrix structures, depending on the specific needs of the organization.

Pros

• Flexibility to adapt to various project and business needs.
• Ability to leverage the strengths of different structures.

Cons

• Can lead to confusion and complexity in management.
• Requires careful planning and communication to manage effectively.

As a TPM, your superpower will need to be in adaptability and flexibility. Composite organizations often mix elements of functional, projectized, and matrix structures. As a PM, you must be adaptable and able to shift your influence strategies depending on the specific context of each project or program. Stakeholders also vary across programs and so you will need to identify key stakeholders early, ensuring their needs and concerns are addressed to maintain support. Finally, you will need to tailor communications styles differently to different parts of the organization, with different levels of communication preferences and decision-making power. Tailor your communication style to fit the context, whether it’s more formal with senior leadership or more collaborative with cross-functional teams.