Understanding organizational styles is more than an academic exercise because choosing the right structure could provide a competitive advantage for a firm. But how does the organizational structure affect you as a project manager? Consider the following:
- Authority. Clearly, the difference between the organizational styles is that some favor projects while others favor ongoing operations. In the function-driven organization, the project manager has almost no authority and in the project-oriented firm, the project manager has total authority. Less authority requires more effort to get decisions made and implemented.
- Communication. Communication is a primary project success factor no matter what the organizational structure. Most organizational structures facilitate vertical (top-down and bottom-up) communication patterns, but your communication requirements may run counter to the prevailing patterns. Crossing organizational boundaries always takes more effort, but you must do whatever is necessary to keep all the stakeholders informed and coordinated.
- Priority. Multiple projects often compete for limited quantities of people, equipment, and funding, especially in firms with the traditional, function-driven management style. Project managers in a function-driven structure often have their teams and resources raided to handle a problem with ongoing operations or to work on a new project.
- Focus. If a firm is project-oriented, you can be certain that projects are the center of its attention and the
reason for its existence. Everyone has a unifying purpose that drives all decisions and helps to increase productivity. This compares favorably with matrix and function-driven organizations, where project team members are often working on projects less than half their time. In these companies, the diffused focus and increased span of responsibilities tend to lower emotional commitment and productivity.
- Chain of command. If the chain of command for a project runs counter to the organizational structure, it takes more effort to bring a problem to the attention of the proper manager. As the project breaks through functional boundaries, more and more functional managers are required to approve decisions. And, if certain functional groups have competing interests, clashes over authority can bring progress to a standstill.
Project-oriented firms make it easy to run projects because their entire structure is set up for that purpose. In most organizations, however, project managers may have difficulties in dealing with the authority structure. In these cases, they will have to rely more on the authority of their own expertise—and on the project management tools.