Three primary structures have become the foundation for how an organization is run: functional; projectized; and matrix. Each structure has advantages, and if used correctly and in the right environment, the structure can further the completion of projects. Each structure also has disadvantages, but as long as it is understood and good communication exists, the structure can still work well.
A functional organization is the most common type of the three. It works best in small organizations in which the different sections are geographically close together and which provide only a small number of goods and/or services. In a functional structure, the organization is broken into different sections based upon specialty. For example, there may be one area for sales, one for customer service and one for the supervisors who deal with escalated problems. The project manager’s role is to ensure smooth execution of processes and projects; however, the functional manager has the most power and makes the final decisions.
Advantages and Disadvantages of a Functional Structure
An advantage to the functional structure is the role of the functional manager, which means there's only one boss. This reduces or prevents conflicts of interest and makes it easier to manage specialists. A disadvantage of this type of structure is that the project manager has limited authority and a limited career path.
In a projectized structure, all the work is looked at as a project. The project manager has complete control, unlike in the functional structure, and all team members report directly to the project manager. Sometimes these team members are permanent, and sometimes they are hired as temporary workers to help with the project until its completion. If the organization takes on a large project, it will have all the necessary resources available to sustain the project and will act as a small, self-contained company.
Advantages and Disadvantages of a Projectized Structure
Advantages to the projectized structure include the project manager's opportunity for career progression. In addition, because good communication exists within the project work, the team members tend to be more committed to, and excel in, their responsibilities. The disadvantage of a projectized structure is that, because the team breaks up and disperses after the completion of the project, there are no long-term goals or sense of job security for the rest of the workers. Another disadvantage is that the organization has to essentially clone the same resources for each project (project manager, work area, administrator).
The matrix structure combines both the functional and projectized structures. Each team member has two bosses; they report both to the functional manager and the project manager. If the matrix is strong, the power resides more with the project manager. If the matrix is weak, the power resides more with the functional manager. The key is to find a balance in which the power is shared equally. Because of its complexity, this type of structure can lead to problems if it is not used carefully and properly. Good communication is essential for success.
Advantages and Disadvantages of Matrix Structure
An advantage to the matrix structure lies in the efficient use of resources because of ease of access. This structure also demonstrates efficient communication both vertically and horizontally. Because of this, once the projects have ended, the team members are likely to receive a job elsewhere in the organization. A disadvantage of the matrix structure is complexity, which can be difficult to manage. For example, if the functional manager and the project manager do not communicate well, the team members can be caught in the middle, causing confusion.