Project Management in Functional Organizational Structure

In this article, I would like to discuss the project management challenges in companies with Functional (Centralized) organizational structures. In the companies with this kind of organizational structure in most cases, the Manager of Functional Unit (for example, Manager of Business Development Department or IT Department) is assigned as a Project Manager and is responsible for the project and the functional unit at the same time. The functional Manager works with the project part-time and does not take a designated job role like the coordinator of the project. The communication is easy and straight-forward in this case but, monitoring and control are weak. This is called the Weak-Matrix Structure of Project Management. This structure is most suitable for small and medium organizations and for small projects lasting up to one year. But for the projects taking more than a year and involving different functional units with complicated tasks this structure will create a lot of difficulties: Outdo the scope, Exceed the budget, Conflicts between the Project Manager and Project team, Delays in the project deadline.

To overcome all of these difficulties it is vital to have a full-time Project Manager with a designated job role. The Project Manager will lead the project team which has the members temporarily assigned to the project from different functional units and taking full responsibility for the project. Team members directly report to the Functional Unit Manager and the Project manager. The Project Manager works in cooperation with functional units and coordinates the project team and other stakeholders. In this case, the Project Manager has more authority and control over the project and stakeholders. He or She can assign roles to functional units related to the project and easily monitor the process. We call this type of Project management structure Strong-Matrix. The main problem associated with this management method is the communication problems and called "Two-managers" conflict. This requires good conflict management skills from the Project Manager.

I appreciate it if you share your experience in the projects and the main challenges you faced during the project. This can be related to authorization, planning, communication, scope, budget, execution problems. We often try to find the answers to the question “Why the project was unsuccessful? and Who is responsible for this? But it is easy to blame someone and continue to work using the same methods that caused the problems. I think we do not always try to find out the real reasons for the failure of the projects due to the subjective approach to the situation. In most cases the main reason for failure is obvious but no one wants to disclose it when it involves the higher managers and the approach they used to manage the organization. In some cases, the Project Manager is given the authority in the paper, but in reality, he or she does not have enough authority and flexibility to make the decisions and manage the project and impact the main “players” of the organization.

Please give your comments.