Final answer:
The organizational approach that encompasses both functions and projects is known as the matrix model. This model represents a flexible and dynamic structure that contrasts with traditional hierarchical systems and emphasizes collaboration and cross-functional teams.
Step-by-step explanation:
The approach to organizing that includes both functions (disciplines) and projects in its hierarchy is known as the matrix model.
In a matrix organization, employees have dual reporting relationships - generally to both a functional manager and a product or project manager. This type of structure can be more dynamic and flexible than traditional hierarchies, enabling companies to respond quickly to changes in the market or to allocate resources more efficiently across projects. However, it can also lead to confusion and a dilution of responsibilities if not managed properly. In contrast to Theory X management styles, where rigid hierarchies and close supervision are prevalent, matrix organizations often rely on greater autonomy and collaboration.
Understanding the matrix model is essential for students studying business and management. It reflects the movement away from rigid hierarchical structures and the increasing complexity of modern organizations. As businesses move more towards integrated and collaborative practices, familiarity with this structure will help prepare students for current workplace dynamics.