The four basic types of project organization structures are functional, projectized, matrixed, and composite organizational structures. Functional organization structures are noted as being organized by their functional services. They help provide continuity and expertise to divisions and their projects, but they can often lack holistic approaches (Meredith, Shafer and Mantel 2017, 149-150).
A projectized organizational structure differs from a functional organization by the fact that the organization is structured by different project teams instead of functional groups. Projectized organizations help reduce issues of communication and permissions during projects, however, this structure can also create inconsistent approaches and team members worrying about what happens after the project ends (Meredith, Shafer and Mantel 2017, 152-153).
A matrixed organization is a blend of both functional and projectized organization structure. While there are variations in how these two types blend, in a matrixed organization structure the project manager controls when and what team members do, but the functional manager controls who is assigned to the team and how the work will be done (Meredith, Shafer and Mantel 2017, 153). This approach can improve consistency from just a projectized organization and removes the issues with what happens after a project for team members. However, this means that employees effectively have two bosses which can create a variety of confusion and loyalty issues (Meredith, Shafer and Mantel 2017, 155-156).
Reality is often more complex than simple theoretical approaches, so many organizations fall into the fourth category: composite organization structures. Composite structures typically create a temporary structure that includes a blend of functional, matrixed, and projectized divisions or a project management office (PMO) for running multiple projects. The projects are typically either absorbed into business-as-usual functional departments or developed into subsidiaries or independent operations if successful (Meredith, Shafer and Mantel 2017, 158). This structure is often the most flexible to address special problems but does have the potential to lead to conflicts between project managers and functional managers. This format typically leads to a matrix form eventually if projects continue to grow in numbers (Meredith, Shafer and Mantel 2017, 159).
Author: Logan Callen
Meredith, Jack R., Scott M. Shafer, and Samuel J. Mantel. 2017. Project Management: A Strategic Managerial Approach. 10th ed. Hoboken, NJ: John Wiley & Sons. ISBN-13: 9781119369097.