Matrix Organizational Structure

Matrix Organizational Structure

Matrix Organizational Structure

Most managers and employers are familiar with hierarchical business models and traditional organizational charts.

These resources are used to illustrate the chain of command within a company.

They show which employees report to which manager and how responsibilities, job roles and activities are organized to meet business development opportunities.

Traditional organizational structures usually include one chain of command.

With a Chief Executive Officer at the top of the chart, it is clear to see which staff report to which manager, and management roles are fixed.

Each level of staff reports to the manager above them on the chart, with everybody ultimately feeding upwards to the CEO.

While the traditional corporate hierarchy is undoubtedly effective in some environments, it is less effective in companies where cross-functional team working is prioritized.

In these types of organizations, a matrix structure is typically more effective.

A matrix organizational structure is especially useful for companies that share resources and employees across multiple sites.

Within a traditional hierarchy, workers report to one manager or boss. In a company with a matrix organizational structure, employees must report to both a product/project manager and a functional manager.

The product/project manager carries out the responsibilities of a traditional project manager, whereas the functional manager oversees functional, or routing, activities.

When skills must be shared across sites or departments to meet an objective, a matrix organizational structure can enable the company to effectively use employee strengths and talents.

In a matrix structure, staff often have more than one job role and work across more than one area of the business. For example, a person working in the role of social media manager will likely need to interact with communications, PR, digital marketing and sales staff.

What Is a Matrix Organizational Structure?

The matrix organizational structure is a type of blended structure for an organization. It is best suited to the management of large, complex projects.

A functional hierarchy still remains; however, the project manager’s contribution tends to be valued more highly than in a traditional hierarchy.

The project manager has the authority to oversee the projects they are responsible for and assign the necessary resources.

Sharing skills and responsibilities across the business allows managers to adopt a more holistic approach to problem-solving.

When managing projects, an organizational structure with many hierarchical layers can stop the project team from meeting its objectives efficiently.

Introducing a matrix organizational chart can help employees to navigate large-scale projects, allowing them to respond quickly to other members of the multidisciplinary team. This structure allows an additional element of flexibility, helping teams to complete work within tight deadlines.

As mentioned above, each team member is accountable to at least two people, usually a project/product manager and a functional manager. There are multiple chains of command, with no prescribed balance of power between the different management roles. Managers are expected to work dynamically with a fluid approach.

Example Matrix Organizational Structure

  • CEO
  • Project/product manager and functional manager
  • Team member 1 / team member 2 / team member 3 / team member 4 / team member 5 (all report to both project/product manager and functional project manager)

Each team member reports to two different line managers, each with their own priorities and responsibilities. Each manager reports directly to the CEO, who is the only staff member in a fixed management role.

A matrix organizational structure is well suited to teams with multiple projects running at once. Rather than having to create many different teams for each project, existing staff can be utilized according to their strengths and personal attributes.

The managers will guide them through the different elements of each specific project, alongside their normal responsibilities and tasks.

What Types of Matrix Organizational Structure Are There?

Matrix organizational structures can be categorized as being weak, balanced or strong. These descriptions relate to the level of authority given to the project/product manager.

  • Weak matrix – More authority given to the functional manager
  • Strong matrix – More authority is given to the project/product manager
  • Balanced matrix – Equal authority is given to the functional manager and the project/product manager

Weak Matrix

In a weak matrix, the functional manager might see the project manager as a threat to being able to meet the functional goals of their service or department. If the functional manager has very different goals from the project manager, this can be problematic.

Without a shared vision, the managers could end up working at cross purposes, which may lead to a power struggle.

To avoid this, the functional manager and project manager should liaise at an early stage to discuss ways of linking their individual goals to the overarching objectives of the business.

Balanced Matrix

In a balanced matrix, the project manager and functional manager might become confused about who is responsible for managing which tasks.

The same issue may also affect employees. If staff are unsure whom to contact or if they share information with people who don’t need it, there will be a breakdown in communication.

Using an RACI chart is a helpful way to resolve this. For every aspect of the project, the letters R, A, C and I should be allocated to each team member:

  • R – Responsible for completing the work and involved in decision making. This can be allocated to more than one member of the team.
  • A – Accountable for success. This is usually allocated to one individual, although it can be shared.
  • C – Consultant for the project. This person has the knowledge or expertise that is needed to complete the project, but they are not responsible for decision-making or carrying out the day-to-day tasks.
  • I – Informed people. These people need to be kept updated on progress, but they are not directly involved in the project.

In a traditional hierarchy, the reporting structure is more straightforward. The hierarchy clearly outlines which staff report to which manager, and the manager is accountable for the overall output of the team.

Strong Matrix

In a strong matrix, the functional manager may feel that communication from the project manager is lacking. Common themes for communication conflict include project prioritization and the allocation of business resources.

Developing a team charter is a useful way to clarify priorities, responsibilities for decision-making and the distribution of resources.

Matrix Organizational Structure: Everything You Need To Know
Matrix Organizational Structure: Everything You Need To Know

What Are the Advantages and Disadvantages of a Matrix Organizational Structure?

Advantages

Using a matrix organizational structure brings many benefits to businesses, including:

  • Clear and transparent project objectives – In comparison to a traditional organizational structure, teams in a matrix organizational structure are better equipped to meet project-based work objectives.

  • Open lines of communication across the business – With a matrix structure, communication often improves and helps staff to feel more ‘in the loop’ in terms of general business activities and progress against objectives. Knowledge moves easily between departments, helping to break down barriers between teams.

  • Improved opportunities for collaborative working – A matrix organizational structure encourages cross-department working, so staff gain an understanding of their colleague’s challenges and opportunities. Highly skilled workers within the functional departments are available to assist the project team, meaning a group of ‘expert’ staff is always on hand to help without needing to recruit additional resources.

  • More efficient time management – Cross-department working enables teams to streamline processes and reduces the need for doubling up on certain tasks.

  • A stable work environment, which contributes to increased levels of employee satisfaction – Staff working in a matrix team environment are likely to feel more engaged with the objectives of the business, leading to higher levels of ‘buy-in’ and better levels of contribution. Staff also enjoy more opportunities to widen their experience and improve their skill sets, allowing them to progress with their career development goals.

Disadvantages

There are a few negative points to consider if you are planning to implement a matrix organizational structure:

  • Team conflicts are likely – This can occur especially if staff develop a preference for one manager over the other. In a traditional structure, one manager takes charge of a business unit or department. With more than one manager looking after staff, working relationships can become complicated, and there is an increased chance of conflict between colleagues and management. In a matrix structure, the lines between job roles tend to be more blurred, and this can cause conflict if individual responsibilities are not clear.

  • Planning and setting up a matrix structure is complicated – Due to the additional complications, it takes more time to plan.

  • Workloads can be heavier – Staff must complete their ‘normal’ work alongside their project-based tasks. In some cases, this can lead to staff burnout or tasks being missed or forgotten.

  • Managers may have different management styles – This can mean that they might not get along. This can still be an issue within a traditional organizational structure; however, it is more difficult to address when managers share line-management responsibility for their direct reports.

  • Managers may have conflicting objectives – This can lead to disputes. Again, this can also be common in traditional hierarchies.

  • Decisions must be approved by several different people before action can be taken – This can lead to delays.

  • The functional manager and project manager could have different individual objectives – This can make it difficult to establish and agree on priorities.

Final Thoughts

For a matrix organizational structure to be successful, you must implement a clear company vision and well-defined lines of communication.

Choosing the appropriate hierarchical organizational structure is key to the success of your business. The right structure will depend on your business strategy, organization size, project objectives and workforce demographics.

You should also consider the cost implications of introducing a matrix-style structure, as employing more people in management roles is likely to affect the bottom line of the business.

For a matrix organizational structure to be successful, you must implement a clear company vision and well-defined lines of communication.

If you are considering implementing a matrix organizational structure, the first step is to evaluate your existing team and resources.

Consider business and employee needs and strengths, as well as the schedule or upcoming projects and deadlines.

If your business is working on a number of different wide-scale projects, a matrix organizational structure may be an appropriate choice. However, you should also consider the motivation and experience levels of your staff.


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