---
title: "Types of organizational structure"
subject: "ICT Project Management"
chapter: 5
key: "semester_7/ict_project_management:organizational-structures"
source: https://www.bctengineer.com/q/semester_7/ict_project_management/organizational-structures
site: BCT Engineering
---

# Types of organizational structure

ICT Project Management · Chapter 5: Project and Organizational structure

- Asked in: year not given
- Video: [#ICT_2 Organizational Structure and It's Types in ICT Project Management - Shiva Gyawali](https://www.youtube.com/watch?v=pwbGXhrSssQ) — Shiva Gyawali
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_7/ict_project_management/organizational-structures
- Whole chapter: https://www.bctengineer.com/md/semester_7/ict_project_management/chapter-5

## Question

What are the various types of organizational structure? How organizational structure influences projects?

## Short answer

Types are functional, projectized, matrix, and composite structures. Structure influences PM authority, resource availability, budget control, PM role, and communication. Functional gives little PM authority, projectized high, matrix varies; matrix suits multi-project firms but can cause dual-boss conflict.

## Answer

An **organisational structure** shows how people and activities are grouped, who reports to whom and how authority flows. PMBOK identifies three major types and several hybrids.

#### Types of organisational structure
1. **Functional (classical) organisation**
   - Staff are grouped by speciality (engineering, finance, marketing).
   - Each employee reports to one functional manager.
   - The project manager has little or no authority.
2. **Projectized organisation**
   - Team members are grouped by project and report to the project manager, who has high authority.
   - Staff may be released after the project is completed.
3. **Matrix organisation**
   - A mix of functional and project structures; members report to both a functional manager and a project manager.
   - Weak, balanced or strong matrix, according to the authority of the project manager.
4. **Composite/hybrid** structures that combine the above, and project-based or virtual structures.

```text
 Functional       Projectized       Matrix
   CEO               CEO              CEO
 /  |  \          /  |  \        F1  F2  F3
F1  F2  F3        P1  P2  P3     P1 x   x   x
(staff)           (staff)        P2 x   x   x
```

#### Influence of structure on projects
| Feature | Functional | Matrix (weak to strong) | Projectized |
|---|---|---|---|
| PM authority | Little/none | Low to high | High to almost total |
| Resource availability | Little/none | Low to high | High to almost total |
| Who controls budget | Functional manager | Functional manager to project manager | Project manager |
| PM role | Part time | Part time to full time | Full time |
| PM admin staff | Part time | Part time to full time | Full time |
| Communication | Within department | Complex | Direct, simple |
| Team loyalty | To function | Divided | To project |

- Structure affects decision speed, conflict, use of resources, communication and team morale.
- A functional structure suits routine work, while a projectized one suits large or urgent projects.
- A matrix balances resource sharing and project focus but can cause conflict because staff have two bosses.

**Example:** A software firm that runs several client projects at once commonly uses a matrix structure.

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. What is the project manager's authority in a functional organisation?
   A. Little or none
   B. High to total
   C. Full control of budget
   D. Equal to functional manager
   Answer: A. Staff report to functional managers, who control resources and budget. (Key point: Functional PM authority)

2. What characterises a projectized organisation?
   A. Staff report to two bosses
   B. Staff grouped by speciality
   C. The PM is part time with no authority
   D. Team grouped by project reporting to the PM, with high authority and loyalty to the project
   Answer: D. The PM has high-to-total authority and team loyalty is to the project. (Key point: Projectized structure)

3. What is a main drawback of matrix structure?
   A. No resource sharing
   B. Total project authority
   C. Conflict due to two bosses
   D. Staff loyalty only to project
   Answer: C. Dual reporting can cause conflict. (Key point: Matrix weakness)

4. Which structure suits large or urgent projects?
   A. Functional
   B. Projectized
   C. Weak matrix
   D. None of the structures
   Answer: B. Functional suits routine work, while projectized suits large or urgent projects. (Key point: Suitability)

## Related in other subjects

- [Organizational structure and line organization](https://www.bctengineer.com/question.md?key=semester_7%2Forganization_and_management%3Aorg-structure-line) — Organization and Management, chapter 5
- [Best structure for engineering project](https://www.bctengineer.com/question.md?key=semester_7%2Forganization_and_management%3Astructure-engineering-project) — Organization and Management, chapter 5, asked 2×
- [Ownership and structure for software company](https://www.bctengineer.com/question.md?key=semester_7%2Forganization_and_management%3Aceo-software-ownership) — Organization and Management, chapter 4
- [Org structure definition; line organization pros/cons](https://www.bctengineer.com/question.md?key=semester_7%2Forganization_and_management%3Aorg-structure-define-line) — Organization and Management, chapter 5