Introduction

The Project Management Institute defines the types of organisations in “The Standard for Professional Practice of Project Management” to assist project managers when scaling their projects. 

This blog article will review the different types of organisations defined by PMI for the PMP certification.

So, this article is for you if you are thinking of taking the PMP certification and want to work on an organisation type other than just functional. 

There are many types of organisations, and each one is unique in defining the structure of work and other factors. PMI’s Project Management Certification Exam (PMP) includes a section on Organisation Types.

This exam has evolved, with new models like the balanced or composite Organisation being developed that consider cultural differences, geographical placements, and more.

This article will explore how PMI defines these different types of organisations. So, let’s get started!

What Is PMP Certification?

The PMP certification is a designation presented by the Project Management Institute (PMI). An internationally recognized credential indicates that an individual has the knowledge and skills required to manage projects, programs, and portfolios. 

It helps professionals working with project managers to understand their knowledge, skills, and attitude towards delivering projects. In terms of eligibility, you need to have a minimum of 5 years of experience leading and directing projects and 7500 hours leading/directing projects to be eligible for PMP certification through PMI. This certification is valid for 3 years, after which one needs to retake the test to continue using the designation. 

In It, you learn how to plan and manage the projects, track them and keep their progress updated, utilise resources, and other aspects related to managing projects. This certification equips you with the core knowledge and skills needed to deliver successful project outcomes and better manage your projects, regardless of where they are in their life cycle.

Types Of Organisation

types-of-organization-for-pmp
types-of-organization-for-pmp

The Project Management Professional (PMP)® credential is the leading project management certification globally, recognized by more than 110 countries worldwide. 

In project management, an organisation is a group of people, departments, and organisations that work together to achieve the project goal. 

The project manager defines the organisations in the project and their roles and responsibilities. The project manager can determine one or many organisations depending on the nature of the project.

The Different Types of Organisations in Project Management defined for the PMP Certifications are :-

1. Functional Organisation

One of the key concepts in the PMBOK Guide is a functional organisation. Functional organisations are ideal for situations where each team member has only one responsibility and the tasks being performed are relatively independent of each other. An active organisation is one where the manager controls the resources and can decide how they will be used. It doesn’t make any difference on criteria to determine what project will be chosen for execution or by whom. 

The organisational structure of a functional manager or workshop leader, typically called available foreman or supervisor, is determined by the nature and scope of the work performed by their team members. It is often assumed that a supervisor has no authority over workers from other departments because they direct and coordinate their activities. However, in practice, a functional supervisor may have considerable flexibility in organising and leading his team’s efforts.

2. Projectized Organisation

The Projectized Organisation was an approach by which the Project Management Office (PMO) acts as a specialised support organisation for project teams. The PMO provides all services relating to projects and project management in general, except for direct project team support. This led to better communication between projects and cross-project collaboration.

This Organisation is one in which the Managerial Hierarchy and Administrative hierarchy are flattened, with all managerial authority vested in the Project Leaders. This eliminates the need for a hierarchical organisation by granting all project leaders the same authority as their peers.

It is a balanced combination of top-down and bottom-up control mechanisms and methods. It is both centralised and decentralised, providing flexibility at all managerial levels to respond quickly to changes in circumstances while maintaining consistency with its strategic goals. 

3. Composite Organisation

A composite organisation is an aggregation of teams or individuals who need to work together in a project to achieve the overall goals. Most of the time, it’s just one team, but sometimes you need to aggregate other groups. Sometimes you are a “sub-team” of a larger team and have to coordinate with your parent team on specific aspects of the project, either formally or informally.

The primary purpose behind the composite structure is to get all the resources from parent organisations concurrently participating in delivering a particular project. It helps achieve integration between single components/resources belonging to different departments/organisations. 

The composite structure is prevalent in large, complex organisations with numerous business or operating divisions that have an inherent need to be separate entities. This allows each organisation to function independently from the others but still work as a team when required. While there can be benefits in linking the sub-organization together for common goals, cost savings and efficiencies are achieved by keeping each group separately for specific tasks. 

4. Matrix Organisation

The Matrix organisation is a type of management organisation based on the concept of balance between centralised control and decentralised authority. This organisational structure places project managers with their respective teams at the centre of the Organisation.

With the matrix organisational structure, employees are assigned functional responsibilities and specific business units or projects. You can also say that it is a structure based on product lines and market segments. This allows businesses to organise resources, such as people, departments, and equipment, to respond to changing customer needs or changes in technology.

Matrix structures are a type of organisational structure in which the project manager controls both the technical and people aspects of a project. There are three types of Matrix organisations: 

1) Core-Matrix :-

The most common version. The project manager and functional manager are in charge of the project, with shared leadership.

2) Sub-Matrix:

Functional managers have more control over their piece of work than together they do as a whole. 

3) Project-Sub Matrix:

The Project Manager has sole authority to manage the entire project, but within that oversight must still answer to the functional bosses for resources or issues related to that part of the company.

Conclusion

PMI’s definition of an organisation is a system that enables people’s coordination, expertise, activities, and other resources to achieve strategic, tactical, and operational goals.

We’ve looked at all the different organisations that PMI has defined for PMP certification.

Project management professionals need to be aware of different types of organisations. PMP aspirants need to know about the various types of organisations. 

In this article, you have understood the different types of organisations and how PMI defines these organisations for PMP Certification.

The proper organisation type for you depends on your current career goals, company size, and whether or not you’re a project manager. It would help if you took the time to research these types and find which one is best for you. 

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