BAM 062: Project Management

Teacher’s Guide Module # 4

Name: _________________________________________________ Class number: _______

Section: ____________ Schedule: ___________________________ Date: ________________

Lesson Title: Material: SAS

Project Management Organizational Structures
Reference:
Lesson Objective: 1. https://
At the end of this module, I should be able to: www.projectengineer.net/the-
1. Distinguish and explain the different Project Management 4-types-of-project-
Organizational Structures organizational-structure/

Productivity tip:

“Amateurs sit and wait for inspiration, the rest of us just get up and go to work.”- Stephen King

A. LESSON PREVIEW/REVIEW

1) Introduction (2 mins)

Welcome to Day 4 of BAM 062 Project Management! Before you begin, let us have a review

Cite one instance where project closure exists.

_________________________________________________________________________

2) Activity 1: What I Know Chart, part 1 (2 mins)

What I Know Question: What I Learned (Activity 4)

1. What is an Organizational
Structure?

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 BAM 062: Project Management
Teacher’s Guide Module # 4

Name: _________________________________________________ Class number: _______

Section: ____________ Schedule: ___________________________ Date: ________________

B. MAIN LESSON

1) Activity 2: Content Notes (13 mins)

The Project Management Organizational Structure

A common way to differentiate between business organizational structures is between ongoing

operational works versus capital projects. Operational work maintains an existing sales channel, whereas
projects are one-time, unique expenditures with a defined budget, beginning and end dates, and they
accomplish a specific goal.

There are four types of organizational structures, each of which has their own unique set of
influences on the management of the organization’s projects:

Most organizations are divided along functional lines, that is, each “division” is organized by work
type, such as engineering, production, or sales.

Functional organizational structure

In the functional organizational structure, projects are initiated and executed by the divisional
managers, who assume the project manager duties in addition to their regular, functional, roles. They are
often given secondary titles such as “Coordinator of Project X.”

In this structure, project managers usually do not have a lot of authority to obtain resources or to
manage schedules and budgets. They must obtain approvals to utilize resources from other departments,
which can be a complex undertaking. This is because the functional organization is designed to focus on
the provision of the divisional services rather than project deliverables.

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 BAM 062: Project Management
Teacher’s Guide Module # 4

Name: _________________________________________________ Class number: _______

Section: ____________ Schedule: ___________________________ Date: ________________

Functional organizational structure

Project-Oriented

On the other end of the scale are the project-oriented organizations. These companies do most of
their work on a project basis and are therefore structured around projects. This includes construction
contractors, architectural firms, and consultants.

Project-oriented organizational structure

Project managers are usually full time in the role, and for small projects they might manage several
projects at once.
In this structure project managers usually have a great deal of independence and authority. They are able
to draw on resources with little required approval.
In fact, most of these types of organizations have some form of functional divisions which are placeholders
for resources that can be utilized by all projects. They are usually called “departments.”
For example, at an engineering firm the geotechnical department is available as an expert resource to all
projects within the firm.

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 BAM 062: Project Management
Teacher’s Guide Module # 4

Name: _________________________________________________ Class number: _______

Section: ____________ Schedule: ___________________________ Date: ________________

Project-Oriented
Matrix

Although the project-oriented and functional structures are at opposite ends of the spectrum, it is
possible to be located somewhere in between (a hybrid). In fact, most organizations are along some level
of the spectrum, utilizing a structure that gives project managers a bit more authority without losing focus
on the provision of functional services.

Balanced matrix organizational structure

In the typical matrix structure, a project manager is assigned from within one of the functional
departments in either a part time or full time capacity. They are assigned project team members from
various departments, who are released from their departmental duties (at least partially). Thus, a high
priority can be placed on the project while maintaining the functional division services.

However, the project manager and team members are still paid by their respective functional
departments, thus the final accountability for the project still lies at the functional level. For example, if one
of the department managers thinks that they have contributed more than their fair share, the project will
stall quickly.

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 BAM 062: Project Management
Teacher’s Guide Module # 4

Name: _________________________________________________ Class number: _______

Section: ____________ Schedule: ___________________________ Date: ________________

From a theoretical point of view, there are two more adjustments that can be made. A weak matrix
retains the management of the project in the hands of the functional managers instead of the project team,
like this:

Weak matrix organizational structure

On the other side, a strong matrix is still a functional organizational structure, but has a completely
separate project management arm. All of the project roles are still fulfilled within the functional
departments, but the project manager is on the same level as the functional managers.

Strong matrix organizational structure

This project management arm often takes the form of a Project Management Office, or PMO.

In spite of its name, the terms strong and weak matrix are not meant to imply a level of desirability
to the organization. The names have been coined by the project management industry which has studied
the role of projects within organizations, and hence they correspond to strength or weakness in achieving
project success.

Matrix

Composite

Functional organizations and project-oriented organizations are at opposite ends of the spectrum
and matrix organizations fall somewhere in between. But it is possible to utilize both structures at the

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 BAM 062: Project Management
Teacher’s Guide Module # 4

Name: _________________________________________________ Class number: _______

Section: ____________ Schedule: ___________________________ Date: ________________

same time. Therefore, there is a fourth option that requires mention, the composite structure.

Composite organizational structure

This occurs when a project structure and a functional structure both report to a central executive.
For example, a state government department of transportation has a maintenance division which seeks to
maintain the level of service of the state’s roads and bridges, and a capital projects division which builds
new roads and bridges. The maintenance division and the capital projects division are located side by
side, reporting to the executive. This is a composite organizational structure (A matrix structure would
require new construction to occur within one of the maintenance departments – the project manager would
report to a functional manager rather than the executive).

Most organizations lean one way or the other rather than using both structures, because of the
drastically different management styles necessary to perform each of the roles well.

Composite

Examples:

A car dealership wants to initiate a new sales process. It assigns the design and implementation
to the sales manager, who utilizes some of the sales as well as maintenance personnel to develop the
necessary documents and implement the plan. This is a functional organizational structure.

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 BAM 062: Project Management
Teacher’s Guide Module # 4

Name: _________________________________________________ Class number: _______

Section: ____________ Schedule: ___________________________ Date: ________________

A web design firm has a user interface design department, which is available for project work
when necessary. The UI department supports the firm’s projects and doesn’t otherwise carry out much
work on its own. This is a project-oriented organizational structure.

A vehicle manufacturing firm sets up a project to modernize its assembly line, whereby the
project manager is dedicated full time to the project and reports to the executive. The project manager
chooses their project team from the design, production, and maintenance departments, who must balance
their time between their regular duties and achieving their project work. This is a strong matrix
organization.

2) Activity 3: Skill-building Activities (18 mins + 2 mins checking)

Instruction: Read each item carefully and write the word “True” if the statement is correct and “False” if it is
incorrect. Write your answer before each item.

________1. A common way to differentiate among business organizational structures is between ongoing
operational work and capital project
________2. Operational work maintains an existing sales channel, whereas projects are one-time, unique
expenditures with a defined budget, beginning and end dates, and they accomplish a specific goal.
_______3. There are five types of organizational structures, each of which has their own unique set of
influences on the management of the organization’s projects
________4. Most organizations are divided along functional lines, that is, each “union” is organized by work
type, such as engineering, production, or sales.

_______ 5. In the matrix organizational structure, projects are initiated and executed by the divisional
managers, who assume the project manager duties in addition to their regular, functional, roles.
_______6. In the functional organizational structure, they are often given secondary titles such as
“Coordinator of Project X.”

_______7. In the functional organizational structure, project managers usually don’t have a lot of authority to
obtain resources or to manage schedules and budgets.
_______8. In the functional organizational structure, they must obtain approvals to utilize resources from
other departments, which can be a complex undertaking. This is because the functional organization is
designed to focus on the provision of the divisional services rather than project deliverables.

_______9. In project oriented organizational structure, companies do not do most of their work on a project
basis and are therefore ill- structured around projects.

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 BAM 062: Project Management
Teacher’s Guide Module # 4

Name: _________________________________________________ Class number: _______

Section: ____________ Schedule: ___________________________ Date: ________________

_______10. Project oriented organizational structure do not include construction contractors, architectural
firms, and consultants.

3) Activity 4: What I Know Chart, part 2 (2 mins)

For this activity I want you to write your answers on questions based on what you now know in the third
column of the chart.

What I Know Question: What I Learned (Activity 4)

1. What is an Organizational
Structure?

4) Activity 5: Check for Understanding (5 mins)

Instructions: Read each item carefully and identify the Project Management Organizational Structure
that is being described in the statement. Write your answer before each item.

__________________1. In this type of organizational structure, there are often given secondary titles such as
“Coordinator of Project X.”

__________________2. They are usually full time in the role, and for small projects they might manage
several projects at once.

___________________3. This is the term called for most project oriented organizations that have some form
of functional divisions, which are placeholders for resources that can be utilized by all projects.

___________________4. This project management arm often takes the form of a Project Management Office,
or PMO.

___________________5. This occurs when a project structure and a functional structure both report to a
central executive.

This document is the property of PHINMA EDUCATION

 BAM 062: Project Management
Teacher’s Guide Module # 4

Name: _________________________________________________ Class number: _______

Section: ____________ Schedule: ___________________________ Date: ________________

C. LESSON WRAP-UP

1) Activity 6: Thinking about Learning (5 mins)

A. Work Tracker

You are done with this session! Let’s track your progress. Shade the session number you just
completed.

B. Think about your learning by filling up “My Learning Tracker”. Students write the learning targets,
their scores, learning experience for the session and deliberately plan for the next session.

Date Learning Target/Topic Scores Action Plan

What contributed to the quality of your
What’s the What module# did you do? What What were your
performance today? What will you do next
date were the learning targets? What scores in the
session to maintain your performance or improve
today? activities did you do? activities?
it?

Did you have challenges learning the concepts in this module? If none, which parts of the module
helped you learn the concepts?

______________________________________________________________________________
______________________________________________________________________________

Some question/s I want to ask my teacher about this module is/are:

____________________________________________________________________________
____________________________________________________________________________
FAQs

1. What is the difference between a functional structure and project oriented organizational structure?

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 BAM 062: Project Management
Teacher’s Guide Module # 4

Name: _________________________________________________ Class number: _______

Section: ____________ Schedule: ___________________________ Date: ________________

In the functional structure, project managers usually don’t have a lot of authority to obtain
resources or to manage schedules and budgets. They must obtain approvals to utilize resources from
other departments, which can be a complex undertaking. This is because the functional organization is
designed to focus on the provision of the divisional services rather than project deliverables. While in
project oriented, Project managers are usually full time in the role, and for small projects they might
manage several projects at once. In this structure project managers usually have a great deal of
independence and authority. They are able to draw on resources with little required approval.

2. How will and organization maintain a balanced matrix organizational structure?

To maintain balance in the matrix organizational structure, a project manager is assigned from
within one of the functional departments in a part time or full time capacity. They are assigned project
team members from various departments, who are released from their departmental duties (at least
partially). Therefore, a high urgency can be positioned on the project while maintaining the functional
division services. Nevertheless, the project manager and team members are still paid by their
respective functional departments, hence the final accountability for the project still lies at the functional
level. For instance, if one of the department managers considers that they have paid more than their
fair share, the project will stand rapidly.

KEY TO CORRECTIONS

Answers to Skill-Building Exercises

Activity 3:
Activity 5:
1. True
1. Functional type of organization
2. True
2. Project managers
3. False
3. Departments
4. False
4. Strong matrix organizational structure
5. False
5. Composite organizational structure
6. True
7. True
8. True
9. False
10. False

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