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Differences between Functional vs Matrix organization structure in Engineering firms

The Functional organization structure

Source: PowerSlides

This structure provides the framework for the activities of the organization and must harmonize with its goals and objectives. A functional structure is based on top-down hierarchy levels that include different departments that group individuals by specialization, common knowledge, and skills (indeed, 2021).

Some advantages of functional structures are increased productivity and efficiency because specialist departments work independently of each other with minimal supervision which offers work to be completed faster (indeed, 2021).

Specialist groups having common skills and knowledge creates an environment of clarity that allows the company to tap into high-level information related to a specific topic (MasterClass, 2022).

Disadvantages of Functional Structure

Furthermore, some disadvantages include the potential competition between departments in inter-department collaborations since each department has its own set of specific goals which sometimes results in the distortion of the company’s broader goals and objectives.

It is the manager's responsibility to maintain a harmonious work environment which could be a difficult task as poor communication is present across functional areas (MasterClass, 2022). Decision-making is inefficient as formal approvals from management are required which in time-pressured situations may slow the delivery of a project (indeed, 2021).


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The Matrix organization structure

Source: Asana

The matrix structure allows the integration of various engineering specialist departments to work in a project lead environment through a two-way flow of authority and responsibility of project managers (horizontally) and specialist engineer managers (vertical direct chain of command).

This structure provides a stable base for specialized activities and a permanent location for staff (Mullins, 2016), which allows for efficient use of resources and sharing of skills that reduce overhead costs and project time completion (Asana, 2021).

Advantages of a Matrix Structure

Compared to a hierarchical structure, a matrix has the pros of allowing free flow of information between departments which increases team productivity, offers greater security and project information control and gets the project done more effectively which was one of the issues identified in Arundel’s SWOT analysis (Asana, 2021) (Mullins, 2016).

Disadvantages of a Matrix Structure

Nevertheless, the matrix structure has some disadvantages. The structure can overcomplicate operations and be time-consuming as to who to report to due to the presence of two leaders (Asana, 2021) (Mullins, 2016). Divided loyalties and role conflicts can arise, if staff is brought into this structure at a later stage of their careers, which will potentially require supportive training programs to help staff develop their conflict resolution and teamwork skills (Senior & Swailes, 2016).

It should be stated that developing an effective matrix organization takes time and patience to learn its new roles and behavior which makes it harder for the management to implement it (Kolodny, 1981). Hence, a potential phased transition period of organizational change should be curried out.


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Working Groups v Teams

Source: Asana

Groups and teams are essential features of any organisation. The understanding of both systems is vital for the success of a business.


A group is a collective of individuals that coordinate their efforts to share information and make decisions independently and have individual accountability towards the collective objective (Asana B, 2021) (Katzenbach & Smith, 1993). Groups are great for efficiency, career growth, specialization, and doing parallel work. However, groups lack team bonding and teamwork, communication efficiency, and lack organizational clarity.


Teams are defined by a shared purpose and responsibility of team members who are both individual and mutually accountable. Sharing of information and collective decision-making increases collective performance and promotes innovation (Katzenbach & Smith, 1993) (Asana B, 2021).

Some of the advantages of teams are, improved productivity, quicker problem solving, and better communication. However, drawbacks are the reduction in efficiency and low individual growth as the collective is more important than the individual. A comparison of both groups and teams is illustrated below.

Figure 4 - Working Group v Team differences (Katzenbach & Smith, 1993)
Working Group v Team differences (Katzenbach & Smith, 1993)


Asana, 2021. What is a matrix organization and how does it work?. [Online] Available at: [Accessed 6 March 2022]., 2021. 4 Types of Organizational Structures. [Online] Available at: [Accessed 2 March 2022].

Kolodny, H. F., 1981. In: Managing in a Matrix. s.l.:Business horizons, pp. 17-24.

Kreitner, R., Kinicki, A. & Buelens, M., 1999. Organizational Behaviour. In: f. E. edition, ed. s.l.:McGraw-Hill., 2022. Functional Structure: 3 Characteristics of Functional Structure. [Online] Available at: [Accessed 6 March 2022].

MindTools, 2022. Herzberg's Motivators and Hygiene Factors Learn How to Motivate Your Team. [Online] Available at: [Accessed 3 March 2022].

Mullins, L. J., 2016. Management and organisational behaviour. 11th ed. London: Pearson .

OpenLearn, 2022. 3.5.2 Handy’s four types of organisational cultures. [Online] Available at: [Accessed 12 March 2022].

Senior, B. & Swailes, S., 2016. Organizational Change. 5th Edition ed. s.l.:Pearson.

Xiaoming, C. & Junchen, H., 2012. A Literature review on organisation culture and corporate performance. International Jourrnal of Business Administration, 3(2), pp. 28-37.


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