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In This Section Functional, Project and Matrix Structures 
 Are Followers More than Physic... Author: Charles Albano
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In this two-part article I would like to review three well known major organizational structures:

Search  Functional Structure

Go >  Product or Project Structure
 Matrix Structure

Newsletter In Part One, I will point out the logic and the appropriateness of the first two structures, their
View newsletter archive presumed benefits along with the strengths, weaknesses and limitations each has
or enter your email to subscribe: encountered in the real world over time.

In Part Two, I will focus on the human aspects of working in a matrix-structured organization
Go > to include how the structure tends to impact people's interactions, attitudes, and feelings. I
will also discuss how in my experience managers perceive working in the matrix.

Some say the Matrix type of organizational structure came into existence as a corrective
response to the shortcomings of both the "Functional" and "Product or Project" structures. It
was part of a long and still active search for a more perfect structure, one that still aspires to
greater efficiency and effectiveness with respect to how people interact in accomplishing
work.

Though the Functional type of organizational structure (probably the oldest of the three basic
forms) has notable strengths, we know today that no form is perfect. Far from it - if anything,
organizational design is still a "black art." It takes some time before the limitations and
weaknesses of any organizational form are fully recognized. The search for "a more perfect
union" of people, technology, and tasks remains a very active pursuit in business, industry
and government.

Functional structure 

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Among the generally acknowledged strengths of the so-called Functional Structure are the
following:

Depth of competence achieved by virtue of grouping specialists in a given discipline/function

together.

A shared professional identity among the organizational members within the varied functional
offices, each of which tends to pursue its own mission from its own perspective. These
offices, for example being, "Sales" "Marketing" "Finance" "Production Engineering"
"Logistics" "Manufacturing" "Quality Control" "Legal," "Logistics," "R&D," "HR," "Information
Technology," "Competitive Intelligence," "Planning," and so on.

A grounded sense of comfort people enjoy in being in the company of others reared in the
same discipline, trained to perceive the "world" the same way, to offer services and solve
problems from within familiar operational paradigms peculiar to their respective professions.

Competence in depth, in theory at least, in that sizeable collections of professionals can fill in
for each other during absences.

A longer career ladder, that is, more opportunities for internal growth, vertical career
advancement. From an employee's perspective that is a good thing. But for some time now
organizational "pyramids" have been reduced in number of levels, spans of control
broadened to reduce overhead. "Pancakes" have come to replace the tall pyramids of the
past, and with that we have seen a significant reduction in the advancement opportunities of
employees.

A specialized competence through coaching, mentoring, and training provided by others

more experienced.

A logical and convenient way to group talent, organize workers, offer an incentive to attract,
retain, develop and advance personnel and more efficiently manage their contributions.

Those are some of the advantages typically cited for the Functional approach to organizing.
And there is truth in them. But, on the downside, for every cited strength there is a weakness,
and sometimes the weakness is a direct outgrowth of the strength itself. Let me clarify.

While functional grouping of professionals offers depth of insight, it does little to broaden their
perspectives. The result is tunnel vision, stovepipe thinking, a general inability to see the big
picture. This is all too common, and it is a serious matter in a work world characterized by
complexity and begging for integration.

Another potential liability stems from a tendency to de-emphasize horizontal communication

and coordination in favor of an over-reliance on the vertical chain of command. Decisions pile
up at the top levels of functional offices because subordinates may be unwilling or unable to
bridge the inevitable differences that arise across professional disciplines. Problem solving is
diminished.

Decision making is slowed down, and finger pointing replaces accountability and ownership
of results. Functional executives find themselves hard put to feed all the "monkeys" brought
to them by their respective employees. Empowerment is weakened and cross-functional,
cross-disciplinary teamwork suffers.

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Leadership Development - Results focused Leadership thinking and practice from around the Globe

So, while the Functional structure is touted in the literature for its "efficiency," in my
observation the claim is as likely to be untrue. There is a tendency to throw matters over the
fence for another functional office to resolve.

The Situation

In sum, it is fair to say that such structures may be seen as more or less "efficient" only when
the products or services they provide the public are standardized and based on routine,
relatively simple, repetitive business processes. This is mass processing.

But when their product lines and services face "hyper-competition" where speed, creativity
and flexibility are key to survival, these traditional bureaucratic structures prove muscle
bound by their own over-elaborated work processes. They are too slow to adapt and are
taken aback by rapid technological and competitive change.

Let me emphasize, though, that many formal and informal arrangements have evolved in
companies that seek to compensate for the weaknesses cited, and they have been fuelled by
a lot of sincere effort and commitment over the years. Cross-disciplinary groups, inter-
organizational problem solving teams have been established along with boundary spanning
liaison and coordinating committees. Planning groups have been set up to span
organizational lines. Job rotations have been utilized to broaden both worker and manager
perspectives and to instill a deeper knowledge and appreciation of the missions, functions,
problems, goals, and incentives of the other departments.

All that is good, and I believe these things have been helpful. And, of course, quality
management movement has long stressed organization-wide integration and teamwork and
has contributed to moving organizations in that direction. Value engineering and suggestion
programs have helped as well.

Still, the essential difficulties faced involve adaptation, integration and responsiveness, and
these seem to be inherent problems in this type of structure. There are many instances
where "fixes" have turned out to be nothing more than "band aids" leaving no lasting solution
to these dilemmas. Clearly there are times when restructuring may be the only viable
alternative.

Product or Project Structure

In the Product or Project structure, specialists from various disciplines, instead of being
scattered across a number of separate and distinct functional offices are gathered into offices
by logic of product lines, or customer type, or the very nature of the project. Sometimes a
Project Office disbands when its mission achieved.

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Leadership Development - Results focused Leadership thinking and practice from around the Globe

But Product oriented offices have a much longer tenure. Literature supportive of Product or
Project oriented structures cites the following virtues:

Specialists from varied disciplines now report to a common manager accountable for
planning, organizing, directing and controlling their work efforts. Therefore, that manager is
much better positioned to assure integration.

In this structure visibility is greater. There is now a single point of contact for external
customers needing assistance.

Clearer lines of accountability and responsibility accrue to the benefit of the firm's customers
and other stakeholders.

Being multi-disciplinary, this form of structure offers every worker a broader perspective on
operations, making for development a work force consisting of more broadly knowledgeable
professionals (generalists.)

And, by the same token, managers in this structure also have to be generalists, and that
means they are being better groomed by virtue of experience to become General Managers.

It is a good training ground for future leaders who must have a grasp of the big picture.
Individuals get to rub elbows with peers from different disciplines, learn more about their
work and their approaches. This makes for heightened learning, an essential component of
job enrichment.

There is far smoother and more efficient project evolution when R&D, production
engineering, logistics, field testing, maintenance, marketing and finance, and other functions
talk together, early on and continuously.

Gains include product quality, reduced cycle times, improved service, and far better
positioning to recognize opportunities to capitalize on cost savings all along the value chain.
Contrast this with the Functional organization structure known for "things falling through the
cracks," where it is said, "the right hand doesn't know what the left hand is doing."

Conflicts among key specialists can be resolved within the office by a (common) manager.
Decisions can be made much more rapidly than in the functionally structured organization
where bridges must be built, and many compromises and concurrences hammered out on
matters of cost, safety, schedule, technical decisions, and procedural options.

External contractor, supplier, customer, stockholder, and other vital constituency

relationships can be much more responsively meshed.

I have interviewed managers who have served in both Functional and Product Management
positions. They confirmed that the role differences are dramatic. They generally reported
more personal satisfaction in the Product/Project structure arising from a sense of having
had the authority and the control over the resources to "make things happen."

Managers like having control over results. They felt frustrated in a structure in which they had
to go, "hat in hand" to another Functional office peer for cooperation. Now as Product or
Project Managers, they saw their jobs as more interesting and more challenging and more
suited to preparing them to assume positions of greater managerial responsibility.

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Leadership Development - Results focused Leadership thinking and practice from around the Globe

Having said all that, it must be admitted that this form of structure, like all others, also has its
shortfalls.

Product offices have to compete among themselves to gain essential resources from higher
management.

A new product idea may not get a hearing if by its nature it doesn't belong logically in an
existing product office.

The in-depth specialized technical competence found under the Functional Structure is
lacking by comparison.

The firm may find that staffing each of a number of Product offices with similar representation
by disciplines is too redundant with HR costs prohibitively expensive.

The Matrix

I have heard it said many times in technical circles that, "If we didn't have the Matrix, we
would have had to invent it." In Part Two I will explore the meaning of that remark and reflect
on why others might regard that creation as a Frankenstein.

Charles Albano, 2004. All rights reserved.

View the next article in the series Project Management & The Matrix

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