This is the classical type of organization structure that has been commonly practiced and followed by companies and corporation around the globe. The major reason to implement this structure to combine expertise in the form of functional departments which include but not limit to human resource, research & development, marketing, management, supply chain and others.

As the name suggests, in this type of organization power lies with department head/team head. Therefore, project manager has low involvement and authority. The project information remains within the department and if the services of other functional areas are need in that case information flow from one department to another via departmental heads.

Team members performs project work along with the departmental work that means high utilization of resources.

Advantages of Functional Organization Structure

• Team members report to one boss.

• Team members have permanent home.

• Organize by expertise.

• Better utilization of resources.

• Team members perform departmental and project work.

• Team members are trained according to their domain.

Disadvantages of Functional Organization Structure

• Team members doesn’t report to project manager.

• Team members learning is limited to their domain.

• The relationship between departments are very complex.

• The project manager has limited or no authority.

• Most of the time information remains within the specific department.

• Legacy structure.

• Low flexibility in process,procedure and policies for challenging projects.

• No growth in project management domain.

• Cross functional decision making take more time.