Your post is entitled "CM in a Project," so I assume when you say "near the top" you are probably referring to just under the PM. On the other hand, you could be referring to Production in the "System Administration" sense.
If you are speaking in terms of a project where a product is being created, and if you are referring to CM in the fullest sense, then let me offer some points.
1. CM is a management function that focuses on the product (beginning to end of the product life cycle) - In a small organization, or project, the functions of planning, identification, etc. might very well be done by the PM. Much the same as project planning, project finance, project training and others, CM is a sort of subset of overall management. For complex organizational structures, with a complex product or many products, the workload dictates a dedicated CM specialist for the same reasons that some very complex projects require a financial specialist to do the budgetary work.
2. Placing the CM role under Production can compromise the integrity of the product because the product/production manager is in a position to dictate "deviations" form the CM processes. In other words, the production manager can bring pressure to bear to "force" the CM specialist to fudge in order to meet a schedule or budgetary constraint. For example, suppose
(a) the team has a deadline coming,
(b)there is a component that has been "corrected" but not tested (not enough time before the deadline
(c) you are asked by the PM to force the check-in and include the updated component for delivery.
If you are talking about "System Admin" (a la ITIL), then number 2, above, might still apply.
Again, in either case, there is the risk that the PM will authorize something to be modified "on-the-fly" and force you to accommodate it.
There is always the unspoken threat "If I don't do this, I probably will get a bad evaluation (i.e., no pay raise). Or worse, "..., I probably will be looking for another job."
QA has a similar dilemma, which is why the QA line of authority should be outside the project structure..
