Question

Different between a functional organizational structure, a project organizational structure, and a matrix organizational structure for the systems department. Give one advantage and one disadvantage of each.

Answer 1

Functional organization follows a hierarchy system. It comprises of a functional manager who is responsible for the decision-making process with respect to scheduling, budgeting, and equipment, as he possesses certain expertise. The project manager, if present in this type of organization, has minimal authority. The organization is divided into departments such as finance, sales, PR, etc.

Advantage - Employees are more skilled in their respective departments in a functional organization, hence maximizing productivity.

Disadvantage – It might be a complicated task for the project manager to procure resources from other departments due to poor communication between departments and a high level of bureaucracy.

                                                 

Project organization is completely opposite to the functional organizational structure. As the name suggests, this organizational structure is project oriented. The structure is organized in a manner that gives authority to the project manager. He has control over his team, the budget as well as the schedule of the project. He remains at the top of the hierarchy making crucial decisions about the project

Advantage – Due to a set line of authority, the decision-making process is quick as the communication process is smooth.

Disadvantage – As the structure is project oriented, the employees might be stressed out frequently because of handling multiple projects at the same time.

Matrix organization can be considered a hybrid structure that lies somewhere between the functional and project organization. There are two types of Matrix structures: strong matrix and weak matrix. The strong matrix structure shares similarities with the project structure as the project manager assumes responsibility of the project. If the organization follows a weak matrix structure, then the responsibility lies in the hands of the functional manager. There is also a balanced matrix structure where the project manager and the functional manager assume equal responsibility.

Advantage – Resources can be utilized and moved efficiently across departments thus maximising performance.

Disadvantage – There might be a conflict between two projects as the teams might fight for the same resources.