This issue has been slightly touched on in the above link but I am hoping the collective expertise of this community could expand it. I have been reading PMBoK 5e. From what I gather the only functional difference between Progam management and Portfolio Management is that programs should be grouped by a common outcome or capability whereas portfolios can contain projects that are drastically dissimilar in goals or requirements. Also Projects within a portfolio will necessarily share a strategic objective.
Does this reflect the real business world? Is an organization with projects within programs within one of many portfolios a common structure?
I am wondering if this is an example of jargon for the sake of jargon or if there are enough real world applications of this organizational structure that it is useful to understand it (beyond for testing purposes).
In my experience a Programme is a collection of projects where each project delivers part of the overall programme outcomes (i.e the programme is like a super-project but with several substantial sub-projects), whereas a Portfolio is merely a collection of projects managed together (like a portfolio of stocks you may have invested in). I have also seen portfolios containing project aligned to different strategic goals.
The confusion here can sometimes come from people using the term "program" when we would technically mean "project" in the organizational framework (afterall a "program" could be your project!). You are correct in that strategy is the common linkage from project > program > portfolio. It's often thought of as a pyramid with projects at the bottom, but the reality does look a bit more multidirectional than just one-way vertical. I like the enhanced visual that Stanford employs (copyright to Stanford Advanced Project Management) for the image. I think the more complex depiction of the relationships and intersections of elements more closely depicts the business reality of the differences between program and portfolio. Technically speaking, you may not have a "defined" portfolio from your organization that identifies it as such but it certainly sits within a strategic framework and mission of some sort. Formal clarification can be important to consider investment in project maturity and sustainability of efforts.
IMHO, the key difference is the purpose: Portfolio defines common constraints (how many projects the organization can run concurrently), and Program defines common change vectors for a group of projects (what the organization needs to do for a particular goal).