Types Of Organisations as defined by PMI®

If you’re taking project management courses to study for your PMP certification, you’ll need to learn many new things, and one of them is organisation types as defined by the PMI. Organisation types are a framework that determines the hierarchy of people, function, and workflow—along with the reporting system in an organisation.

Every organisation should have a defined organisation structure in order to work efficiently and achieve its business goals. Some say that without a defined organisation type and structure that helps support its objectives, that organisation will not succeed. As a project manager, this will help you identify the stakeholders and other team.

Here is the list of different types of organisations that will help you understand which type of organisation you’re working with:

Type of Organisation

1. Functional Organisation: Project Management training for the PMP exam covers the functional organisation, the most commonly used organisation type. In a functional organisation structure, the organisation is grouped into departments where people with similar skills are kept together in forms of groups; e.g., sales department, marketing department, finance department, etc. This helps organisations enhance the efficiencies of each functional group.

2. Matrix Organisation: The matrix organisation structure is a combination of two or more types of organisational structures, such as the projectized organisation structure and the functional organisation structure. This combination can help organisations improve efficiency, readiness, and market adaptation. This type of structure is most suitable for organisations operating in a dynamic environment; they often can respond faster to market or customer demand while decreasing the lead time to produce a new product

3. Strong Matrix
   In a strong matrix structure, the project manager enjoys more power than the functional manager. For example, the project manager has a say in the allocation of resources.

4. Balanced Matrix
   In a balanced matrix, both have equal power. Resources working on a project can face communication difficulties due to the lack of clarity on whom to report.

5. Projectized Organisation
   A projectized organisation is the ideal organisation type for a project manager. Project managers are the real bosses here, with the freedom to apply your expertise and have a say in the proceedings. However, once a project is delivered, project managers become redundant. There is no job security in this type of organisation.

Conclusion

It’s always helpful for a project manager to know in advance what type of organisation you are working in to better understand your level of authority. Skilled project managers typically prefer a projectized organisation to others.

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PMP is a registered mark of the Project Management Institute, Inc