Figure 2-7. Functional Organization
In the PMBOK (Project Management Book of Knowledge) by the Project Management Institute. organization are classified in three varieties: as:
functional - A hierarchical organization where each employee has one clear superior, staff are grouped by areas of specialization, and managed by a person with expertise in that area.
projectized - an organizational structure in which the project manager has full authority to assign priorities, apply resources, and direct the work of persons assigned to the project.
matrix: Any organizational structure in which the project manager shares responsibility with the functional managers for assigning priorities and for directing the work of persons assigned to the project.
There are reasons why stand alone functional management can be counterproductive. Power tends to be rigidily hierarchical. Learning becomes person oriented and used for mantaining the power position. A learning organization instead requires that knowledge is shared and evenly distributed in the organization.
In a functional organization, a project team is staffed with people from the same department. All the resources needed for the project team come from the functional organization. For instance, if the project is related to the finance function, the project resources come from the Finance Division. If you need IT, finance and legal resources, they would all be available from within the Finance Division.
A second way that a project is staffed in a functional organization is by executing portions of a project in one functional organization at a time. For example, let’s say that a large project needed resources from the Finance, Purchasing, IT and Manufacturing departments. In a functional organization, the project would be broken down by organizational unit and each unit would do its own part relatively independently. The IT Department would work on its piece. The Finance Department would work on its piece. The Manufacturing and Purchasing Departments would work on its pieces. At the end, all of the independent solutions would be integrated into one final solution.
The biggest advantage of functionally-based projects is that there is usually clear authority, since the project managers tend to also be the functional managers. You also do not need to negotiate with other organizations for resources, since all of the staff needed for your project will come from the same functional organization. Other advantages of this organization are that the team members are usually familiar with each other, since they all work in the same area. The team members also tend to bring applicable business knowledge of the project.
A major disadvantage of the functional organization is that your functional area may not have all of the specialists needed to work on a project. A Finance Project with an IT component, for instance, may have difficulty acquiring specialty IT resources such as Database Administrators, since the only people available will work in their own functional department. Another disadvantage is that project team members may have other responsibilities in the functional organization since they may not be needed full-time on a project. They may be assigned to other projects, but it is more typical that they would have support responsibilities that could impact their ability to meet project deadlines.
Figure 2-7. Functional Organization
See Four reasons to share power; the employee empowering organization
-----
Other resources