Three types of organization structure

Functional Organization is an organization structure in which people are grouped on the basis of specialization/function and the Project Manager has limited authority to assign work and apply resources.

Has a hierarchy with Presidents and VP. Functional Manager makes most project decisions.

Advantages
• Unity of command—only one “boss” is giving instructions
• Workers learn from each other and keep skills sharp
• Continue to report to the same Functional Manager
• Share resources among multiple small projects

Disadvantages
• Slow communications across multiple functions
• Technical difficulty in incorporating input from other disciplines
• Long communication channels make for slow decision making and slow response to change

Projectized organization is defined as a structure wherein employees, collocated or not, are grouped by activities on a project and the project manager may have complete, or very close to complete, power over the project team.

Presidents and PM. Project manager makes most project decisions,

Advantages
• Traditional department barriers are reduced
• Unity of command
• Communication response times are fast
• Co-location—team members are physically close
Disadvantages
• Cost of assigning members to one part-time project
• Teamwork methods may differ from those of the organization
• Teams may fail to communicate lessons learned
• Discipline-specific competence may suffer

Matrix Organization is an organization in which the Project Manager or project lead shares responsibility and accountability for the project with Functional Managers.

President managing VPs and Manager of PM who manages PM.

Functional manager and project manager both make most project decisions.

Advantages
• Shared resources between departments and projects
• Reduced duplication
• Cooperation between departments
• High-quality decisions are well received
• Continued development of discipline specific knowledge
• Effective integration
• Lessons learned shared effectively
• Flexibility—weak, balanced, or strong matrix
Disadvantages
• Each employee has two “bosses”
• More sources of conflict
• More meetings
• More challenges to control