Differentiating Functional, Matrix, and Projectized Organizational Structures

Each organization approaches the relationship between operations and projects differently. The PMBOK defines three main organizational structures that affect many aspects of a project, including

• The project manager's authority

• Resource availability

• Control of the project budget

• The project manager and administrative staff roles

Functional Organizational Structure

A functional organization structure is a classical hierarchy in which each employee has a single superior. Employees are then organized by specialty and work accomplished is generally specific to that specialty. Communication with other groups generally occurs by passing information requests up the hierarchy and over to the desired group or manager. Of all the organizational structures, this one tends to be the most difficult for the project manager. The project manager lacks the authority to assign resources and must acquire people and other resources from multiple functional managers. In many cases, the project's priority is viewed lower than operations by the functional manager. In these organizations, it is more common for the project manager to appeal to the senior management to resolve resource issues.

Matrix Organizational Structure

A matrix organization is a blended organizational structure. Although a functional hierarchy is still in place, the project manager is recognized as a valuable position and is given more authority to manage the project and assign resources. Matrix organizations can be further divided into weak, balanced, and strong matrix organizations. The difference between the three is the level of authority given to the project manager (PM). A weak matrix gives more authority to the functional manager (FM), whereas the strong matrix gives more power to the PM. As the name suggests, the balanced matrix balances power between the FM and the PM.

Projectized Organizational Structure

In a projectized organization, there is no defined hierarchy. Resources are brought together specifically for the purpose of a project. The necessary resources are acquired for the project, and the people assigned to the project work only for the PM for the duration of the project. At the end of each project, resources are either reassigned to another project or returned to a resource pool.

There are many subtle differences between each type of structure. Table 1.3 compares the various organizational structures.

Table 1.3. Organizational Structures

	Functional	Weak Matrix	Balanced Matrix	Strong Matrix	Projectized
Description	Traditional organization with a direct supervisor.	The PM and FM share responsibility, with the FM having more authority.	The PM and FM share responsibility, with each having equal authority.	The PM and FM share responsibility, with the PM having more authority.	Projects do not exist under functional departments. The PM has sole management authority.
Authority of project manager	Very low.	Low.	Low to medium.	Medium to high.	High.
Resource availability	Very low.	Low.	Low to medium.	Medium to high.	High.
Project manager involvement	Part-time.	Part-time.	Full-time.	Full-time.	Full-time.
Staff involvement	Part-time.	Part-time.	Part-time.	Full-time.	Full-time.
Advantages	The FM holds accountability for the project.	The PM gets some authority to manage the project.	The PM and FM share the responsibility of the project.	The PM gets more authority to assign resources and manage the project.	The PM has full authority to staff and manage the project.
Disadvantages	The PM holds little or no authority.	The FM can see the PM as a threat and cause conflict.	The PM and FM can be confused about who manages what.	The FM may feel out of the loop.	The PM holds accountability for the project.