Functional vs. Projectized vs. Matrix Organization Structures

This article compares functional, projectized, and matrix organizational structures, highlighting the distinctions between these types. You’ll also find links to other useful comparisons.

Functional Organization

The functional organization structure is characterized by:

• A clear hierarchy where each employee reports to a single superior.
• Staff members are grouped based on their specialization, such as production, marketing, engineering, or accounting.
• While functional organizations undertake projects, the scope of these projects is typically limited to the boundaries of the function.
• Communication during inter-departmental projects flows through the department heads.
• The functional manager controls the project budget.

Projectized Organization

The projectized organization structure is characterized by:

• Project team members are often co-located and report to a project manager or provide support services to various groups.
• Project managers have significant independence and authority.
• The project manager has complete authority, controls the project budget, and has a full-time administrative staff.

Matrix Organization

There are four basic types of matrix organizations: weak matrix, balanced matrix, strong matrix, and composite matrix.

Weak Matrix Organization

• Maintains many characteristics of a functional organization.
• The project manager’s role is more of a coordinator or expeditor than a true manager.

Balanced Matrix Organization

• Recognizes the need for a project manager.
• The project manager does not have full authority over the project or its funding.

Strong Matrix Organization

• Maintains many characteristics of a projectized organization.
• Project managers have considerable authority and a full-time project administrative staff.

Composite Matrix Organization

• A functional organization may create a special project team to handle a critical project.
• The team may include full-time staff from different functional departments.
• May develop its own set of operating procedures.
• Maintains many characteristics of a projectized organization.

Project Manager Authority and Role Comparison

The following table summarizes how organizational structure influences the role, responsibilities, and authority of the project manager within an organization.

| Project characteristics | Organizational structure | | | | :------------------------------------- | :----------------------- | :----------------- | :-------------- | ---------------- | -------------------- | | | Functional | Matrix | Projectized | | | | Weak | Balanced | Strong | | | Project manager’s authority | Little or none | Limited | Low or moderate | Moderate to High | High to almost total | | Resource availability | Little or none | Limited | Low or moderate | Moderate to High | High to almost total | | Who controls the project budget | Functional manager | Functional manager | Mixed | Project manager | Project manager | | Project manager’s role | Part time | Part Time | Part Time | Full time | Full time | | Project manager’s administrative staff | Part time | Part Time | Part Time | Full time | Full time |