Matrix Organization: Structure, Types, Examples, and Advantages

Matrix organization is defined as a complex structure implemented by business organizations. In most cases, the business entity follows a hierarchy system but here, the reporting relationship is set up as a matrix or a grid.

Employees will now have to report to more than one leader, for instance, both to the product and functional manager. The dual or multiple chains of command is an integral part of this structure.

Structure of matrix organization

There was a need for an organizational structure that would meet the comprehensive needs of complex problems, projects, and programs, especially when the resources were limited.

The traditional infrastructure was unable to meet the rising demands of large organizations that were under a conventional management system.

The major reason for adopting the matrix structure is that the resources can be straightforwardly shared and thus, it becomes easier to solve relative problems effectively. The matrix organization structure is a balanced combination of several organizational structures to achieve higher efficiency in their dealings.

The structure of matrix organization is complex and multi-dimensional no doubt, but it is capable of reaching higher productivity and efficiency levels quite easily. The organization becomes more flexible as the employees have to work under multiple managers.

The diversity in work culture leads to the overall development as every employee has to work with a different set of work as well as functions.

In a matrix organization, the employees are accountable to functional that helps with skills, prioritization and reviewing of work as well as product line manager who gives necessary directives on product offerings of the company. It is considered the toughest of the structures as the resources are pulled in several directions at once.

3 Types of matrix organization structure

The matrix organization structure can be divided into the following types-

#1. Strong Matrix Structure

In this type of matrix structure, the authority lies with the project manager. He has a powerful role in the company and occupies a full-time role and responsibility. His power is unquestionable as he has a full-time administrative staff under him.

He is the one that controls the project budget. In a Strong Matrix Structure, the role of a functional manager is very less.

#2. Balanced Matrix Structure

As the name suggests the balance of power in a Balanced Matrix Structure is distributed equally between the functional and project managers. Both have equal authority and power in the company.

The project manager has a full-time role, but he receives a part-time administrative staff for project management. The project budget is controlled in an equal manner by both of them.

#3. Weak Matrix Structure

In this type of matrix structure, the project budget is controlled by the functional manager. The project manager has limited authority and power as his role is that of a coordinator.

Here is a video by Marketing91 on Matrix Organization.

Examples of matrix organization

A real-time example of matrix organization is the world-recognized Dutch origin multinational organization Phillips which in the year 1970 set up the matrix organization structure in its company.

The managers now had to report to both the product division and geographical managers. Several other organizations that have implemented matrix organizational structure are Texas Instruments and Hughes Aircraft.

Suppose you are working as an engineer in a functional department and your company receives a project where they need an engineer for a few days.

You might then be assigned to that project also, and now you will have to report to two sets of bosses even if it is for a shorter time duration. This infrastructure where an employee will have to work under one or more leader is matrix structure.

13 Advantages of matrix organization

There are numerous advantages of matrix organization for instance-

1. Equipment is shared for projects; hence, resources are utilized to their maximum capacity. Facilities, machinery, and human resources are also shared between different projects.
2. Experts are easily available for review because he/she is available for several projects at one time
3. The flow of information is up and across the company. The horizontal flow offers information about project systems across functional units, and vertical flow offers detailed information about disciplinary nature to flow between different projects and also different management levels. If you need any information, then it is not contained to a single project or department but can be shared within the organization at any level.
4. Sharing of valuable as well as mundane information and data is easy because the employees are in contact with several people
5. The decision process works faster
6. Enhances motivational skills
7. Develops self-management skills as an employee is reporting to more than one boss and sometimes also has to act autonomously
8. The objectives of a project are visible and clear
9. There is co-ordination amongst functional lines, and this leads to project integration across functional lines
10. There is a retention policy that keeps together the functional specialists and experts together, even when one project is complete. The know-how and technology are not lost as specialists continue to work in other projects by exchanging information and ideas. When a team that includes functional specialists work together, it leads to an increase in productive and innovative output.
11. The moral of an employee is high as he is simultaneously working on different projects.
12. The matrix organization has proved an effective training ground for prospective managers. There is a greater chance of going up the ladder as his contribution is easily recognized and appreciated.
13. When a project is completed in a matrix structure employees are not eligible for lay-offs instead are relocated and shared with other departments, so there is less chance of employee dismissal.

13 Disadvantages of matrix organization

The disadvantages of matrix organization are as follows-

1. The employees are working under multiple bosses, and sometimes situations arise where one boss is played against the other by an employee
2. Conflict arises as resources are pulled in several directions and this leads to ambiguity
3. Accountability becomes difficult because of shared responsibility
4. There is a confusion about the primary role and responsibility of an employee
5. The multiple lines of authority lead to conflicting guidance and information
6. Several projects result in problems with resource allocation and project priorities
7. It is not easy to evaluate the performances of the employees when they are working on different projects simultaneously
8. As more managers are employed the matrix organization is more expensive than the traditional one
9. Monitoring is difficult and controlling of managers as well as employees because of the complex infrastructure
10. As more units are involved the flow of information is also affected to a greater degree. It is important to keep in touch at regular intervals to avoid this problem
11. As numerous people are involved in the decision-making process, it becomes difficult to get fast reactions on project
12. There is a conflict in management goals between functional management and project objectives. The functional manager gives importance to technical excellence even if it is at the cost of schedules, whereas the project manager gives importance to cost and time constraints.
13. Sometimes the conflicts in the matrix organization can become personal and lead to sabotaging of projects

How to Succeed with a matrix organization structure?

• Close cooperation between both the functional and project manager will go a long way in minimizing conflict and confusion
• Maintain an open and strong communication channel to communicate the goals, objectives, and vision of a company to employees, supervisors, managers, and executives
• Maintain a balanced distribution of power and authority between both the functional and project manager
• It is vital to document and communicate the roles of each manager so that the roles and responsibilities are clear from the onset.