There are three types of organizations such as functional, project based and matrix organizations.
In functional organizations structure, the organization is grouped into various departments where employees with same skills and knowledge are kept in the same groups such as marketing department, finance department, sales department. It helps the efficiency of each functional group. There is segregation of the organizational responsibilities and allocation of the tasks which ultimately eliminates the similarity of the work. Each department focuses on its own work. There is accountability that is someone takes the responsibility for the group. There is more clarity about the roles by each employee. Functional groups don’t communicate more which decreases the flexibility and innovation since the closed communication leads to lack of focus. Department becomes resistant to change and there is lack of coordination.
In project-based organization the project manager has line management responsibility for the project team members and there is more control over the team. It has a strong sense of identity and the whole team is focused on the team’s goal. The knowledge gets transferred from project to project. Project based organization the employees are always on move reporting to different project managers and performing different tasks.
In matrix organization there is multiple managerial accountability and responsibility. There is transfer of knowledge from one project to another between the departments. The major disadvantage of matrix organization is that there are two working bosses. This structure is more complex as compared to functional or project -based organization which results in difficulty in monitoring and controlling.
I prefer matrix-based organization because it has more clear project objectives that is it is not only visible through the project office but is well balanced the objectives of the functional organization. There is more coordination which can be achieved in this structure. The information flows effectively as there is both vertical and horizontal flow. Team members report to only on manager which reduces the conflicts or contradictions of the reporting to both the project and functional managers.