Organizational structure refers to the way a company is arranged, including how job tasks are divided and coordinated, and how members of the organization relate to one another. As a project manager, understanding the different types of organizational structures can help you determine where you fit in, who you should communicate with, and how frequently to communicate with them. In this article, we will discuss two of the most common organizational structures and the role of a project manager within them.

This knowledge is based on the Project Management Course available on Coursera and Google Garage. By the end of this article, you will have a better understanding of Classic and Matrix organizational structures and how they influence project management.

Classic Organizational Structure

The Classic organizational structure is a top-down hierarchy system where a Chief Executive Officer (CEO) has direct authority over several department managers. The department manager has direct authority over several other sections of employees. In a Classic structure, authority comes from the top and filters to the bottom. Frequent reporting of project status updates may be required to keep higher leaders informed.

Classic organizations are also referred to as functional organizations because the organization is divided into departments based on function. Each department is led by a functional manager, and employees are grouped according to the functions of their role. For example, the main function of an airline company like Friendly Skies Airlines is to fly airplanes. There are typically departments logically arranged to fulfill other important company functions, such as Marketing, Human Resources, and Strategy. Employees usually have a specialty within the organization and may not work within other areas during normal everyday operations.

Managing a Project in a Classic Organization

As a project manager in a Classic organizational structure, you will communicate regularly with your manager and your peers who work on the same types of projects as you. It is essential to understand the expectations of the people in charge of each function and how their work interrelates. You will need to be aware of how any changes in one function will affect the others and plan accordingly.

Matrix Organizational Structure

In the Matrix organizational structure, you still have people above you, but you also have people in adjacent departments who expect to hear updates on your work progress. These people may not be your direct bosses, but you are responsible for communicating with them since they may inform changes to your work. This structure has direct higher-ups to report to and stakeholders from other departments or programs. Matrix structures are common in companies where project teams sit across different functions.

Managing a Project in a Matrix Organization

As a project manager in a Matrix organizational structure, you will need to manage communication with multiple stakeholders, not just those in your direct chain of command. You will have to keep stakeholders updated on progress, solicit feedback, and communicate changes effectively. There may be competing priorities or different agendas, so you will need to manage expectations carefully. You may need to prioritize the work that has the most significant impact on the organization and adjust timelines to accommodate changes in priorities.

Knowing which kind of organizational structure you're working in plays a significant role in how you prepare for and carry out your project. During an interview, you can ask about the type of organizational structure the company uses and where your role will fit in. This will help you and the interviewer communicate clearly about the people you will engage with daily and the expectations for the role.

In conclusion, understanding the different types of organizational structures is crucial for project managers to determine their role in the company, communicate with different stakeholders, and effectively manage projects to meet organizational goals.