The right project management organizational structure can make work so much easier. But how do you choose the right organizational structure for the job?\nWe’ve got answers for you. Meet our imaginary project manager, Steffie:\n\nSteffie is working on a marketing project for the e-commerce company she works for. We’ll use Steffie and her work as an example throughout this article.\nFirst, let’s cover the basics.\nWhat is project management organizational structure?\nYour project management organizational structure tells you who has authority over a project. The simplest way to think about it is to picture an org chart. Project managers have a different amount of authority in each structure.\nOrganizational structure determines how the team spends their time and who makes the final decisions. The project manager roles and responsibilities will be a little different depending on the structure you choose.\nAll of these structures work with most of your existing Agile practices. Strategies like work breakdown structures and well-planned workflows still apply.\nOrganizational structure types – pros and cons\nThere are 3 main project management organizational structures:\n\nProject Organizational Structure\nFunctional Organizational Structure\nMatrix Organizational Structure\n\nSteffie is going to help us get to know each one.\n1. Project organizational structure\nIn this structure, the project manager is the decision-maker. Members of the team are dedicated to the project, and they report directly to the project manager.\nPicture the project team as its own department with the project manager as its leader. This structure gives project managers the most authority.\nProject management organizational structure works well for companies that have enough resources to dedicate an entire team to a single project. Working this way can be expensive, though. That means there’s more pressure to perform.\n\n\n\n\nPros\nCons\n\n\nDedicated teams can produce stellar results\nDedicated teams take resources away from business-as-usual functions. This is expensive\n\n\nBecause the project manager is the decision-maker, results are driven by project needs. There’s less noise from other business needs to influence the end result\nDepending on the length of the project, companies may need to backfill positions. Team members may not have a job at the end of the project\n\n\nThe project timeline can be more aggressive since resources are fully focused\nProject managers are often responsible for managing the transition back to non-project work after delivery\n\n\nThere’s no conflict between project work and business-as-usual\nBecause resources are dedicated, companies must work on fewer projects at a time\n\n\nIt’s easier for the project manager to schedule work because they don’t need to account for non-project work\n\n\n\nCreating a team culture is easiest in this structure\n\n\n\n\nProject managers in this structure have more leadership responsibility. This means that they might need to manage things like HR issues and professional development.\nLet’s see how it goes for Steffie when she uses project organizational structure.\n\nSteffie starts by building her team. She chooses resources from several departments, and she’s careful not to impact any single team too much because those people will no longer be doing their original jobs. Since it’s important to connect with the consumer, she also brings in a product owner to help keep the team on track.\nNext, she builds out her project plan. She plans Sprints, assigns tasks, and the team gets to work.\n\nOrganize your projects and get more done\nUse Hubstaff Tasks to organize projects, manage tasks, and stay on top of deadlines.\n\n\nOutside of the project, Steffie’s marketing department is swamped. The marketing manager has to move responsibilities around to make up for the two people who moved to the project team. Five weeks into the project, the company is able to fill an open marketing position. Team workloads start to stabilize.\nSteffie’s team delivers their project a week early.\nNow that her project has been completed successfully, it’s up to Steffie to help her team transition back to their previous positions.\nThe team’s excellent performance gets noticed. That works out great for the designer who created the user interface. When he gets back to his department, he’s offered a promotion.\nThere’s one hiccup, though. The marketing director is under pressure to cut costs. Since he hired someone new, he doesn’t have the budget to bring back two members of his team. One of the marketers doesn’t have a job to come back to.\nIt turns out okay for that marketer, though. Because Steffie and her team did such a great job on the directory, the company asks her to lead an even bigger project. She offers the marketer a place on her new team.\n2. Functional organizational structure\nIn a functional organization structure, the project team works within an existing department. The functional manager (such as the IT manager or director of marketing) has the ultimate authority, and the project manager reports to the functional manager.\nThis structure gives project managers the least amount of authority.\nThe team works closely together every day, just as they did before. Each team member is expected to complete their regular job responsibilities in addition to project tasks.\nThis is a good structure for projects that don’t need a ton of input from multiple departments. It’s also attractive for smaller teams that already expect everyone to multitask. If your culture is built around the idea that everyone wears many hats, this might work great for you.\n\n\n\n\nPros\nCons\n\n\nThere’s less disruption because team members continue working in their regular jobs\nIt can be difficult getting help from other departments\n\n\nThe project may be more aligned with company priorities\nBusiness-as-usual work may slow progress on project work\n\n\nThe project team has deep expertise in their subject\nSince the functional manager holds the authority, routine work likely takes priority over project completion\n\n\nTeam members have already worked together and know each other\nProject results may be skewed towards a single point of view because idea-sharing across departments is limited\n\n\nResource allocation is clear — you know exactly what you have and don’t have\nProject managers may struggle to meet expectations without authority to make some decisions\n\n\nSuccess is very visible, so it opens paths for advancement\n\n\n\nHR issues are probably handled by the functional manager, not the PM\n\n\n\n\n\nLet’s check in with Steffie to see how she handles this organizational structure.\n\nSince this is a marketing initiative, it is handled by the marketing department. Steffie reports to the Senior Manager, and after Steffie creates her project plan, she assigns the work.\nPreliminary work goes better than expected. Three weeks into the project, she’s ahead of schedule. Challenges arise when it’s time for software development, though.\nSteffie approaches the manager of the development team to ask for a resource. It takes several requests before she gets a response. The manager agrees to assign a developer to the project, but doesn’t want the extra work to distract from their main responsibilities.\nDevelopment proceeds slower than Steffie estimated. This puts the project behind schedule.\nApproaching the development team manager doesn’t speed things along. The development team has their own priorities and deadlines. If they slip on their deliverables, there will be negative consequences. There’s no repercussions for the dev team if the marketing team’s project is late, though.\nThe marketing manager steps in to ask the development team to five the project higher priority. The project starts to move faster, and Steffie is able to adjust other tasks to finish on time.\nThe project is a success!\nThe Senior Manager of Marketing gets credit for a job well done.\n3. Matrix organizational structure\nIn the other two structures, authority is clearly placed with either the project manager or the functional manager.\nMatrix organizational structure is almost like a blend between project and functional structures. Authority is shared. The project manager is responsible for project-related decisions, and the functional manager is responsible for business-as-usual decisions. Team members report to both.\nYou see this most often when a company wants to pull resources from multiple departments to complete a project, but those people still need to continue working on their regular job responsibilities. It can even be used to share resources between multiple projects at the same time.\n\n\n\n\nPros\nCons\n\n\nThis is the most flexible structure\nThere may be some competition for resources between project needs and business-as-usual needs\n\n\nResources can be allocated as needed and team size can be scaled up or down at any time\nTeam members might be less productive as they try to split their time between multiple demands\n\n\nThere’s less disruption to business as usual\nThis structure may create a feeling of competition between managers\n\n\nTeam members get a chance to showcase their skills and earn recognition\nTeam members may feel that they are stretched too thin to the point where morale is affected\n\n\nIdeas can be easily shared across departments\nCommunication issues can arise when multiple PMs and functional managers have different priorities\n\n\nIt’s possible to work on many projects at the same time despite limited resources\nIt’s harder to build a team culture when people share time between many projects\n\n\nMultiple departments are invested in the success of the project\n\n\n\n\nLet’s check in with Steffie and see how she handles this organizational structure.\n\nSteffie creates a project plan and expects to complete this project in 12 weeks.\nDuring the first sprint, she only needs a few people from marketing, and all tasks are completed on time.\nThe next few sprints require a lot more help. She brings in developers, designers, and some public relations specialists from marketing. As these people join the project team, the team members who kicked off the project focus more on their regular work.\n\nKeep projects moving forward\nMake sure projects stay on track with Hubstaff Tasks.\n\n\nAnother project starts, and some of Steffie’s team members dedicate time to both. They’re a little stressed out, but Steffie works closely with the other project manager to make sure they can share resources efficiently. The workload is a little too heavy for their shared developer, so Steffie decides to recruit another developer and split up some tasks.\nIn fact, sharing team members turns out to be an advantage. Some of the research that Steffie’s team completed in the first sprint is useful for the new project. Using the same resources saves time because the work has already been done once.\nFor the final sprints, the original marketing team members jump back in while the developers and designers move to a different project. The project is finished on time.\nChoosing the right type\nWhich project management organizational structure is best?\n\n\nAll three structures are useful in different situations. If your team is too small to dedicate resources, you should look at matrix and functional project management organizational structures. If you’re on a very tight timeline and budget isn’t an issue, then project organizational structure is a good choice.\n\nSome project managers also consider whether or not they have the authority to get the job done. Experienced project managers may shy away from functional organizational structure because they have less control and influence over their team.\nAt the same time, some businesses are concerned that giving the project manager total authority is a risk. A project manager might be more concerned about their own vision for the project than they are with actual business needs. This leads some companies to shy away from project organizational structure.\nNo matter which structure you choose, make sure you have a solid communication strategy. It’s too easy to lose conversations that get buried in email. Have you ever spent way too long clicking through Slack conversations trying to find a past discussion? That’s not an effective way to lead a project team.\nHubstaff Tasks makes project communication easier and more efficient. Your team can comment directly on the task so that the most important information is always easy to find.\nWith the right tools, you can succeed using any of these organizational structures. Which ones have you used? Tell us in the comments.