Advantages and Disadvantages of Functional Organization

Organizations have their own styles and cultures that influence how project work is performed. The functional organizations is probably the oldest style of organization and is therefore known as the traditional approach to organizing business.

Functional organizations are centered on specialties and grouped by function. As an example, the organization might have a human resource department, finance department, marketing department, information technology department, and so on. The work in these department is specialized and requires people who have the skill sets and experiences in these specialized functions to perform specific duties for the department.

Advantages

• There is an enduring organizational structure.
• There is a clear career path with separation of functions, allowing specialty skills to flourish.
• Employee have one supervisor with a clear chain of command.

Disadvantages

• Project managers have little to no formal authority.
• Multiple projects compete for limited resources and priority.
• Project team members are loyal to the functional manager.

Characteristics of Projectized Organization

Projectized organization is an organization that focus on project. In this type of organization, the staffs report directly the project manager.

Six characteristics of a projectized organization are:

1. Project managers have ultimate authority over the project.
2. The focus of the organization is the project.
3. The organization's resources are focuses on projects and project work.
4. Team members are co-located.
5. Loyalties are formed to the project, not to a functional manager.
6. Project team are dissolved at the conclusion of the project.