Projects are achieved through the efforts and integration of people and resources. They influence and impact the targeted environment, internal forces, and surrounding environment, external forces, in which they exist. Organizational composition influences the position and power of the project team and its members. Organizational structure, as defined by the Project Management Institute, is “an enterprise environmental factor that affects the availability of resources and influences how projects are conducted.”
Functional organization is the classical structure of a project. In this hierarchy, each person is grouped by areas of specialization within the organization, such as accounting, marketing and manufacturing. Projects in functionally structured organizations are aligned with the prevailing organization culture, such that information, resources, labor, and equipment is formally requested, approved, and completed all under the discretion and supervision of the leading authority. Any borrowed resources for functionally structured projects must satisfy their traditional work responsibilities before project matters. Project managers have little or no true authority in this organizational structure.
Power and management in the projectized organization is the opposite of the aforementioned structure. Project managers have complete control of the project. Resources are appointed to the project team and released from all traditional responsibilities until completion of the project. The autonomy of the project creates a virtual department within the organization that acts as a cohesive unit. Communications and decision-making authority are self contained within the team.
Matrix structures are a blend of functional and projectized organizations that maximize the strength of each structure. There are three types of matrix organizations: weak, strong and balanced. Weak organizations are characterized by projects that have part-time members, limited control over authority, budget and decisions and multiple lines of responsibility. Strong matrices have dedicated resources, internal control of budget, and moderate levels of control over assets, resources and decision making authority. Balanced matrix organizations represent shared leadership between functional managers and project managers.
Special, or composite, projects are common occurrences in many organizations. These are temporary, commissioned teams designed to address critical, specialized or time-sensitive matters within a company. Resources may be dedicated or temporary, and budgets and authoritative structures can be appointed at the time the project is appointed or vary depending on the level of complexity, breadth and width of the assignment. Standard operational practices may be relaxed to achieve these goals or new policy and process can be established to fill a gap or discrepancy in the existing organization, or structure.