Functional

In a functional-type organization, the project manager does have complete authority over the project
team. True or False
False

Terms in this set (15)

Original
The functional organization emphasizes the importance of the contribution of each functional
component's _____ to the company products
A. importance
B. communication
C. message
D. time
E. expertise
E

A project has a significant focus on the in-depth application of new technology rather than minimizing
cost and meeting a specific schedule. Which of the following organizations is the best choice for this
project
A. balanced matrix
B. PBO Project base org
C. strong matrix
D. functional organization
E. none
D

A construction firm is involved in a large number of similar projects, where cost, quality, and schedule is
critical. Which of the following organizations is the best choice for this project
A. weak matrix
B. balanced matrix
C. none
D. functional organization
E. PBO project based org
E

In a ____ organization, the project manager does not have complete authority over the project team,
because administratively team members still work for their respective functional managers
A. organic or simple
B. PBO
C. functional organization
D. strong matrix
C

Which of the following statements if not true about the organizational structure
A. a matrix organizational structure is a hybrid of the functional and autonomous project organizational
structures
B. in the autonomous project organization, all the resources needed to accomplish the project are
assigned part-time to work on the project
C. an autonomous project organizational structure also referred to as a project based organizational
structure is one in which each project operates as its own somewhat independent entity with dedicated
resources assigned to each project
D. a disadvantage of a matrix organizational structure is that conflicts will arise between project
managers and functional managers regarding priorities
B

In which of the following organization types can a PMO not exist

a PMO may exist in any organization type

Which of the following is not true for weak matrix

A. project managers tole is part time
B. workgroup arrangements are by job function
C. project managers authority is low
D. budget is managed by the project manager
D

Once a project is selected, it is formally authorized using a document referred to as ____

A. RFP
B. project charter
C. project plan
D. approval document
E. none
B

Which one of the following is not true about a project

A. establish a contract between project manager and subcontractor
B. summarizes key conditions and parameters
C. All of the options
D. provides sponsor approval
E. establishes a framework to develop baseline plan
A

Project A costs $500,000 to implement and has a net annual revenue of $250,000.
Project B costs $300,000 to implement and has a net annual revenue of $60,000.
Based on the payback period, which project would you choose?
A. Base on the risk assessment, either of the projects can be selected
B. Both Project A and B
C. Project B
D. None of the given options is correct
E. Project A
E

There are 2 projects. Project A has an investment of $ 500,000, and a benefit-to-cost ratio is 2.5. Project
B has an investment of $ 300,000, and a benefit-to-cost ratio is 1.5.
Using the Benefit-to-Cost Ratio criterion, which project will you select?
A. Project A
B. Project B
C. both projects
D. none of the projects
A

If the interest rate is 10%, What is the present value of $11,000 received one year from now?
A. $10,000
B. $11,000
C. $8264.46
D. none of the give options is correct
E. $1,000
A

There are 2 projects. Project A has as NPV of $ 1,000. Project B has a NPV of $ 800. What is the
opportunity cost if Project A is selected?
A. $2,00
B. $8,00
C. -$2,00
D. $1,800
E. $1,000
B
There are 2 projects. Project A has an IRR of 15% and will be completed in 5 years. Project B has an IRR
of 10% and will be completed in 1 year. Which project will you select?
A. Project B
B. Both Project A and B
C. incomplete information provided
D. none of the given options is correct
E. Project A
E

The reporting requirements usually defined in the project charter state the ___________ and
____________ of the project status reports and reviews.
A. control; content
B. control; purpose
C. frequency; content
D. none of the given option is correct
E. frequency; source
C

Terms in this set (21)

Original
Learning Outcomes

• Explain the three types of project management organizational

structures

• Discuss the advantages and disadvantages of each type of project

management organizational structure
• Describe the role of a project management office in a
matrix organizational structure

Functional Organizational Structure

A functional organizational structure is one in which individuals are organized in groups that perform the
same function or have the same expertise or skills.

1. The functional organization emphasizes the importance of the contribution of each functional
component’s expertise to the company’s products.

2. A company with a functional structure may periodically form project teams to work on internal
company projects.
• For such projects, a multi-functional project team is formed, with

members selected by company management from the appropriate

sub-functions in marketing, engineering, manufacturing, and

procurement.

○ individuals continue to perform their regular functional jobs while

they serve part time on the project team

○ the project manager does not have complete authority over the

project team, because administratively the members still work for

their respective functional managers

○ team members view their contribution to the project in terms of

their technical or functional expertise, their allegiance remains to

their functional managers

Functional organizational structures are typically used in businesses that primarily sell and produce
standard products.

• groups consist of individuals who perform the same

function
• concentrates on performing its own activities in
support of the company's business mission
• focus is on the technical excellence and cost
competitiveness of the company's products

Autonomous Project Organizational Structure

An autonomous project organizational structure, also referred to as a projectized organizational

structure, is one in which each project operates as its own somewhat independent entity with dedicated
resources assigned solely to each project.

The organization is
• well positioned to be highly responsive to the project objective and

customer needs because each project team is strictly dedicated to

only one project

5. An autonomous project organization can be cost inefficient.

• can be cost inefficient both for individual projects and for its parent

company

○ each project must pay the salaries of its dedicated project team,

even during periods of the project when they are not fully utilized

○ duplication of resources or tasks on several concurrent projects

○ little opportunity for members of different project teams to share

knowledge or technical expertise

However, there may be some companywide support functions that serve all the projects.

4. In an autonomous project organization, all resources are assigned full time to work on a particular
project. The project manager has complete project and administrative authority over the project team.

In an autonomous project organization, detailed and accurate planning and an effective control system
are required to assure optimum utilization of the project

resources in successfully completing the project within budget.

• found primarily in companies that are involved in very

large projects

• Projectized organizational structures are prevalent in

the construction and aerospace industries.

6. Autonomous project organizational structures are found primarily in companies that are involved in
very

large projects.
Matrix Organizational Structure

The matrix organization provides for effective utilization of company resources.

A matrix organizational structure is a hybrid of the functional and autonomous project organizational
structures, in which resources from appropriate functional components are temporarily assigned to
particular projects that have project managers from the project component of the organization.

The project and functional components of the matrix structure

each have specific responsibilities in contributing jointly to the success of each project and the company.

• The project manager is responsible for the project results

• The functional managers are responsible for providing the

resources needed to achieve the results

9. The matrix organizational structure results in effective utilization of

resources and minimizes overall costs because it allows

for the sharing of individuals’ time among several projects.

10. In a matrix organization, each member of a project team has a dual reporting relationship—to the
temporary project manager and to

a permanent functional manager.

In the matrix organizational structure, the project manager is the intermediary between the company
and the customer.

11. In a matrix organization, the project manager defines what has to be done (work scope), by when
(schedule), and for how much money (budget) to accomplish the project objective and satisfy the

customer.

A project administrator may be assigned to each project to support the project manager and project
team in planning, controlling, and reporting.
7. The matrix organization provides the project and customer focus of the autonomous project structure,
but it retains the functional expertise of the functional

structure.

8. In a matrix organization, the functional components provide a pool of expertise to support ongoing
projects.

• A large project may be assigned a full-time project

manager.

• The project manager then meets with the appropriate

functional managers to negotiate the assignment of

various individuals from the functional components to

work on the project

• These individuals are assigned to the project for the

period of time they are needed

○ it is not unusual for an individual from a functional

component to be assigned part time to several

concurrent projects

Sharing of individuals’ time among several projects results in effective utilization of resources and
minimizes overall costs for each project and for the entire company.

• provides opportunities for people in the functional

components to pursue career development

• individuals become more valuable for future

assignments and

• enhance their eligibility for higher-level positions

within the company.

Matrix Organizational Structure (continued)

12. Each functional manager in a matrix organizational structure is responsible for how the assigned
work activities will be accomplished and who (which specific people) will do each activity.

• provides technical guidance and leadership to the individuals

assigned to projects.

• responsible for ensuring that all work packages or activities

assigned to his or her functional component are completed

• must continually monitor the assignments of the individuals within

her or his functional component

• make any needed reallocations in response to changing conditions

on various projects

14. The Project Management Office (PMO) plays an important

role in the matrix organizational structure. It oversees and coordinates multiple projects.

13. The matrix organizational structure allows for fast response to identified problems because it has
both a horizontal (project) and a vertical (functional) path for the flow of information.

This organizational component is often referred to as the project management office (PMO). Figure 13.3
shows an organizational component for the vice president of projects to whom the project managers
report. Such a unit plays an important role in the matrix organizational structure.

• oversees and coordinates multiple projects

• help to resolve priority conflicts between projects and

• can facilitate decisions regarding priority among

projects

• provide support, such as project management training

for project teams