This is not such a big issue as it may seem by the question of the original poster. Unfortunately, I don't have a definite answer either. But I have an opinion.
First of all, let's put this into context: This issue only arises, if you have a question on the PMP Exam that asks: "What are the advantages (or disadvantages) of a Projectized Organization?" The question here is "As compared to which of the others... the matrix or the functional organization? We do not which one the PMI chooses to compare it to on the PMP exam. My opinion is that we want to compare it to the functional organization because, 1) this is the most traditional organization and 2) it is at the "other end" of the spectrum of organizational structures.
If the question is "What are the advantages (or disadvantages) of a Matrix Organization?" then I would also compare it to the functional organization because the matrix organization is a way of "overcoming" its negative aspects.
If the question is "What are the advantages (or disadvantages) of a Functional Organization?" then your guess is as good as mine. In this particular case, you let yourself be guided by the available answers.
As soon as the question is phrased like "What are the advantages (or disadvantages) of a Functional Organization versus the Matrix Organization?" (or any combination) then this problem does not arise. You immediately know what to compare it to.
So to conclude: In my opinion, this is one of these issues that gets blown out of proportion. It is better to shrug your shoulders, accept the small probability that you will have to face this possible ambiguity on the exam and focus your studies on understanding project management concepts.
Thanks for bringing this up Harwinder, as I too noticed this difference between Head First PMP and the audio prep cast. Those were version 3 materials I was working on, have now moved onto v4 - but I suspect this same issue occur on PMBOK v4 exam.
Here's a question posted on the Head First forum by a PMP aspirant. I request you to clarify the point mentioned here:
I have a question regarding kinds of organizations. I read in Headfirst PMP, that if a question on the exam does not mention which type of organization it is talking about then we need to assume that it is a matrix or a projectized organization.(Pg 26 HeadFirst PMP).On the same page,they again say that assume it is a MAtrix organization always.While Cornelius Fichtner says that we need to assume the organization as a Functional organization always,Rita Mulcahy says to assume that it is a matrix organization if the question does not mention the type of organization. I am Confused...!! Help!!
Please Let me know what should we assume as the type of organization if the question on the PMP exam does not mention the type !