MEMBERS: GROUP 5 - BSMA 3C

Alera, Aravela Grace

Alipio, Jean

Vasquez, Mavil

CHAPTER 5: Project Management Organizational Structure

Objectives:
● Differentiate a program manager from a project manager;
● Identify a project organizational structure;
● Compare and contrast the different forms of organizational structures used in
organizing projects;
● Select the best organizational structure in organizing projects based from their
advantages and disadvantages;
● Categorize the different forms of matrix organizational structure based on the
authority of the functional and project manager,
● Design an optimal organizational structure for a project.

Table 1: Program Manager vs Project Manager

Factors of Comparison Project Manager Program Manager

Focuses Content: Context:

Scope, schedules, People, politics and
resources negotiating

Manages Projects Portfolios

Performs More technical tasks More strategic tasks

Handles Risk management Change management

(program and
environmental changes)

Deals Risk requirements Business strategies and

objectives

Responsible Ensuring projects get Maximizing ROI and

completed on time, value delivery
within budget.
Source: http://www.1desk.com/
The Project Organizational Structure

A project organization is a structure that facilitates the coordination and

implementation of project activities. Its major basis is to form an environment that
encourages good relations between the team members with a least amount of
troubles, overlaps and conflict. The form of organizational structure that will be
employed for the project is one of the vital decisions in project management.

It is necessary to project success having an appropriately devised project

organization chart. Where each person is placed in the project structure is shown
in an organization chart. Drawn in pyramid format an organization chart illustrates
that individuals located nearer to the peak of the pyramid have greater authority
and responsibility compared to members positioned to the bottom. The locations
of the individuals on the organization chart specify the working relationships. In
addition, the lines linking the boxes designate official supervision and lines of
communication involving the individuals.

FORMS OF PROJECT ORGANIZATIONAL STRUCTURE

Organizing Projects within a Functional Organization

The functional structure is the oldest yet the most effective organizational
technique. This strategy is best suited for routine functions. However, it doesn't
work effectively when used in complex projects.

Figure 1: Organizational chart of a functional Organization

Table 2: Advantages and Disadvantages of Project in a Functional
Organization

Advantages Disadvantages

1. There is a maximum flexibility in the 1. The client is not the focus of activity
use of staff. and concern.

2. Individual experts can be utilized by 2. The functional division tends to be

many different projects. oriented toward the activities particular
to its function.

3. Specialists in the division can be 3. In functionally organized projects, no

grouped to share knowledge and individual is given full responsibility for
experience. the project.

4. The functional division also serves 4. The lack of coordinated effort tends
as a base of technological continuity to make response to client needs slow
when individuals choose to leave the and difficult.
project and even the parent firm.

5. The functional division contains the 5. There is tendency to suboptimize the

normal path of advancement for project
individuals whose expertise is in the
functional area

6. The motivation of people assigned to

the project tends to be weak.

7. This organizational arrangement

does not facilitate a holistic approach to
the project.

Organizing Projects within a Projectized Organization

Projectized organization is a structure that is particularly created for executing

projects. It is really principally tailored to meet the demands of complex projects by
isolating exclusive functions and maintaining a strong focus on completing the
project. When the project is completed, this structure disbands. This structure is
powerful in maintaining dedicated resources all through the life of the project.
Figure 2: Organizational Chart of a Projected Organization

Table 3: Advantages and Disadvantages of Projects in a Projectized

Organization

Advantages Disadvantages

1. The project manager has full line 1. When the organizations takes on
authority over the project. several projects, it is common for each
one to be fully staffed.

2. All members of the project work force 2. The need to access to technological
are directly responsible to the project knowledge and skills results in an
manager. attempt by the project manager to
stockpile equipment and technical
assistance in order to be certain that it
will be available when needed.

3. When the project is removed from 3. Though individuals engaged in

the functional division, the lines of projects develop considerable depth in
communication are shortened. technology of the project, they tend to
fall behind in other areas of their
technical expertise.
 4. When there are several successive
projects of a similar kind the Projectized
organization can maintain a more or
less permanent pool of experts who
develop considerable skills in specific
technologies.
4. Projectized project teams seem to
foster inconsistency in the way in which
policies and procedures are carried
out.

5. The project team that has a strong 5. Team members form strong
and separate identity of its own tends to attachments to the project and to each
develop a high level of commitment other known as projectitis.
from its members.

6. Because authority is centralized, the 6. The worry on "life after project ends"
ability to make swift decisions is greatly of members.
enhanced.

7. Unity of command exists.

8. Projectized organizations are

structurally simple and flexible which
makes them relatively easy to
understand and to implement.

9. The organizational structure tends to

support a holistic approach to the
project.

Organizing Projects within a Matrix Organization

Matrix organization is actually a project management structure that combines the

very best components of functional organization and project organization
structures besides the recognition of intrinsic defects inside these two structures.
When properly coordinated this model functions very well in multiple projects. The
staffing, training, job assignment and evaluation of the project's personnel are
supervised by the functional managers. In order to best achieved objectives of
individualized projects via the optimal use of resources the functional specialists
are assigned one or more projects
Figure 3: Organizational Chart of a Matrix Organization

Table 4: Advantages and Disadvantages of Projects in a Matrix Organization

Advantages Disadvantages

1. The project is the point of 1. Oftentimes there is apparent tension

importance. between functional manager and
project manager which has the
tendency to become personal.

2. Because the project organization is 2. There is conflict and competition in

placed on top on the functional the sharing os scarce resources.
divisions, getting labor and talent from
them for the time being, the project can
make use of the whole pool of
technology in all functional division

3. There is less worry about what 3. Matrix management violates the

happens when the project is finished unity of command principle with two
than a projectized organization bosses- functional head and project
because team members are still close manager.
to their functional organization.

4. Response to client need is rapid and 4. Decision making can get delayed
flexible. because agreements with multiple
functional groups have to be
considered.
 5. With matrix management, the project
has access to representatives from the
administration of the parent firm.

6. With simultaneous projects, matrix

organization permits a better company
wide balance of resources to
accomplish the differing time, cost and
scope of each project.

7. The matrix organization covers a

wide range of what are between the
functional and projectized
organizational structures.

There are several forms of matrix organization based on the authority of the
functional and project manager:

1. Functional, lightweight or weak matrix - The balance of authority in this form

supports the functional manager.

2. Middleweight or balanced matrix - This form resembles the traditional matrix

arrangement in which both parties work closely together and jointly approve
technical and operational decisions.

3. Project, heavyweight or strong matrix - The balance of authority in this form is

strongly inclined on the side of the project manager.

Table 5: Forms of Matrix Organization

Form of Matrix Authority of the Authority of the Project

Functional Manager Manager (PM)
(FM)

Weak Matrix FM calls most of the A PM act as a staff

shots and decides who assistant who draws. the
does what and when the schedules and
The balance of authority work is completed. checklists, collect
in this form supports the information on status of
 functional manager work and facilitates
project completion.

PM has indirect authority

to expedite and monitor
the project.

Balanced Matrix FM is concern for The PM establishes the

assigning personnel and overall plan for
his form resembles the executing their segment completing the project,
traditional matrix of the project according integrates the
arrangement in which to the standards set by contribution of the
both parties work closely the project manager. different disciplines, sets
together and jointly schedules, and monitors
approve technical and progress.
operational decisions.

Strong Matrix The FM is consulted on The PM controls most

need basis especially aspects of the project
The balance of authority with regard to personnel. including scope trade-
in this form is strongly offs and assignments of
inclined on the side of the functional personnel.
project manager.

Organizing Projects within a Virtual Organization

The use of the Internet and other modern communication technologies paved the
way to the rise of virtual projects. A virtual project has project team that may work
in different time zones, in geographically dispersed places, in different
organizations, and in different cultures. In this form of organization, the project
team is often formed in a matrix type of structure. Here are some of the guidelines
for the success of an organization in using virtual form of organization:

1. Challenging and interesting projects are appropriate for virtual teams, but make
sure that the project has meaning for both the company and the team.

2. If possible, request volunteers to be part of the team because they are more
enthusiastic and dedicated to the success of the project.
3. Each team must be composed of six to seven members only with outside
contacts. Make sure a few members of the team are familiar with each other.

4. Form an online resource for team members to learn about each other on how
they choose to work collaborate, brainstorm and draw inspiration.

5. Promote regular communication among team members.

6. If possible, divide the project work into geographically independent components

to avoid hindering one location for delays of other places.

There are four types of electronic communication being used help in beating the
lack of formal and informal personal contact between members of the project team.
These manners of electronic communication have been extensively even before
by managers of virtual projects.

1. The Internet- provides a faster and cheap mode worldwide. This is a necessary
way of contacting all participants in virtual project especially with virtual project
manager who depends on emails to exchange project data with his dispersed
team. Email is an effective, easier and faster tool for exchanging information
updates of project activities.

2. The pager- Each member has a paging system with individual pager number.
A particular team member can be "paged" whenever an issue surface that requires
the person's attention. This mode of communication is good for quick response to
problems and issues. A culture though must be developed by the team to respond
quickly every time the pager rings.

3. Teleconferencing- This mode of electronic communication allows all essential

persons to share conversation and resent their view in real time. The absence of
visual though needs the one speaking to make proper identification when
participating in the discussion via this telephony technology.

4. Videoconferencing - This manner of communication saves time and money for

the geographically dispersed team for periodic face-to-face meeting.

Note: When important issues could be discussed and resolved with email,
teleconferencing and voice contact, the use of teleconferencing must be
appropriately utilized.
Selecting the Optimal Organizational Structure

The best project organizational structure balances the needs of the project with the
needs of the organization. Selecting the correct project structure type is a key
success factor that can create better business results and achieve the competitive
advantage and value that the organization visualized. The choice of the
organizational form in managing a project rarely lies on the project manager. It is
the senior management who is responsible for this job. The preference is
determined by the situation and to some extent instinctive.

There is no step-by-step procedure for shaping the kind of structure required and
how it can be constructed. Some projects need firm controls while others
necessitate innovative solutions. Managing a standard construction project has a
different type of organizational structure compared to developing a product design.
The best thing to do is to think of the nature of the potential project, the features of
the different organizational alternatives and their advantages and disadvantages,
the cultural preferences of the parent organization and create the greatest
compromise.

Here are some basic considerations that may influence the selection of the
organizational structure for project management:

1. Project size - a project could be small, medium and large.

2. Project length - number of calendar periods it takes from the time the execution
of element starts to the moment it is completed.

3. Experience with project management organization - familiarity with other

organizations' way of handling projects.

4. Philosophy and visibility of upper-level management the beliefs and the

presence of support of top management.

5. Project location - the geographic location using the street address, nearest
major city, or the latitude and longitude.

6. Available resources - the accessibility of needed resources.

7. Unique aspects of the project - the best control of human resources classified
as labor-intensive and capital intensive; labor intensive projects need a formal
structure while capital intensive may use informal organizational form.