What is the difference between functional structure matrix structure and Projectized structure?

Matrix vs Functional Organization

Matrix structure is a type of organizational structure where employees are grouped concurrently by two different operational dimensions.Functional structure divides the organization based on specialized functional areas such as production, marketing, and sales for the purpose of management.

Complexity

Matrix structure is complex in nature due to the combination of two organizational structures Functional structure is simple and convenient to manage.

Appropriateness

Matrix structure is appropriate for companies that have multiple product categories and carries out various projects Functional structure is suitable for organizations that operate in a single location with a single product category.

Summary – Matrix vs Functional Structure

The difference between matrix structure and functional structure mainly depends on the way they are structured and managed. For organizations that are significant in scale with many product groups, a matrix structure is ideal for management purpose.

If the organization is small or medium scale and has less diverse operations, then adopting a functional structure is appropriate. Proper chain of command and effective allocation of resources lead to higher employee motivation and cost savings. Thus the selection of organization structure should be made with care

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Your approach to project management may vary based on the type of organization that you are working within. Organizations may be structured in a traditional or functional manner or a projectized structure.

Depending on the organizational structure, your project management authority and availability of resources will vary.

Functional Organizations

A functional organization is a traditional structure where the organization is divided based on the functions performed by that particular group of people, such as Human Resources, Information Technology, Marketing, Service, etc.

The resource assigned as the “project manager” is usually a team member within a functional area and does not have the title of project manager. The functional manager will control the budget and the “project manager” will act more as a coordinator or expediter of project activities rather than having true project management responsibilities.

Resources for the project will need to be negotiated for with the functional managers and the accessibility of those resources will be based on business conditions. Any type of escalations of issues would need to be made to the functional manager.

Because the “project manager” has little to no authority, the project can take longer to complete than in other organizational structures and there is generally no recognized project management methodology or best practices. However, the depth of subject matter knowledge is much greater because the resources that will contribute to the project reside within the functional areas.

Projectized Organizations

In projectized organizations, the majority of the organization’s resources are involved in project work and the project work is generally completed for the benefit of an external customer. The project manager has increased independence and authority and is a full-time member of a project organization and has project resources available to them, such as project coordinators, project schedulers, business analysts, and plan administrators.
The project manager has authority and control of the budget and any escalation of issues would be made to the sponsor and potentially the PMO leadership. Given that the project resources report into the project manager versus the functional area, there may be a decrease in the subject matter expertise of the team members.

Example

Arizona Construction Company is a projectized organization: the majority of their resources are allocated against delivering projects for external customers, although they do have a few back-office workers who process the timecards, issue payroll, etc. Each foreman is a project manager and has authority over the project resources assigned to him or her.

AAJ Grocery is a functional organization: the company’s resources are structured by the function that they perform: front-end, bookkeeping, stock rotation, grocery, personal care and pharmacy, dairy, meat, etc. There is not a defined “project” organization nor are there defined “project managers”.

Summary

The organizational structure will dictate the level of power, authority, and resources available to a project manager. A traditional functional organization gives the project manager very little, if any, authority, whereas a projectized organization will provide the project manager with significant authority.

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