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What reporting structure should Product Owners follow?

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Release level Product Owners should report at an equivalent level to their development management peers. If the development manager(s) for people on the team(s) the PO works with the report at the Director or VP level, then the PO should report at the same level. Regardless of reporting structure, development management must have the authority to address any impediments. The preferred approach is for people acting as Release Product Owners to report into the Product Development organizational structure.
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