The organizational structure, how departments, business units, resources, responsibilities, and job assignments are arranged, is an important factor in the project planning process and may significantly impact project communication, the authority of the project manager, and the process of obtaining project human resources.

Organizational structures vary by company and create unique challenges for the project manager. The effectiveness of the project manager and the ability to coordinate activities cross-organizationally is directly associated with how an organization is structured. Type of functional expertise, management hierarchy, authority levels, and conflicts associated with differing priorities and cultures within an organization require special handling and, in many cases, strong interpersonal and negotiating skills.

Glossary of terms

Key terms and definitions to review and remember

Accountability To be answerable for the satisfactory completion of a specific assignment.

Authority The power granted to individuals (possibly by their positions) that enables them to make final decisions.

Customer/User The person or organization that will use the final product or service of the project.

Organizations Groups of people and their associated resources who must coordinate their activities in order to meet specific objectives.

Organizational Structures There are three main types of organizational structure.

  • Functional Also known as chimney, smoke stack, ...

Get Project Management Work Book and Pmp®/Capm® Exam Study Guide, Tenth Edition now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.