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Instructional Module in
Program and Project Development (PPD 302)
Preliminaries
I. Lesson Number 5
II. Lesson Title Project Management Organizational Structure
III. Brief Introduction of the This lesson discusses the various project management organizational
Lesson structures, including functional, projectized, matrix, and virtual organizations,
highlighting their advantages and disadvantages. It emphasizes the
importance of selecting the optimal structure based on project needs, size, and
management philosophy. The chapter also outlines the roles of project and
program managers, differentiating their focuses and responsibilities.
IV. Lesson Objectives • Differentiate a program manager from a project manager;
• Identify a project organizational structure;
• Compare and contrast the different forms of organizational structures used
inorganizing 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
Lesson Proper
Discussion
Table 1. Program Manager vs. Project Manager
FACTORS OF
PROJECT MANAGER PROGRAM MANAGER
COMPARISON
Focus • Content-focused • Context-focused
Scope Of Work • Scope, schedules, and resources • People, politics, and negotiation
Manages • Individual projects • Portfolios or programs of related projects
Type Of Tasks • More technical and operational tasks • More strategic and high-level tasks
• Change management (program and
Handles • Risk management
environmental changes)
• Business strategies and organizational
Deals With • Project risks and requirements
objectives
• Ensuring projects are completed on time • Maximizing return on investment (ROI) and
Primary Responsibility
and within budget value delivery
Source:
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 number 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
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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
• There is maximum flexibility in the use of staff. • The client is not the main focus of activity and concern.
• Individual experts can be utilized by many different • Functional divisions tend to be oriented only toward
projects. activities specific to their function.
• Specialists in the division can be grouped to share • No single individual is given full responsibility for the
knowledge and experience. project.
• The functional division serves as a base of • Lack of coordinated effort makes responses to client
technological continuity when individuals leave the needs slow and difficult.
project or the parent firm.
• The functional division provides a normal path of • There is a tendency to sub-optimize the project.
advancement for individuals whose expertise is in the • Motivation of people assigned to the project tends to be
functional area. weak.
• 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
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Table 3: Advantages and Disadvantages of Projects in a Projectized Organization
Advantages Disadvantages
1. The project manager has full line authority over the 1. When the organizations take on several projects, it is
project. common for each one to be fully staffed.
2. All members of the project workforce are directly 2. The need to access to technological knowledge and skills
responsible to the project manager. results in an 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 the functional 3. Though individuals engaged in projects develop considerable
division, the lines of communication are shortened. depth in 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 4. Projectized project teams seem to foster inconsistency in the
similar kind the Projectized organization can maintain way in which policies and procedures are carried out.
a more or less permanent pool of experts who develop
considerable skills in specific technologies.
5. A project team with a strong and separate identity 5. Team members form strong attachments to the project and to
tends to develop a high level of commitment among each other known as projectitis.
its members.
6. Because authority is centralized, the ability to make 6. The worry on "life after project ends “of members.
swift decisions is greatly enhanced.
7. Unity of command exists.
8. Projectized organizations are structurally simple and
flexible, making them 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
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Table 4: Advantages and Disadvantages of Projects in a Matrix Organization
Advantages Disadvantages
1. The project is the point of importance. 1. Oftentimes there is apparent tension between
functional manager and project manager which has
the tendency to become personal.
2. Because the project organization is placed on top on the 2. There is conflict and competition in the sharing os
functional divisions, getting labor and talent from them for scarce resources.
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 happens when the project is 3. Matrix management violates the unity of command
finished than a projectized organization because team principle with two bosses- functional head and project
members are still close to their functional organization. manager.
4. Response to client need is rapid and flexible. 4. Decision making can get delayed because
5. With matrix management, the project has access to agreements with multiple functional groups have to be
representatives from the administration of the parent firm. considered.
6. With simultaneous projects, matrix organization permits a
better companywide 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 Functional Manager Authority of the Project
(FM) Manager (PM)
WEAK MATRIX FM calls most of the shots and decides who A PM act as a staff assistant who
- The balance of authority in this does what and when the work is completed. draws the schedules and checklists,
form supports the FM collect information on status of work
and facilities project completion.
PM has indirect authority to expedite
and monitor the project.
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BALANCED MATRIX FM is concern for assigning personnel and The PM establishes the overall plan
- his form resembles the executing their segment of the project for completing the project, integrates
traditional matrix arrangement in according to the standards set by the project the contribution of the different
which both parties work closely manager. disciplines, sets schedules, and
together and jointly approve monitors’ progress.
technical and operational
decisions.
STRONG MATRIX The FM is consulted on need basis especially The PM controls most aspects of the
- The balance of authority in this with regard to personnel. project including scope trade-offs
form is strongly inclined on the and assignments of functional
side of the project manager. personnel.
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.
[Link] - 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
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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.