Within organizational systems, how do project based organizations differ from non project based (functional or operations focused) organizations?

Introduction / Context:
Understanding organizational structures is essential for project managers because structure strongly influences authority, communication and resource availability. Project based and non project based (typically functional or operations focused) organizations behave very differently. The exam often checks whether you can recognize these structures and predict how they affect the project manager's role. This question focuses on distinguishing project based organizations from more traditional non project based structures.

Given Data / Assumptions:

• Organizations can be structured functionally, projectized or as some form of matrix.
• Project based organizations align most of their work and revenue streams around projects.
• Non project based organizations place more emphasis on ongoing operations and functional departments.
• You must select the option that accurately describes the key difference between these two organizational types.

Concept / Approach:
In a project based (or projectized) organization, the majority of work is executed as projects, and the company structure centers on project teams. Project managers have significant authority, and team members often report directly to them rather than to functional managers. Revenue is closely tied to delivering projects for clients or internal sponsors. In non project based organizations, such as purely functional structures, most work is ongoing operations handled by departments like finance, operations or marketing. Projects still exist but are not the primary organizing principle or revenue source. By comparing each option with this conceptual model, we can identify the most accurate description.

Step-by-Step Solution:
Step 1: Review option A. It describes a project based organization as one where most revenue and work are derived from projects and staff are organized around project teams rather than functional departments. This matches standard definitions.Step 2: Examine option B. It incorrectly claims that non project based organizations perform all work as projects and have no functional departments, which actually sounds more like a pure projectized structure.Step 3: Look at option C. It states that project based organizations discourage projects and focus on operations, which is the opposite of what project based means.Step 4: Consider option D. It claims that in non project based organizations, project managers always have more authority than functional managers. In reality, functional organizations typically give more authority to functional managers.Step 5: Conclude that only option A presents a correct and precise description of project based organizations compared with non project based organizations.

Verification / Alternative check:
Think of a consulting firm that delivers custom solutions for clients. Its revenue is primarily project based, and staff members move from one project team to another. This is a classic project based organization. By contrast, a manufacturing plant may run mostly operational processes with occasional improvement projects. That plant is primarily non project based. These real world examples confirm that option A correctly captures the distinction.

Why Other Options Are Wrong:
Option B flips the characteristics and mislabels non project based organizations. Option C misinterprets the term project based entirely. Option D incorrectly describes the authority structure in non project based organizations, where functional managers usually dominate. None of these align with PMBOK style descriptions of organizational types.

Common Pitfalls:
Students sometimes confuse projectized with matrix structures or assume that any company that occasionally runs projects is project based. Another pitfall is to believe that authority always lies with project managers in every organization, which is not true in functional environments. For exam success, you should be able to look at who controls resources and how work is organized, and then correctly label the structure as functional, matrix or projectized.

Final Answer:
The correct description is that in a project based organization most of the company's revenue and work are derived from projects and staff are formally organized around project teams rather than functional departments.