Project-Based Organization (PBO) vs Projectized Organization

Discussion in 'PMP' started by _25833, May 19, 2018.

  1. _25833

    _25833 Member

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    Trying to understand the difference between a Project-Based Organization (PBO) and a Projectized Organization.

    In PMBOK Ed. 5 (which I expect would be the same in Ed. 6), the two terms are defined as follows:

    Project-Based Organization (PBO): A variety of organizational forms that involve the creation of temporary systems for the performance of projects. PBOs conduct the majority of their activities as projects and/or provide project over functional approaches. (p. 553 in Ed. 5) The book also notes on p. 14 that PBOs may diminish the hierarchy and bureaucracy inside the organizations as the success of the work is measured by the final result rather than by position or politics.

    Projectized Organization: any organizational structure in which the project manager has full authority to assign priorities, apply resources, and direct the work of persons assigned to the project. (p. 556 in Ed. 5)

    It seems to me that the hierarchy is what primarily differentiates the two organizational terms: PBOs diminish the hierarchy while projectized organizations have a clear hierarchy with a PM in charge. Am I on the right track in thinking this?

    Are there other key differences between the two terms?

    Also, would the following be examples of PBOs:

    - an enterprise cross-functional committee created to work on the professional development event project for the company where committee members come from different roles/levels of the organization (such as both staff and management), and the committee chair, while leading the overall effort, isn't really directing the work of each committee member

    - a condo board that works on a capital upgrade project for the building. The board members are building residents who volunteer their time and provide overall leadership for the project, but aren't directing the work on a day-to-day basis. Even though there is a board chair, this person doesn't really direct the work of other board members

    - a professional network or group to which multiple organizations belong that was formed for purposes, such as advocacy, as well as purchasing services collectively (such as educational technology licences that is purchased collectively by a group of educational institutions).
     
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  2. tim jerome

    tim jerome Well-Known Member
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    So - Project-Based Organizations (PBOs) have an entry in the PMBOK index, but are not discussed in context. In fact, you'll be hard-pressed to find the term 'projectized' either. If you go to p. 47 in the 6th Edition, you'll find project-oriented as a reference. This means that the concept of the organization where the PM is in high authority is changing.

    PBOs still are referenced in the Organizational Project Management Maturity Model (OPM3), and are what you said - they are organizations, highly 'projectized'. THe organization has modified its structure to do its work under projects. This could be due to many reasons, but this occurred a lot where organizations needed to demonstrate their value over time (benefits to costs). In a projectized model, this is pretty easy. Your examples are a few, but there will always be a business reason to choose to manage projects over operations. It'll either be because what I described, or projects are how the organization brings in revenue - sales, engagements, and the like.

    In the current PMBOK, the Project-oriented structure is similar to a PBO - the focus is the project. This terminology allows one to talk about PMs having high authority, not only in consulting, but wherever projects are the primary consideration for the work of the organization.

    One can assume that the exam terminology will change as well; I haven't heard feeback yet whether the older terms are still used, or the new terms are now the order of the day.
     
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  3. _25833

    _25833 Member

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    Thank you for the answer Tim! I should have looked at the 6th Edition on this point sooner because, as you pointed out, PBOs are not discussed in the content in the latest edition. I would presume - and hope - that the terminology used in the latest, 6th edition would be used in the exam. I'm also glad they've done away with some of this terminology. I felt that differentiating between PBOs and Projectized organizations was splitting hairs; the two just seemed so similar. Thanks again. - Olga R
     
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  4. tim jerome

    tim jerome Well-Known Member
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    No problem, Olga. This is something I missed in my initial review. Your question helped me as well -
     
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