Masaryk University

Faculty of Informatics

Master Thesis

Project Management in Matrix

Organization

Student: Agron Zylali, 395777

Brno 2014

Statement
I declare that I have worked on this thesis independently using
only the sources listed in the bibliography. All resources,
sources, and literature, which I used in preparing or I drew on
them,
I quote in the thesis properly with stating the full reference to
the source.
Agron Zylali

Supervisor: RNDr. Stanislav Michelfeit

Contents
Abstract ..........................................................................3
1. Introduction ............................................................ 5
2. Background Literature and Theory.......................... 6
3. Project Management ............................................... 7
3.1. Project Life Cycle ................................................ 9
3.1.1. Project Initiation ............................................. 10
3.1.2. Project Planning .............................................. 14
3.1.3. Project Execution ............................................ 19
3.1.4. Project Closure ............................................... 20
3.2. Project Decomposition ....................................... 23
3.2.1. Product Breakdown Structure.......................... 23
3.2.2. Organization Breakdown Structure ................. 24
3.2.3. Work Breakdown Structure ............................. 24
3.3. Project Organization .......................................... 25
3.3.1. Functional Organization .................................. 26
3.3.2. Projectized Organization ................................. 27
4. Matrix Organization ................................................ 29
4.1. Literature Review .............................................. 29
4.2. Interview Procedure ........................................... 32
4.2.1. Questions related to Matrix Structure
Organization ............................................................. 34
4.2.2. Questions regarding the projects in Matrix
Structure Organization .............................................. 46
5. Conclusion ........................................................... 57
6. Bibliography ......................................................... 59

Abstract
This diploma thesis contains a topic regarding project
management, mainly concentrated about projects in matrix
organization structure, which is a blend of functional and
projectized organization. Initially I will elucidate the
significance in detail for each various type, with the
enlightenment of advantages and disadvantages. Furthermore I
will focus on responsibilities of each organization line within
the matrix organization mainly for managing a project,
including as well the influence of work breakdown structure
(WBS). Entirely I will illustrate the interaction between these
lines throughout project lifecycle in project management
processes. Subsequently I will advice some kind of
recommendation concerning suggestions in terms of using
each organization type for some different variety of projects.

Keywords
Project, Project Management, Matrix Organization, Functional
Organization, Projectized Organization, Work Breakdown
Structure, Project Lifecycle

1. Introduction (1) (2)

The area of Project Management fortunately does not
simply contain a specific definition and explanation, because it
has been enlightenment in various different approaches and
manners, but the most common one used are the ones given by
PMI (Project Management Institute), which defines the
Project Management as the application of knowledge, skills,
tools and techniques to project activities to meet or exceed
stakeholder objectives and expectations from a particular
project (2) and the other definition formulated by ISO 10006
which describes it as follows: Project Management is the
planning, organizing, monitoring and controlling all aspects
and activities of the project in a continuous process to achieve
its planned objectives (2)
Both of definitions specified above are accurate since
they provide a clear explanation seen from different
perspectives of what really this discipline is and what
managers and leaders in general suppose to do in order to drive
the project till the successful completion through predefined
sets of activities.
This discipline has been and continues to be applied in
many different industries, rather than in specific one and not
all of them manage it in the same way. Therefore,
organizations based on their strategy they have, structure,
service they provide and the method they perform, differ from
each other the way they manage the projects, because of
applying completely compatible project life cycles for their
particular needs.
The approach chosen by the
organization on how the projects will be managed has
extremely high impact, and it is very important for the
organization since it is the key to the success.

2. Background Literature and Theory (3) (4) (5)

Despite the fact of being a modern discipline, its origin
starts from the latter half of the nineteenth century, evolved
mostly from the approach of how people used to organize and
manage their work, especially when the business in the world
started to develop into complex. In that time, people believed
that the only method of improving the productivity was
working harder and longer, in contrary according to Frederick
Taylor analysis it was brought into the market the concept of
providing more efficient work. Another significant person of
the management principle is Henry Gant, who created the tool
called Gant chart, which enables people to better organize and
control their work. These two scientists are considered to be
the father of scientific management.
The management process mainly achieved its peak in
the middle of the twentieth century where the two project
scheduling models were introduced to managers for facilitating
a control over complex projects. These two models are: CPM
(Critical Path Method) is an algorithm for setting up activities
for a particular project and PERT (Program Evaluation and
Review Technique) which beside being a method and
technique for better analyzing the tasks and activities, its main
functionality is to evaluate the minimum period of time
required to successfully complete the project.
Subsequently, the area continued to improve and it
reached the attention mostly when two non-profit
organizations were created; IPMA (International Project
Management Association) in 1967 and PMI (Project
Management Institute) in 1969. They had a high impact on
increasing the significance of various industries for managing
projects. Both of them were mostly concentrated on increasing
the knowledge, developing and continuously improving the
Project Management area by providing different kind of
services for managers and leaders; for instance professional
education, books (Project Management Body of Knowledge),
working guidelines prepared by experienced project managers,
trainings and seminars held by experts, instructions given by
qualified and skilled leaders, networking etc.

3. Project Management

(6) (7) (8)

Project Management is very comprehensive and

attractive area, seen as a science or modern discipline.
Furthermore, it can be considered as well as a matter of art to
manage a project from the beginning, through the lifecycle till
the successful closure.
The discipline had a huge impact by its various
significant benefits within organizations, influencing the
business world. All this occurred by the result of concentrating
through different outcomes such as: improving the customer
satisfaction by increasing efficiency in delivering services.
This can be easily identified by the objectives of this area, for
instance:
-

recognizing additional risks, analyzing and

making correct decisions by responding with a
proper solution. This can be named as Risk
Assessment;
ensuring the completion of the project within
budget and time, by using specified resources;
having control of the project for facilitating the
tracking of it;
increasing the quality;
improving the communication within the
organizations;
the achievement of projects goals;
the most important objective is to simply ensure
that customers specific needs and requirements are
met, etc

Project Management principally supports three related

fundamental levels, and they are: Projects, Subprojects and
Programs:

Project: is basically created once, it is specific

and temporary, undertaken by a member, team or organization.
It is a unique process established to achieve or deliver an
output, consisting of controlled and well coordinated set of

activities in line with cost, time and specific resources. In

essence, it refers to a particular outcome in a kind of product
or a specific service created and developed by a team which is
run by a leader. Projects are not the same as operations; they
differ from each other from the viewpoint of the functionality
since projects are unique and temporary consisting of a
beginning and the end, while operations are ongoing and
repetitive with no start and end,

Subproject: same as the projects, it is a

temporary process, undertaken with the aim of producing an
outcome, product or a service. It is basically a set of activities
and work divided from a single project in case of it is a big or
more complex. It is divided among more manageable parts
which are called Subproject, in order to be able to better
control, manage and facilitate the completion of it by assigning
the right employees in the area which they are specialized and
experienced. Even though they are split from projects,
subprojects are mostly considered and treated like a project,

Program: While the Project intends as an

outcome to achieve a specific service or a kind of product,
Program is a process undertaken to achieve a mission or a
strategy. It contains several projects and ongoing sets of
activities. It actually refers to multiple interrelated projects, in
order to be able to improve as well as facilitate the general
control and management within the organizations. This process
of managing is known as Program Management.
It is worth pointing out that in general Projects and
Programs are not the same; they differ from each other,
therefore the main and most significant differences between
them are as follows:

Project:
is temporary
has a start and an end
supports service as an
outcome
has a specified scope
focuses more on the
outcome

Program:
is ongoing activity
has no beginning and
no end
supports strategy as an
outcome
can have a wide scope
focuses more on the
benefit

The scheme how the Project, Subproject and Program are

in general structured within an organization or company is as
follows:

Picture 1: Project Management

Tool used: http://www.wbstool.com/WBSEditor.php

3.1. Project Life Cycle (9) (10) (7) (11)

In order to be able to manage projects in most
effective and efficient way for delivering an outcome or
service, managers are going through an approach called
Project Life Cycle. Each organization or company, or even

each manager can have its own way of managing or personal

approach which may be differentiated from one other. The
reason of not having a unique one is because it depends on the
type of the project or the business it is needed. However, over
time a standardized Project Life Cycle has been created, which
is considered as a base for any decided approach by the
manager or the leader. By this standardized approach, a
manager can adjust it to his type of project or business.
The mentioned standardized approach consists four
significant interrelated phases which are: Project Initiation,
Project Planning, Project Execution and Project Closure.
Basically, a meaning behind this phase is: Start-Plan-DoClose! However, there is another additional phase which is
called Controlling. Actually, it depends on the manager or
leader, whether he/she is going to consider this activity as a
phase itself and put it as a separate one, or whether he/she will
apply its functionality throughout the whole approach of the
project.
Clearly, each phase has different functionality,
characteristics and is helping a leader to better plan the way he
will manage the project, although from all of them it is
expected to deliver a result which facilitates him or her to
make a decision to further proceed or turn back. Except the
fact of having a standardized way of managing a project, it is
still not enough for delivering what is expected or being
successful, and indeed a careful, detailed and analyzed
planning is required.

3.1.1. Project Initiation (9) (10) (7) (11)

The first phase of Project Life Cycle is called Project
Initiation. This stage is considered as very significant and
critical for its importance since a leader establishes the projects
objectives and defines deliverables. In case that this phase is
not analyzed and defined properly by the leader, it increases
the risk of not succeeding, meaning of project failure or it may
also occur to late delivery. The mentioned phase can be very
broad and can contain numerous steps, however in the

10

following part the thesis concentrates on covering the most

essential phases and steps in general.
It is worth to point out that this phase is also
subdivided into further steps:
- Feasibility Study: This stage is the first stage that the
leader performs after receiving the project proposal or after the
project proposal has been sent. It means undertaking a detailed
study of the offer/project/business case, analyzing the
requirements and resources as well; identifying any kind of
problem; estimating how big and how complex the project or
offer is; foreseen a risk or issue that may occur, which can
have an impact during the project life cycle and prioritizing
them based on their importance; additional delays; building a
plan in order to avoid the mentioned risks and issues;
identifying and classifying a list of solution in case a risk or
issue occurs; identifying the business environment and
collecting the business information, etc. For all these studies
and analysis, a document usually is prepared containing the
outcome of analyses, with tables and matrixes. Afterward the
document is presented and communicated within the Portfolio
and Program level of the organization or company in order to
evaluate it. A brief example of one of these tables that can be
found in the document of the feasibility study, may be written
as the instance given below for risks:

Risk
Description

Probability

Impact

Action

Instance 1

L/M/H

L/M/H

Action 1

Instance 2

L/M/H

L/M/H

Action 2

Table 1: Feasibility study (Risk Analyses)

Risk Description: a brief description of a risk that may

occur during the project lifecycle;

11

Probability: a probability that a risk may occur in

future, usually is evaluated as follows: Low, Medium and
High;
Impact: a level of the impact that may have if the risk
occurs, this also may be estimated by: Low, Medium and
High;
Action: A description of the solution, in case a
particular risk occurs.
- Projects Objective: In some organization this phase is
called in different way, for instance: a mission or a vision. The
manager in this stage first defines the objectives of the project.
Clearly each project has a common goal: success, meeting
and/or even exceeding the expectations within the time and
within budget. However, apart from this, projects may also
have other objectives to. Therefore, to better and easily
identify the objectives, there are usually some questions
answered by the leader such as: Why this Project? What is this
Project? Is it feasible? What will be the outcome? What are the
circumstances? What are the expectations?
- Deliverables and Requirements: Apart of the above
mentioned quantitative analyses the manager studies the
deliverables and requirements to. They are stated in contracts,
but sometimes it may not be sufficient to fully define all
requirements. There is also another fact to be considered,
whether the deliverable is a product/service or result because
for each category there should be different analyses performed.
However, for each type it is significant to be defined as much
as it is possible. Of course, there are some questions where the
answers given can provide us a clear picture for deliverables
for instance: What is required? Is it new or existed? Where is
the location? How many should be delivered? etc. As for
Requirements based on the type of the project there can ban
various questions, and from the outcome the manager defines
the requirements by following step: Gathering, Categorizing,
Validating and creating Requirements Baseline. When having
all information in place, afterwards manager ensures that his or
her team stakeholder, sponsors and everyone involved in the

12

team fully understand the projects objective. In order to avoid

any kind of misunderstanding in future, usually managers
writes it down and stores it as evidence.
- Project Charter: Finally, after having all studies and
analysis done and documented, also presented and discussed
with the people involved in project, manager prepares the
Project Charter. Beside the manager, also a sponsor can
prepare this document. A sponsor is an individual or may be an
organization that has an authority to ensure or delegate a
formalization of agreement with the delivery. This document is
an official document where the projects scope, objectives,
rules, time, budget, requirements, framework and other
information are clearly defined. This document usually is up to
ten pages, based on the size of the project; sometime a verbal
agreement is done for small projects but still it is
recommended to have it in paper for future evidence. Project
Charter can be structured in a different manner since it may
vary on the type of the project and organization, but usually it
contains the following sections: Project Purpose, Objective and
Requirements, Description of the Project, Schedule, Budget,
Resources; Project Manager, Team members and Resources.
Usually after all have been analyzed, in order to make
it fully certain, sale manager consults with the quality team
and engagement team, to review again if the project is feasible,
doable, and possible before they submit the contract with the
client.
- Assigning the Project: In this phase a leader takes the
first step after performing a feasibility study, with reviewing,
analyzing and also taking the motive under consideration of
accepting the project. After having the result, a leader
approves its launch and he/she confirms the right person
responsible as Project Manager in order to drive it from the
beginning till successful completion. Usually a decision is
made by considering from one side how complex and big the
project is and from the other side employees knowledge,
experience, capability and availability. Afterward the Kick Off

13

is sent, and the Project Manager can continue with the further
responsibilities. However, there might be some situations
when the Project Manager is part of the Project Initiation
Phase from the very beginning. This has a positive impact and
is effective since he/she is aware of the project, and when the
Kick Off is sent there is no need of further analysis of the
contract, he/she can immediately start with the next phase of
the lifecycle.
It is very apparent that the manager or leader should
initiate very carefully and pay attention the mentioned phase
since it may increase a risk to project failure, not to be
successful, in time or within the budget, for instance:
unforeseen risks/issues or in case the assumed solution for
foreseen risks are not feasible, or not clear defining of
requirements, resources or conditions, no clear communication
which can cause a misunderstanding, etc.

3.1.2. Project Planning (9) (10) (7) (11)

- Project Planning is the second stage of Project Life
Cycle. It starts right after the Kick Off has been sent, and
everything has been properly described. Project manager
before establishing his/her detailed plan, he/she starts with
his/her action as follow: creates the team through Team
Member Selection and organizes meeting with the team
members in order to ensure that the team has all necessary
information that will be needed in the future.
Team Member Selection is not the same in every
Organizational Structure. However, the thesis is focused
mainly on the Matrix Organizational Structure and both of
them will be explained later in detail.
This stage is estimated with high significance because it
ensures that the team has a clear and understandable view for
the project, especially for the following parts: WBS, OBS,
PBS, plan, financial plan, activities, tasks, durations, resources
and many more information. The mentioned parts are used as a
guide, reference or database knowledge by the project manager

14

and the team. This means that it gives them basically the
management methodology and principle which is going to be
used in order to achieve the objective and the goal. All these
plans may be documented in one document, but it is
recommended to create each one of them separately to be
properly sequenced.
WBS, PBS and OBS will be explained in a following
chapter of the thesis.
- Project Plan is considered as the main document. It
is mostly used by the project manager in order to track the
work and progress. He/she especially concentrates on two
things: costs in order not to exceed the budget, and dates in
order to ensure that the service/product/result is delivered no
later than agreed time with the customer. It also helps to
reduce
constrains,
uncertainty
and
avoid
the
misunderstandings. Beside that it contains the major phases of
the project which are required to be undertaken also it needs to
cover the below information:
- Statement of work: can be also found in a different
name, for instance: Work Defining stage or Work
specifications stage, etc. however it is a formal document
which is written by project manager with the main purpose of
defining the scope of the work. To define the scope the
following information must be issued and included in detail:
the activities, location, tasks, dependencies, roles,
responsibilities, duration, schedule, dependencies, financial
plan, communication, approval etc.
- Activities (Tasks): defines accurately what work are
going to be done, what action is exactly going to be
undertaken, the characteristics and the impact of achieving the
outcome.
- Roles and Responsibilities: provides clear
information for each team member for what assignments they
have been assigned, what are the responsibilities of each
activity/task and what is expected from them to perform. Tasks
are assigned to current stuff based on some factor: the
experience, knowledge, availability and willingness.

15

- Duration and schedule: contains timeframe for each

activity and task. For having a better structure, milestone can
be used as well. Milestones are used to group the activities into
one group. In order to easily track the schedule and control it,
it is vital to have the following points: start date and end date
of each activity. The sum of duration for each activity should
not be later than the agreed time with the customer for
delivering the requirements. However, it is not that easy as it
may look to define the overall duration of the activities. There
are a lot of factors that should be taken under consideration;
therefore when setting up the duration and schedule, a deep
analyze of everything should be taken: feasibility of
completing the tasks, the amount of work, the dependencies,
complexity, resource availability, etc. Beside the professional
analyzes also the calendar should be part of analyze, meaning
of public holidays, even weather, the absence of the employee,
etc. A method which is used in this phase is CPM (Critical
Path Method). This method is known and is widely used as a
project management tool. It is a model as a network with
nodes, which refers to activities and nodes which refers to start
and end point. It is used mainly to predict the time required to
complete each activity and the project itself. Another
important characteristic is that it helps to identify which
activities are critical, by finding the path which requires a
longer amount of time.
- Dependencies: there are four types of dependencies,
which helps better understand the meaning of it:

Finish-to-start (FS) means that the current task

cannot start if the previous task is not completely
finished. This dependency is very common in project
management,
Finish-to-finish (FF) means that the current task
cannot finish if the previous one is not finished,
however it does not mean that they have to end at the
same time,
Start-to-start (SS) means that the current task needs
to start in order next task to start with the work,

16

Start-to-finish (SF) means that current task cannot

finish until the previous one starts. This dependency is
very rarely in project management in general.

- Feasibility study: is been reviewed one more time, in

more deep studies and analysis to prevent any constrain and
avoid any kind of obstacle that may happen. Sometimes this
part maybe called a Risk Plan, but still the resource is the
same, the feasibility study which is performed in detail during
the initiation phase of the project.
- Financial studies: these studies are performed after
having all information for activities, tasks, resources, duration
clearly identified. It contains a list of the expenses for each
member of the team, equipments, administrative costs, etc. It
may also have a schedule of when and what will be paid. After
having the price for each expense, a total sum is being
calculated in order to simply check how much will be spent to
finish the projects. A simple example of how the evidence of
each project member and/or equipment maybe calculated can
be found below:

Role

Unit cost

Equipment Unit cost

Project manager

Cost/hour

Computers

Cost/item

IT specialist

Cost/hour

Furniture

Cost/item

Administrator

Cost/ hour

Materials

Cost/item

Total price

Amount

Total price

Amount

Table 2: Members cost

Tool Used: MS Office 2010

Table 3: Equipments cost

Tool Used: MS Office 2010

- Communication plan: is about the internal

communication and a communication with the customer. The
internal one is usually scheduled by the project manager with
the team and portfolio manager. These communications are
usually done with meetings and are highly significant for the
project managers since even they have everything in place,
they cannot simple assign the responsibilities to the team
members then to sit and to except what is required from them

17

for achieving the goal. He/she has to be continuously proactive by tracking the work and progress for having a better
control. This can also have an impact of motivating the team.
In every meeting, a certain topic is discussed based on the
phase the project is. The communication with the customer is
also important since the client has a high focus on the requests
and the requirements, and above all because they are paying
and thats why they are willing to be informed, therefore a
meeting is held to inform them regularly about the current
status, project activity and tasks status, the progress meaning
of what has been done, and what are the next steps, or in case
there is a proposal change to provide the information, etc.
Usually every communication is being saved to have it as
evidence that what was exactly discussed at the certain time
and place. In some organizations, you can find it in some
platform which can be called as follows: MoM (Minutes of
Meetings).
- Approve Project Plan: after having the document
prepared, it is sent to portfolio level, which is reviewed and
approved. This approval includes the authorization of budget
and work to begin with the work. It means a negotiation of the
project manager with the portfolio or organization level to
approve the budget (amount of money) and resources to allow
the team to spend for specified activities within the given
period of time. This approval varies depending on the type of
organization, it can be simple verbally agreed or it can be
officially documented. For instance in Matrix structure
organization it is officially documented instead of verbal
agreement. The reason is because it is considered as a contract
of work and is supporting the sub-projects. Basically, the
project manager is in the middle and is like a bridge of
communication between the organization and the team. He/she
has to convenience the organization for getting the approval
and then is responsible to allocate it to the team, meaning that
he/she has to ensure that the team has everything necessary
and what is needed to perform their work and what is
expected. After having this authorization approval confirmed,
the next stage can be running.

18

3.1.3. Project Execution (9) (10) (7) (11)

Clearly this phase takes more time and more energy
than any other phase. In this phase, it is time to perform
everything that has been analyzed, studied, documented and
approved. Not only this, but also to track, control and ensure
that everything is going towards the right path.
- Time Management process performing: this process
helps the manager to increase the possibility of delivering the
outcome, facilitates the monitoring and tracks the current time
spent against the planned time to be spent. Not only time, it
also helps to check the current status of the activities and tasks
performed, the ones that are completed and which ones are
about to complete. Beside this, a manager can also record
information collected during this process. For the record, the
following tool is used: Timesheet. Usually it is completed on a
weekly basis, for having a weekly status of the work
performed by the team.
- Cost Management process performing: this process
helps the project manager to control the expenses which are
being recorded from the team member by using the following
template: Expense Forms. It basically gives a clear and
accurate view to the manager with the following information:
amount of money spent for each activity, the date when it
occurred, the type of the expense, etc. The expenses usually
are approved before they are purchased and are registered by
the manager for having evidence through Expense register log.
- Quality Management process performing: The
purposes of this process it to initiate the continuous increasing
or improve the quality of the teams deliverables. This is very
critical since the manager will have a control of the quality of
the target which should be accomplished.
- Change management process performing: not all the
projects are being performed successfully from the beginning
till the end as planned and because of that it is very rare that
the change management is not being used. The reason is that
unforeseen incidents almost always occur. Even that
everything may look perfect in the beginning, still during the
project phase it is very likely that a problem may raise or a

19

better way of performing the activity may evolve. For not

experiencing bigger issues the project should be flexible to
adjust to a particular change. Change management is usually
agreed with the customer and is being written in the contract.
It contains the condition on who can request the change,
timing window and the change template. It is actually in
companies favor, because out of this change they can benefit
from it by receiving another profit. Every change is recorded
with the following information: requestor, time, reason,
solution, etc. The managers should be very careful when they
accept change since they should ensure the change do not
impact the scope and the time of the project.
- Issue and Risk management process performing: is
also very critical. The main purpose is about identifying,
monitoring, solving and mitigating anything that may affect
the project. The analyses are undertaken during the Initiation
phase, therefore when a foreseen risk or issue appears a
solution is in place. However, it can appear in any phase of
the project lifecycle and in case an unforeseen risk or issue is
being identified than it should be immediately raised,
registered, analyzed, solution or action should be find,
approved and then applied.
- Communication management process performing: as
the process stated above, is about having regular meetings,
preferably weekly, in order to be informed with the following
information: the work, process, schedule, etc. It should be
managed and registered by the project manager.
- Project review process performing: may be
performed by the end of each phase, in order to have the
accurate results of the actions undertaken and produce the
result to the portfolio level. Usually the reviewers are some
independent skilled persons outside the current project in order
to review it more objectively.

3.1.4. Project Closure (9) (10) (7) (11)

Project Closure stage is the last one of Project Life
Cycle. When the result, product or service has been
successfully delivered to the customer, it means that the

20

project should have accomplished the objective. However, this

does not simply mean that the project manager has finished
with his duty; therefore there are some further steps that should
be taken from his side: to perform the closure of the project.
This action requires time and budget, but still it is very
significant since it is the evidence of what and how was
performed, later the level of success of the project can be
reviewed by the third party, can be taken as a reference for
other managers, especially for the new ones to improve,
develop and gain new knowledge. As all phases, also this part
is subdivided into further steps:
- Documentation of Project Closure Report: this
document is usually prepared by the manager, submitted by the
project sponsor and then is sent to customer for agreement
confirmation. The very basic closure document contains a
detailed description of what was the objective, including: the
request, deliverables and benefits; than information of what
actions were performed, which is the most vital: activities
performed, risks and issues, what solutions were taken to
overpass the problems; also information about the expenses,
schedule: when the project started and when the project was
closed. Nevertheless a detailed closure document may contain
all information in detail regarding the project, beside the ones
that were mentioned above, it may include also: resources,
team members; change management: in case a change was
needed to be taken, also communication which was performed
with the customer, etc.
- Customer agreement request: after completion of the
mentioned report, it is the moment to send it to the customer,
to review the project report and to confirm the agreement.
After receiving the confirmation from the customer, the
manager finally informs his/her team and everyone else that
was associated with the project.
- Lessons learned: this information is highly important
and it is also documented. In companies, usually a meeting is
held to discuss with everyone regarding the lessons learned
from the particular, or a questionnaire may be send to the
team. This document contains the following kind of
information: What went well in project? What could have been

21

done better? What went wrong? How the issues/risks could

have been avoided? What are the recommendations? The
purpose of this document is that it can be later used on new or
similar projects.
- Archive data: finally this is the last step that should be
performed by the project manager. After having all
information collected, sorted, written, maintained and
documented, than he/she follows the companys processes,
procedures and rules to archive the data in order to protect the
information.
It is not common, but it is worth to point out that after
all mentioned actions are performed, there is another
additional stage: PIR meaning of Post-Implementation
Review, usually done by portfolio or program level of the
company. The endeavor has a single aim, to do the overall
assessment of the success of the project and especially the
managers work, by deeper analysis of benefits realizations,
objectives achieved, time management, risk and issue
management, what was achieved, etc.
Below is given a picture (nr: 3) of the Project Life
Cycle.

Picture 3: Project Life Cycle

Tool used: Paint.

22

3.2. Project Decomposition

Decomposition is known as a hierarchical structure or
subdivision of project deliverables (products), staffing
resources and work into smaller components, with the
intention of better managing. This is also known as breakdown
structure. There are three different types of decomposition:
Organizational Breakdown Structure (OBS) which answers the
question: Who? ; Product Breakdown Structure (PBS) which
answers the question: What? ; Work Breakdown Structure
(WBS) which answers the question: How?

3.2.1. Product Breakdown Structure

(6) (12) (13)

This kind of decomposition focuses on structuring the

deliverables into components. It gives a clear understanding on
what is going to be delivered, actually what is needed to be
delivered in order to achieve the projects goal/s. PBS is
required to facilitate project managers work to identify all
work products, establish logical relationship of building
collocation and to develop the WBS. By this we, understand
that PBS precedes WBS.
Usually, when the PBS is created the final product is
put in the top of the structure or hierarchy and then is
subdivided into categories and/or elements of the project
deliverable. Below is given a picture (nr: 4) of Product
Breakdown Structure:

Picture 4: Product Breakdown Structure

Tool used: http://www.wbstool.com/WBSEditor.php

23

3.2.2. Organization Breakdown Structure

(14) (15)

Organization Breakdown Structure (also known as

Organizational Breakdown Structure) illustrates the
responsibilities of activities of the individuals working on a
particular project. This form basically describes the team
structure of the project organizational unit and department. It
also facilitates the understanding of the following points: the
relationship of projects with subproject and relationship of the
reports within the organizational units.
Below is given a picture (nr: 5) of Organization
Breakdown Structure:

Picture 5: Organizational Breakdown Structure

Tool used: http://www.wbstool.com/WBSEditor.php

3.2.3. Work Breakdown Structure

(6) (16) (1)

This variety of decomposition is the most known and

the most used one. There are different definitions of it however
Project Management Body of Knowledge (PMBOK), defines
the Work Breakdown Structure as follows: a deliverable
oriented hierarchical decomposition of the work to be executed
by the project team. (6)
Work Breakdown Structure is considered as a vital
step and it is established during the initial phase of the project,
right after the scope is identified. It represents the work as an

24

activity and also ensures that the project contain all the
required work to successfully accomplish the defined project
objectives.
Project Manager creates the WBS for different related
purposes: to define the hierarchy of the deliverables with the
frameworks, to provide a better understanding of a project
scope through graphical draw and/or textual sketch, building a
system to assess and integrate the performance of cost and
schedule, facilitates the reporting organization. All these
functionalities help the project manager to track the status of
the projects progress.
Below is given a picture (nr: 6) of Work Breakdown
Structure:

Picture 6: Work Breakdown Structure

Tool used: http://www.wbstool.com/WBSEditor.php

3.3. Project Organization

This part of the thesis elucidates the following three
major organizational forms for projects: Functional
Organization, Projectized Organization and Matrix
Organization. However, it will mainly focus and concentrate
on the third organizational type.

25

3.3.1. Functional Organization (17) (18)

This type is known also as traditional category of
organization. Over the past years, it has successfully
accomplished the requirements with satisfactory control and
minor issues. Nevertheless, as recently the business
developments rapidly changed in terms of technology
improvements and nowadays needs including the increasement
of stakeholders demands, have created serious weaknesses.
The mentioned aspect means that previously organizations
could endure with even one or two product lines, but, as time
went through the experts came to a conclusion that this
survival depended on a following so called factor
diversification, which means having multiple lines. However,
as the organizations developed the companies noticed that the
activities unfortunately werent effectively integrated and it
caused in increasing of issues and conflicts. This was the
motive of inventing the newer and better organizational forms
which will be explained in the following part.
This variety of organizational form has some
advantages such as: the functional manager establishes the
budget of the projects and after approval from the upper line
has a full control over it. The responsibility is clearly defined
and channel of communication is well planned since
employees report to a single individual. This feature also helps
the functional manager having a good control and overview
over the team members.
Beside the good points, unfortunately there are some
negative aspects of this type of organization as well. The most
significant one is that there is no client focal point. In this
organizational type usually are several layers between the
customer and project thus, this characteristic causes a slow
response to customers needs. Decision making processes are
usually slow since there is no member directly responsible for
the ongoing project and the top level management is involved
in daily routine work. This tends to decreasement of
motivation for employees. Also, project managers work more
as coordinators since the functional managers have authority.

26

Below is given the picture (nr: 7) of the Functional

Organization:

Picture 7: Functional Organization Structure

Tool used: http://www.wbstool.com/WBSEditor.php

3.3.2. Projectized Organization (17) (18)

Nowadays this organizational kind is mostly used by
the companies. It is known for the fact that the project
managers maintain full authority for ongoing projects after the
authority has been given by general manager. Having the full
control and overview of the project means that team members
of the project are directly responsible to manager of the
project. This method of reporting and communication has a
significantly high impact on establishing the communication
channel within the team. This kind of strategy leads to quicker
decision making process which makes the project capable to
react rapidly for new customer needs and demands.
When it comes to the perspective of analyzing the
other view for this kind of organization, unfortunately there are
several negative points of it. When this form is applied and

27

implemented especially in a company which is multi-product,

running several project in the same time, it will be expensive
to cover all the expenses. The reason is that each one of the
running projects should be fully staffed. Individuals are
assigned to a single project, therefore there is no space and
availability of sharing individuals for reducing costs. This
leads to duplication of the personnel. Although, another fact
that should be consider is the availability of facilities and
equipments. The conflict may arise if there is a situation where
the same equipment is required in the same time for two or
more different and/or not related projects. In this situation the
upper level of management decides which project to use it first
based on the several aspects: impact, importance, priority etc,
or another solution is duplication of the facilities which will
increase the cost. Further weak and worrying point for
individuals of the team is the career continuity and
opportunity.
Below is given the picture (nr: 8) of the Projectized
Organization:

Picture 8: Projectized Organization Structure

Tool used: http://www.wbstool.com/WBSEditor.php

Matrix Structure Organization takes part in the

following of the thesis as chapter.

28

4. Matrix Organization
The following part of the thesis contains the focus and
the concentration on the Matrix Structure Organization. In the
beginning the literature review will be enlightened, afterward
it will be followed by the interview made with individuals,
who are part, actually have experiences in such structure and
analysis done of the outcome from the interviews.

4.1. Literature Review (19) (20) (18) (21)

This kind is a blend of two mentioned organizational
forms: Functional Organization and Projectized Organization.
It has been established with the idea of combining the
advantages of the two mentioned structures and creating a
single form which will deliver higher efficiency with minimum
risk. However, it is worth to point out that even this form does
not provide the perfect solution for organizations that are
implementing it in their business since there are several
challenges in general that they are experiencing.
This sort of organizational structure was first
incorporated by huge oil industry, large car manufactures,
high-technology companies, such as NASA, etc. They had to
adapt to such a structure, for improvement and facilitation in
order to deal with the customers increasement demand.
There are two cords of ordering (commands) in Matrix
Structure Organization, which are known as vertical and
horizontal. When a draw of this organizational chart is made
in blank paper, it results to a matrix form and this is the reason
why it has been called in this approach. The vertical line
represents the operations and deals with issues related to the
project whereas the horizontal line represents the functional
division and therefore deals with the problems directly related
with it. Each project in the vertical line of the organization has
an individual responsible as Line Manager for a project which
is usually temporary and in the other side also each functional
division has an individual working as Functional Manager
whereas this line is permanent.

29

The figure given below nr: 9, demonstrates a clear

view how classical Matrix Structure Organization resembles.
However, it may differ in terms of how it is implemented in
certain organizations and/or companies depending on their
business need, but they all are based on the instance given
below nr: 9. In some organization and/or company, an
individual may be hired with the following position: Program
Manager, whose responsibility is to have a control over all
running projects.
Below is given the picture (nr: 9) of the Matrix
Structure Organization:

Picture 9: Projectized Organization Structure

Software used: SmartDraw (http://www.smartdraw.com/)

The jobs responsibility of the functional manager and

line manager is different but very crucial for making the
Matrix Structure efficient within the organizations and/or
companies work. Therefore, their collaboration should,
actually must be in high and professional level. Another fact
which should be taken under consideration for making the

30

collaboration effective is that their roles and responsibilities

should be clear and fully understood by each and everyone
within the team. However, their task may be depended on how
the structure is applied and implemented, but their general
tasks are the same.
In general the main responsibilities of the functional
manager in Matrix Structure are the following: ensuring the
project meets the objectives, controlling of scope, budget as
well schedule, monitor the progress and improvement of the
projects, supervising the project resources, organizing
meetings with the client and stakeholders, etc.
In general the main responsibilities of the line manager
in Matrix Structure are the following: ensure the resources and
data for the projects, maintain technical excellence for project
managers, controlling and managing technical stuff, organizing
trainings for project team members, participating in meetings
with project managers for information purposes, etc.
It is very common that functional managers put the
line managers under big pressure to ensure more resources for
the project. The reason is that functional managers somehow
depend on line managers to meet the project objectives, since
they need the right resources and equipment/technology.
Furthermore, considering the perspective of the vision, it
differs between them since the functional managers are
focusing on the project itself only, which means they are
concentrating on the short-term goals, while on the other side
the line manager are concentrating on the long-term goals
because they are part of permanent division within the
structure.

31

4.2. Interview Procedure

The interview was conducted with the selected
employees only from IBM GSDC (International Business
Machines - Global Service Delivery Center) located in Brno,
Czech Republic. The selected employees were based on the
following conditions: having knowledge and being familiar
with the matrix organization structure, as well having
experience more than 4 (four) years in such structure and being
part of different business area and/or background, such as the
following profession: Project Manager, Portfolio Manager,
Transition Transformation Manager, Project Coordinator,
Project Administrator, Team Leader, Contract Business Office
and Cost Manager.
The questions prepared were the type of SemiStructured Questionnaire and consisted of 10 (ten) questions
in total. The interview was conducted through face to face
method when available, or with the use of the following
application: Skype. Another application used during the
interview was Voice Recorder.
The target of the participants was 20 (twenty), but
because of the following phenomenon: Saturation of Data,
which means the information were almost the same and no
new information were given by participants till the number of
15 (fifteen), therefore the total number of participants in the
interview is 15 (fifteen).
Below the schedule of the interview can be found:

The Interview had two parts:

First Part contained questions about the Matrix Structure
Organization.
1. Do you understand what Matrix Structure
Organization is? How?
2. What are the advantages of Matrix Structure
Organization?

32

3. What are the disadvantages of Matrix Structure

Organization?
4. Line Manager and Functional Manager! How do you
see the importance, authority and co-operation of
these two lines in Matrix Structure Organization?
5. Having two bosses and dual reporting? Whats your
concern on this point?
Second part contained questions (except the last question)
about the projects in Matrix Structure Organization.
1. Who decides if the Project is going to be taken? Is the
Project Manager involved in this phase, or the project
is given after the decision has been made?
2. Resources! Who creates the team after the KICK OFF
is sent?
3. What is your opinion about Decision making? Is there
any procedure?
4. How the projects are run in Matrix Structure
Organization you are part of?
5. Do you like being part of this structure, or you would
like to rather change it?

33

4.2.1. Questions related to Matrix Structure

Organization
1. Do you understand what Matrix Structure Organization
is? How?
The experience of being part of Matrix Structure
Organization for couple years has given a great opportunity
and a chance to learn and having an understandable overview
for individuals, however not an expert. On the question of
understanding the structure 100% (out of 15 interviewees) has
answered with: Yes!
When it comes to the perspective of how the individuals
see and/or understand this structure, 80% (12 out of 15) of
interviewees answered that: this structure means having two
lines of managing: functional line from one side and
projectized line from the other side, and the rest 20% (3 out
of 15) of interviewees consider this structure as resource
sharing flexibility.
2. What are the advantages of Matrix Structure
Organization?
When this point was discussed during the interview with
the participants, there were few related facts mentioned by
them which consider as good-points of this structure when
implemented, nevertheless the first thing that was considered
as a very beneficial and highly crucial pointed out 60% (9 out
of 15) of the interviewees for the good of the business of the
company was the Utilization of resources.
Therefore, matrix structure is very flexible in terms of
sharing the resources among business units. This means that
this structure facilitates a single resource or more when
available to have the opportunity to be shared among the teams
for a certain business reasons and if needed to be partially
assigned to several projects running in the same time.
This opportunity in some point eliminates the need of
hiring new individuals for short-term for a particular project
and also brings several benefits for companies who are

34

applying this organizational structure, especially for

individuals in terms of: learning by sharing practices and
experience, professional development by exchanging
information, knowledge, advancing soft skills by
communication etc. Furthermore, the managers can create the
team by available resources for a particular project in a shorter
time, while this structure enables the resources to move
quickly when they are available so by that the work can start
immediately after the Kick Off of the project is being sent to
project manager, whereas if you consider hiring a new
individual, a manager will need to spend additional time and
effort such the following: doing the necessary administrative
paperwork, getting familiar with the environment, getting all
required accesses, having the so called transfer skills period,
passing the trial period and so on.
The procedure of assignment of the resources in the
project is a broad topic. It brings some good and bad points,
however the disadvantages of this will be subsequently
enlightened in detail.
Communication among the business units has been noted
by 40% (6 out of 15) of interviewees as another benefit which
Matrix Organization Structure brings to the business of the
organization who are implementing it, in this case IBM. The
participants consider this factor as quite beneficial for the
strategy of the company. Beside the fact that the teams can
learn from each other some tips and tricks by sharing
knowledge and experience, it also has an impact on avoiding
in the future any kind of conflicts which can damage the
companys business or can lead to the failure of another
project. To better understand the above instance of the
advantage a great example has been given by an interviewee
which can be found below:
V.L. (Transition and Transformation Manager): the
organizational units communicate to each other and thats a
great thing which this structure enables us. By this we can
avoid the mistake that Motorola did in past. They used to have

35

Projectized Structure and what happened is that they had

different units and each unit was working independently on
their work so they had wireless division which were working
for walkie talkies, CBA radios and there was a division that
was working on phones, etc. They worked as independent units
and never really spoke to each other and what happened in the
end is that they started to making products internally so the
phone unit actually made a cell phone that was also walkie
talky somehow and they crashed the business of the wireless
units, since they developed a product which was easier to use
and more functional.
Below is given a picture (nr: 10) regarding the statistics
of the answers given by the interviewees for the current
question:
Advantages of Matrix Structure Organization

60% Utilization of
resources
40% Communication

Picture 10: Advantages of Matrix Structure Organization

Tool Used: MS Office 2010

3. What are the disadvantages of Matrix Structure

Organization?
Throughout the discussion of this question with the
participants regarding the disadvantages of the structure, they
expressed their concerns they have experienced during their
work experience. However, one of the given answers which

36

can be found below is considered to be quite interesting and

significant:
D.C. (Project Manager):With Matrix Organization you have
more details which is good, you know exactly who is doing
what and who is responsible for what, but that creates a
biggest problem, because you have the limitation: this is my
job I dont do that, talk to the other guy; the other guy says: I
am doing 30% but the third guy is doing the rest of it therefore
talk to him, and sometimes is never ending
By given the mentioned standpoint by D.C., it is clearly
understandable that matrix structure organization contains
quite lot employees, which means too many resources
involved. This can cause difficulties such as: trying to find
certain information; making any kind of decision might be
challenging since the responsibility are shared; slow feedback
response, etc.
Another fact obtained from the mentioned answer by
interviewee is that this structure is very well structured,
organized and contains supplementary details of who is doing
what. This is very efficient especially for any newcomer in
such company since he/she can easier find any information
required or even desired. However, as pointed by the D.C.
having such well structured structure, brings a limitation to
employees. They might not take a decision in case they are not
fully committed and if they dont have full responsibility. In
this instance, it can lead to the fact that resources might
concentrate more on their own responsibility instead of
working as a team. They might fully concentrate on their own
duty and what have to deliver and not to see it as a whole
project.
This means that each one of the resource can have
his/her own understanding and perspective to the request
which they receive from the customer. Therefore, my
suggestion in this instance is that the project manager is the
one who should be more active and lead the team as unique.

37

Moreover, he/she should pay attention and be careful when

explaining the project, what is written in the contract and
should ensure avoiding any kind of misunderstanding or
confusion.
Limitation as briefly mentioned previously was
pointed out 46% (7 out of 15) of interviewees as another
disadvantage of the structure. Having very well structured
organization does not allow employees to do work above the
boundaries of their responsibilities because in this case they
will take someone elses duty. Unfortunately in some
occasions this can have a negative impact. A simple
illustration is given bellow to better understand the fact
specified above. The instance is not related to the business of
IBM, but is a simple explanation on what means to have
limitation to work, the risk and impact: Imagining having
situation when there is a fire on the next door and a person
recognizing situation is not responsible for calling the
Firefighters. While looking for the right person to make a call
the flame is rising continuously and so does the damages.
After the person who is responsible for making a call arrives
and makes a call, and while waiting for the Firefighters to
come to the place still flame and damages are rising, and the
ones who are waiting are not allowed to make any kind of
endeavor to stop the flame and avoid the further damages.
Two bosses and reporting was mentioned 86% (13 out
of 15) by interviewees. However this concern is part of the
question nr: 5 (five) and will be explained in detail in the
following part of the thesis.
No Continuity, the team changes a lot is a further
concern given by another Project Manager B.B. What does he
means by that? The fact is that in Matrix Structure
Organization when a project is done, the project manager is
assigned to another project and this does not mean that he/she
will work with the same team that he/she had before. The new
available resources will be assigned to the current project. This
however could be a negative thing since the team members

38

will need time and additional effort to better know each other
and build the effective relationship. Also the project manager
can invest in any resource more, but in the future he/she might
not have the opportunity to have the desired resources for
some time. In some cases people may like it since it is more
dynamic, flexible and active experience but in the other side
people try to be more stabile and the Matrix Structure
Organization does not allow such a thing. However
considering the business it might be more effective having a
stabile one. Considering the opposite perspective, not just
changing the resource, but sometimes there are instances
where a project manager changes suddenly. The interviewees
pointed out the anxiety of this instance since the new manager
brings new priorities and changes within the team and in this
situation the resources should be flexible to adapting to a new
system. The resources are not satisfied to experience this
kind of changes in their work. One of the given answers by the
interviewee can be found below:
S.V. (Contract Business Office): I am here for long time,
almost 6 years, and through this time I had 5 Functional
Managers and 4 People (Line) Managers, and each time I had
to adjust to their way of working and each time I had to report
each way the information they wanted from me and I find this
difficult and also frustrating
Assignment of the Resource was mentioned as another
anxiety from 60% (9 out of 15) of interviewees. Even though
they consider the flexibility of the assignment and sharing of
resource as one of the best advantages of the Matrix Structure
Organization, however in practice it brings to them some
headache. The fact is that it does not allow the project
managers to have the resources they want but the ones that are
available in a pool. Sometimes the available ones may not be
in the level of experience, skill and knowledge required
therefore in some cases they go through some additional
training or special education. However most likely what is
happening is that the leaders consider the priority and

39

importance of the projects and based on this they assign the

resources they have in the pool.
Virtual Teams has been mentioned from 46% (7 out of
15) interviewees as disadvantage. Usually, Matrix Structure
Organization is applied and implemented in huge companies,
because it requires a large number of resources. Analyzing the
companies that have this structure in their business usually are
the big ones and they have centers in different places of the
world, so does IBM. The service delivery center is centralized
in different places and sometimes the available resources
might be in different centers. What is happening in the
delivery center of IBM in Brno is that sometimes resources
might be in a different geography and this brings advantages
and disadvantages as well.
The advantage is that there is a solution in place if the
resource is available in another place and there might not be a
need of hiring a new member or taking external resource.
Nevertheless bringing the resource to one center costs
additional expenses and time, so thats another disadvantages.
If there is no additional cost than the resources perform
virtually and this brings several pain point, for instance the
differentiation of time zone (GMT) or it can lead to slow
feedback response etc.
What IBM does to enable the team to be more effective
is that in this case of virtual team the project manager
organizes the Kick Off meetings face to face, which means
brings the resources to the best center based on the location
they are and organizes the first meetings together, so by that
the team members have the opportunity to better now each
other, and together they create the communication matrix that
they are going to follow.
Below is given a picture (nr: 11) regarding the statistics
of the answers given by the interviewees for the current
question:

40

Disadvantages of Matrix Structure

Organization
86% Two Bosses

60% Assignment of
Resources
46% Virtual Teams
7% No continuity
7% Limitation

Picture 11: Disadvantages of Matrix Structure Organization

Tool Used: MS Office 2010

4. Line Manager and Functional Manager! How do you

see the importance, authority and co-operation of
these two lines in Matrix Structure Organization?
In Matrix Organization Structure, functional manager
and line manager are the main actors, since they represent the
streaming of managing two directions of the organization. To
understand the importance of two them, the responsibilities
should be known by employees who are part of it. It was the
same case with the participants. However, they had a clear
view and understanding of the activities that they perform
within the organizations they are.
67% (10 of 15) of interviewees have given the same
name to line manager. They consider him as capacity manager,
the one who is responsible to see if they have enough capacity
for the line he/she is supporting and to ensure that they have
the required capacity to perform the work.
From the answers of the participants are obtained the
following responsibilities in real practice of the Line Manager
who is part of the Matrix Structure Organization: the one who
is responsible for resources and as mentioned ensuring the

41

capacity for the projects; 73% (11 out of 15) of the

interviewees believe he/she is responsible for the salary
payment of the employees and as well responsible in terms of
the one having high an impact on confirming the promotion for
the employees for higher salary; position as for the salary, also
the one having impact of confirming the promotion for
employees in term of getting to a higher position within the
company; responsible for performing paper work and
administrative activities; another vital duty is the improvement
and development of the employees by ensuring and offering
trainings, mentoring and different kind of education; checking
claiming of hours and over times, as well as the holidays of the
employees is another activity expected to perform from the
line manager, etc.
53% (8 out of 15) of interviewees have called the
Functional Manager with the following name: Business
Manager, considering that he is the one who directing the
business of the company.
From the answers of the participants are obtained the
following responsibilities in real practice of the functional
manager who is part of the Matrix Structure Organization:
responsible for the business and the functions; the one who is
giving the work to the employees and organizing what should
they be doing and what are excepted to perform and deliver
from them; another perspective explained is that Functional
Manager is the one who is using the resources in a best way to
get a certain job done; responsible for giving business
directions to the resources and planning what is next;
responsible to help and facilitate certain issues in case the
resources are experiencing anything which prevents their work
and activity; responsible to find out together with the
employees their weak points and giving directions to them
how to develop and/or improve, etc.
On the discussion of the importance, expectedly all of
the participants estimate the two of managers with high
significance, since clearly they are the ones who are managing

42

from one side the people and from the other side managing the
business. However, regarding the authority the participants
could not distinguish between them and as a conclusion it
came to a point that the authority is shared. From this
illustration it is understood that the Matrix Structure which is
applied in IBM is balanced.
Regarding the cooperation of the functional and line
manager, 93% (14 out of 15) of the interviewees have
answered that even they have different interest, in some point
they cooperate in terms of the business and the good of the
company and they consider it as very crucial for business
beneficial and good atmosphere within the team. On the other
side 7% of the interviewees which in this case only one (1) out
of 15 (fifteen) of the interviewees which was Cost Manager
(S.W.) answered that from her own experience they dont
cooperate as expected and they only concentrate on the scope
of their work. S.W. believes that sometimes the cooperation
depends on the people; however she thinks that they should
cooperate.
Below are given pictures (nr: 12 and nr: 13) regarding
the statistics of the answers given by the interviewees for the
current question:

43

Perspective

Cooperation

67%
Capacity
Manager

53%
Business
Manager

93% Yes

7% No

Picture nr: 12 and nr: 13: Perspective and Cooperation of

Functional Manager and Line Manager
Tool Used: MS Office 2010

5. Having two bosses and dual reporting? Whats your

concern on this point?
As mentioned in the second question having two bosses
and dual report has been pointed out by 86% of the
participants of the interview and it is seen as a crucial point for
them. In Matrix Structure Organization individuals have two
bosses and this means that necessarily it is required from them
to report twice and this means a dual report and/or dual effort.
Theoretically is said that it might cause confusion to whom
what exactly to report or from whom what to expect. However
in IBM this confusion has been solved by having the
Document of Understanding or by building the Matrix
Communication. In these documents are clearly described the
roles and responsibilities, scope of the work has been clarified,
to whom what should be reported has been written and the
managers know from the resources what to expect. Everything
in the beginning is agreed, planned and understood between
the resource and the manager, therefore there shouldnt be any
problem, issue or confusion, and in case there are, they should

44

go back to the agreement and clarify the situation based on the

agreement.
However, the concern was not the confusion of the
report, but having two bosses. It means that each boss, in this
case Line Manager and Functional Manager, have their own
priorities which might be different, so the resource is in the
middle and needs to satisfy them both, meaning satisfying two
different requirements. Sometimes resources cannot fully
satisfy them, when the priority of one manager can be lower
than the priority of the other manager.
Unexpectedly, on the additional question: Who do you
consider as more important: Line Manager or Functional
Manager? 93.3% of (14 out of 15) participants consider the
Line Manager as more important since they believe that they
are the ones who can have an impact on the assigning to a
higher position or for higher a salary etc, and 1 (one) of them
consider the Functional Manager as more important. She
answered with the following answer:
R.D. (Cost Manager): I see my Functional Manager as my
boss and I am more in contact with him for the work therefore
I learn a lot from him and that is the reason why I consider
him as more important.

45

4.2.2. Questions regarding the projects in Matrix

Structure Organization
1. Who decides if the Project is going to be taken? Is the
Project Manager involved in this phase, or the project
is given after the decision has been made?
On the discussion of this question 26.5% (4 out of 15) of
interviewees didnt know the answer who decides if the project
is going to be accepted or not, while the rest had an opinion on
it. 47% (7 out of 15) of interviewees answered that there is a so
called: Steering Department responsible for decision of taking
new projects and 26.5% (4 out of 15) of interviewees answered
that Functional Managers is the one who is responsible to
decide if the project is going to be accepted.
The differentiation of the answers regarding the question
by 11 interviewees is the perspective how they see the
projects. The fact is that in the business of IBM who are
applying the Matrix Structure, there are some small requests
received from a client which are treated as projects and are
called RFS (Request for Service), and in this case the
functional manager which can be Portfolio Manager, is in
contact with the customer and makes a decision the of the
nature of the request. Therefore he/she decides if the request is
going to be taken and afterwards he/she assigns the RFS to the
right available project manager he/she has and sends the Kick
Off. On the other side, in case there are bigger/complex
projects or new customer coming to a business than its the
instance where Steering Department takes place. In this
situation the negotiation or it can even be called as well
Initiation Phase, is being performed by people who are
responsible for it. Based on given information Steering
Department is a board with some experienced, skilled and well
knowledge employees who are able to perform professional
and as well high level of negotiation with the client.
On the additional question whether the project manager
is involved from the beginning, Negotiation/Initiation phase,
the interviewees had the same answer, that it depends on the
instance, but however in general cases they are not part of it.

46

The project is being approved and then Kick Off is sent to

them.
Nevertheless, my suggestion in such instance would be
that the project manager should be part of a negotiation phase,
or to know what is likely to happen, or at least they should be
informed in advance. Imagining the situation of not being part
at all and receiving the Kick Off might require additional time
to understand the contract and what is written. If he/she does
not understand something then needs to go back to portfolio
manager to ask and so on. Sometimes the biggest problem is
that the project manager understands what is written but does
not fully understand what to deliver in the end and requires
clarification. The main aim of the mentioned point is that
sometimes the project manager would need additional time
before he/she starts with the work because of not being
involved from the beginning.
Below is given a picture (nr: 14) regarding the statistics
of the answers given by the interviewees for the current
question:
Who decides if the Project is going to be taken

26.5% Don't know

47% Steering
Department
26.5% Functional
Manager

Picture nr: 14: Who decides if the Project is going to be taken

Tool Used: MS Office 2010

47

2. Resources! Who creates the team after the Kick Off is

sent?
The creation of a team is considered to be highly crucial
since the members are the ones that will drive the project with
their performance. For that reason the current question is part
of the interview to find out how it works in an environment
with Matrix Structure Organization.
Participants have answered that after the Kick Off is
sent, it is the responsibility of project managers to create the
team. In fact the portfolio manager selects the project manager
and then is the activity when he/she is assigned. This activity is
going through an official procedure which is called: Resource
Deployment Request (RDR). In this process the project
manager provides information about the resource needed. The
request contains a clear requirement of what type of resource is
needed, the level of knowledge, skills, experience, and how
many are required. Also there is additional information on this
request which is the band of the employee. The band is a
number, actually seen as a coefficient of the employee which
is obtained based on the experience and knowledge the
employee posses. The number of the band reflects the quality
of the employee i.e. the higher the band the more qualified the
employee is. This request is raised to organizational line. It
needs to get approved by several levels and then it goes to
delivery organization. Afterward they check the request and
provide the information to project manager about the
candidates they contain. After receiving the information he/she
checks the candidates. In some instances interviews are
organized and the candidates are selected. However, the
explained procedure is more likely about the resources that are
available, and this is the ideal situation. In real practice it is
more challenging.
The fact is that there is never enough resources for
everything that it is needed to be delivered. What occurs is
Prioritization. The company prioritizes the most significant
and most beneficial projects. One of the answers given by the
interviewee enlightens this:

48

V.C. (Project Manager): we cannot do everything since the

resources are limited and have to be dedicated to the most
important activities in company. There might be times when
the projects that are going needs to be stopped, or postponed
or even not executed and somebody obviously will not be
happy about it.
Therefore, as explained by the interviewee that there
might be instances when ongoing project might be stopped or
postponed, the resources that were assigned will subsequently
change the assignment and they will be part of another team,
fully or partly assigned, it depends on the situation. This is
sharing of resources and flexibility of the resource utilization
that Matrix Structure Organization enables to the company. A
different perspective has been given by one of the interviewee
for the explained instance:
D.C. (Project Manager): Team creation to me is like playing
chess. We assign a resource 0.2 FTE to one project and 0.8
FTE to another project, than one employee can be even part of
three projects, and rarely are cases when a resource is part of
a single project for 1.0 FTE
Mentioned FTE by interviewee means Full Time
Equivalent. It describes how much a resource is assigned to a
particular project. 1.0 FTE means a resource is fully assigned,
40 hours per week, or it might be assigned to two different
projects which mean 0.5 FTE for each one which is 20 hours
per week, and so on.
3. What is your opinion about Decision making? Is there
any procedure?
The question prepared for the participants regarding the
Decision making process was found broad and for that reason
it has been divided in two parts: 3.1. Decision making related
to changes in ongoing projects and 3.2. Decision making
regarding assigning of selected resource.

49

3.1.
Decision making related to changes in
ongoing projects: 73% (11 out of 15) of the interviewees have
answered that there is a process which is called: Change
Management Process, which is related to changes in ongoing
projects, and the rest of 27% (4 out of 15) of the interviewees
didnt know about the current concern, since they havent
experienced such a thing.
Based on the information given from 73% of the
participants, Change Management Process is one of the main
parts of the Project Plan made by project managers in the
beginning of the project and is considered as the board of
people who decides for changes. In this process, project
manager identifies a board which contains individuals who are
having a significant impact directly and indirectly on the
project. These individuals are depending on the project, but in
general there are limited numbers of people. The minimum can
be 2 (two), the project manager and the stakeholder, the
maximum is not identified since it depends on the project,
however it is recommended not to contain so many since the
decision taking can be more complex. In some instances even
employees can be part of the board and these employees could
be: TSM (Technical Solution Manager), or Lead IT Architect
etc, who are there to describe specific technical problem and/or
difficulty in a situation when a change is about to get
approved/confirmed. In general the changes depend on the part
of the business which is affecting, the kind of deliverable and
the impact the change will take, however the project manager
is the one who identifies the change and refers to the board
who is giving the final approval. After the change is made than
the sponsor is being informed by the project manager.
Mentioned sponsor might have very broad understanding
therefore followingly an instance is given for better
understanding: in case there is a project for developing a
product such as: laptop or self-phone, than a sponsor could be
the end user of the mentioned product.
There might also be some other cases for a decision
making process made by a board who is responsible for a

50

certain project and project manager might not be part of it, for
instance: a board can delegate certain type of decision to
project manager, if the budget is limited for some time and the
project manager should reduce the cost of the project for the
given period.
3.2. Decision making regarding assigning of selected
resource: 73% (11 out of 15) of the interviewees also took part
on discussion of this question, since the rest were not informed
and had no experience with this processes.
The biggest concern regarding this kind of decision
mentioned by them is Bureaucracy. They pointed out that
there are too many people involved on the Organizational
Line. It was expected to have too many people involved in
such decision procedures since as described in a previous
chapter it is one of the disadvantages in Matrix Structure
Organization.
Based on the information given by the 73% of the
interviewees, having too many people involved means that a
request has to go through some levels to get the final approval
for the specific resource which is required for a specific
project, and therefore it lost the significance. An answer is
cited by the participants and can be found below to better
understand the concern experienced by the employee who is
part of Matrix Structure:
V.C. (Project Manager): In this cases I need to explain one
thing to one person, and then to another person, and then to
another person, and the urgency is getting lost, and the
resource I want to have becomes a number in excel sheet
waiting to get approved.
Below is given a picture (nr: 15) regarding the statistics
of the answers given by the interviewees for the current
question:

51

Decision making procedure

73% Know the

procedures

27% Don't know

Picture nr: 15: Decision making procedure

Tool Used: MS Office 2010

4. How the projects are run in Matrix Structure

Organization you are part of?
When this question was discussed, expectedly has been
confirmed by a majority of the interviewees that in real
practice of an organization who is applying Matrix Structure,
in this instance in IBM, Project Life Cycle is fully followed.
The results are:
87% (13 out of 15) of interviewees have confirmed
that projects are run through the whole Project Life Cycle. One
of the given answers can be found below:
V.L. (Transition Transformation Manager): Yes, it is true, it is
happening in real life. We are probably a poster child of
Project Management phases, and we really go through these
phases and there is enough time and energy spent on each
phase. However, we might have different terminology but the
concept is the same.
13% (2 out of 15) of interviewees answered that
projects partially follow it.

52

The slight difference on the terms of not applying the

full life cycle is because of the amount of the project itself,
therefore the big and longer projects apply it and in the other
side the small projects, actually the mentioned RFSs (Request
for Service) do not fully apply the lifecycle. On these small
projects, only three phases are active, and those are: Initiating,
Executing and Closure. Actually, is not that the phases are
followed, but the work of these phases is being performed
somehow in a very short approach, such as:
Initiating - the client raises the request to portfolio
manager. After he/she receives the request analysis the request
if it is has been raised properly based on the agreement which
in case of server storage for a particular machine might be:
kind of server requested, amount of storage requested etc.
Afterwards he/she assigns it to the available resource and
sends the Kick Off.
Executing: After the PM receives the request, he/she
discusses it with the technical team in case Downtime is
needed. Downtime means turning off the machine for a
particular time on order to prevent any crash of it. In case it is
needed than the client confirms the day and time when the
machine will be turned off, it might be after business hour or
during the weekend. In case it is not needed than the team
updates the storage of the server and informs the project
manager.
Closure: In this phase, project manager informs the
client for the change and after the client checks the update
sends a closure note to him/her for closure confirmation.
Usually the amount of the time which takes for these
small projects is estimated to be completed usually from 2
(two) to 4 (four) working days, however in case there is
downtime necessarily needed than it might take more than 1
(one) week, it depends on two factors: first, the response of the
client for the approval and second, the day and time which is
appropriate for the client.

53

Another proof which ensures that the projects are run

through the Project Life Cycle in IBM is the so called: World
Wide Project Management Methodology. This methodology
has been developed and applied for easier managing of the
projects and having a reference in case there is a concern or
uncertainty.
Below is given a picture (nr: 16) regarding the statistics
of the answers given by the interviewees for the current
question:
How projects are run in Matrix Structure
Organization

87% Follow the Project

Life Cycle
13% Partially follow
Project Life Cycle

Picture nr: 16: How projects are run in Matrix Structure

Organization
Tool Used: MS Office 2010

5. Do you like being part of this structure, or would you

like to rather change it?
This was the last question of the interview prepared for
the interviewees regarding the Matrix Structure Organization.
The participants have given their own thoughts regarding the
satisfaction of having this structure in their work. However,
not all of the selected employees think in the same way and not
all of them find this structure as the perfect one for the work
they do. The results are:

54

 47% (7 out of 15) of interviewees answered that they

are satisfied with this structure. They believe that for this type
of the company and the work they are performing, this
structure fits the best and facilitates their work in a better way
comparing to other organizational structures. One of the given
answers can be found below:
S.M. (Team Leader): I am almost fully satisfied with this
structure and I cannot imagine having another one for this
business. I believe is specifically for project environment with
IT business and especially with this capacity of people working
here its much better than using the linear organizational
structure.
33% (5 out of 15) of interviewees answered that they
are partially satisfied with Matrix Structure Organization. Even
though this structure can provide a secure business nowadays,
some of the employees (33% of the interviewed) who are part
of it believe that it should be actually mixed somehow with
Functional Structure. Followingly can be found one of the
answers which have been selected:
F.V. (Project Coordinator): I find this structure as a good
one, but I would like to mix the matrix and functional in some
way. We need organization which is practically combination of
those two, something in between, something that will not
dictate the people what should do and will not isolate them,
but will motivate them to think with their own head, to get out
of the organizational structure.
20% (3 out of 15) of the interviewees have given their
concern regarding the satisfaction towards this structure. Even
though this structure has been good taught, thought,
implemented and applied, they have expressed that they are
not fully satisfied with what it offers to them. Actually the 3
(three) of them are project managers, and they would like to
have the opportunity to combine this one with Projectized
Structure. Below has been cited one of the answers given by
participants:

55

B.B. (Project Manager): If I had the opportunity, I would try

to combine or at least to enable the possibility to mix this with
Projectized structure. Not for all projects, but for the bigger
and longer projects to have projectized team, which will work
and be fully committed to what they are assigned, and not to
change it.
Below is given a picture (nr: 17) regarding the statistics
of the answers given by the interviewees for the current
question:
Do you like being part of Matrix Structure
Organization
47% Yes
33% Partially, to mix with
Functional Structure
20% Partially, to mix with
Projectized Structure
Picture nr: 17: Do you like being part of Matrix Structure
Organization
Tool Used: MS Office 2010

56

5. Conclusion
Matrix Structure represents one of the methods the
certain organizations are using for running the business and
managing the work. It has been created with the combination
of the advantages and good points of Product Structure and
Functional Structure in order to create a unique one which will
serve to rapid change of nowadays dynamic and growing
business demands.
Based on the research and examples of the companies
implementing this structure such as: IBM, Citibank, General
Electric, ABB, Shell Oil and many more, it is understood that
nowadays the companies having Matrix Structure applied in
their business are the large well known companies. The
explanation is that for this structure it is required to have a
large amount of people, therefore it cannot be applied to small
companies.
Implementing this variety enables and facilitates the
organization to exceed and excel in particular for product
focus since the functional managers are directly responsible
for; and functional support whereas the line managers are
continuously performing dedicated support towards the
functional line. The cited feature emphasizes that Matrix
Structure is seen as an excellent solution for great companies
since in comparison with others, it fulfills the gap of
Projectized Structure while it enables the functional support
and vise versa.
Although it brings additional benefits, where the
following mentioned facts are the key points: flexibility in
terms of resource utilization and efficient exchange of
information, knowledge and experience since the departments
work closely and they communicate with each other. This
leads to effective team work, efficient improvement of quality
of the work and development of employees.
Having two different managerial lines and chains of
commands makes this structure unique and exceptional
therefore this is considered to be the biggest challenge. There
might be three different perspective of the mentioned factor:
taking into account the view seen from the structure it is

57

estimated to be highly crucial and has an impact of better

coordination, since the managers put their effort, attention and
energy on a specific activity which they are responsible;
analyzing the viewpoint from the managers standpoint we see
a collision of interests and objectives because the line
managers have a long-term target and strategy whereas the
functional managers focus on short-term vision; and lastly
considering the point of view of the resources having two
bosses means twofold in terms of reporting which causes dual
effort
and satisfying two
different
requirements
simultaneously. This is one of the biggest concerns which the
resources are experiencing and it brings discontentment for
them.
Another piece of information obtained, particularly from
the interview is that people working in this structure especially
in IBM are having quite dynamic and very intensive work
because of the flexibility.

58

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