My summary of the main difference between functional management and project management:

In project management work is managed towards a single objective for a unique endeavor with a definite beginning and an end. In general management it is about multiple related objectives to manage the workload in an operations environment where work is done continuously.

Your Virtualpm, Linky

Reno,

The functional manager focuses on providing management oversight for an administrative or functional area of the business such as accounting, inventory control, etc. They provide subject matter expertise to the project.

The project manager manages specific projects and may or may not report to a functional manager.

Best regards.

In matrix organizations, the functional manager will be permanent (as long as the the employee does not change function) while the project manager will change from project to project.

I believe if you want to go from project management to becoming a functional manager, you will need to develop your knowledge of administrative management.

Reno, This is the link to the "official answer. http://en.wikipedia.org/wiki/Matrix_management BTW, at the bottom line the people are making sense of their title

A functional manager focuses more on making sure the wheels are moving smoothly in a particular process or area of responsibility. This means an understanding of the process, a relationship with the people on the team and a commitment to serving the client(s) of that function.

If you're a project manager who has enjoyed managing the uncertainties of projects, you might find being a functional manager boring.

On the other hand, if you are looking for more consistency in your day to day activities or to solidify your position in your company as an functional expert, a functional manager might be just the right thing for you.

The more I listen to Manager-Tools.com podcasts, the more I come to realize there is often only one thing that seperates a Functional Manager from a Project Manager.

Functional Managers have to write yearly reviews.

Project Managers have to 'lead' cross functional teams. The leadership they use is nearly indistinguishable from that of a functional manager. While a functional manager has ‘role’ power over his team, a good FM does not use her role power to get the job done, relying on influence and relationship power instead. These are the same two key powers of a PM.
In the end, there are very few things that separate an FM skillset from a PM skillset, both are very much about being management and making teams effective.

It's the difference between building the treadmill and feeding the hamsters.

One has a defined end (ie: building) and the other goes on day after day and is much more complicated due to the complex nature of hamsters.

NB: This isn't intended to be derogatory to hamsters in any way.