Matrix Organization

matrix organizational structure disadvantages

Management by project objectives is paramount to the way of thinking and working in a matrix organisation. When an organization opens international offices, HR professionals and other business leaders should be able to communicate as effectively with workers across the globe as around the corner. Having a robust intranet and using videoconferencing are alternatives to face-to-face communication. Organizational structures often need to change as companies expand around the globe. An organization’s leaders and HR executives should plan carefully before opening offices in another country. They may use diagnostic models and tools to guide the design process. The number of direct reports per manager or the number of horizontal levels or layers on the organizational chart.

Every organization follows a reporting structure that dictates how activities, roles, and responsibilities are directed. The cardinal advantage of a matrix structure is that it facilitates rapid response to change in two or more environments. For instance, a telecommunications company might be extremely concerned about both unforeseen geographic opportunities and limited capital. By departmentalizing its company with the financial function on one axis and the geographic areas on the other, it might benefit from having each of its geographic units intertwined with its finance department. For example, suppose that an opportunity to purchase the cellular telephone rights for a specific area arose.

Some workers like to create discord between their two managers because that gives them more freedom to operate independently. This issue can occur sometimes because the employee feels like their supervisors micromanage their duties, but it usually happens when a personal agenda is in play.

The way you structure an organization is going to offer a standard for operating procedures and routines. It will also determine who participates in what, and what project tools are best for the job at hand. It can be applied more usefully to an organisation involved in projects ranging from small to large. It can better respond to the changes in technology, market conditions, etc. The matrix structure is often an efficient means for bringing together the diverse specialized skills required to solve a complex problem. Matrix Organization is created by merging the two complementary organization, the project and functional, it represents the combination of functional and project organization.


A disadvantage of this type of structure is that the different functional groups may not communicate with one another, potentially decreasing flexibility and innovation. A recent trend aimed at combating this disadvantage is the use of teams that cross traditional departmental lines. We are deep content experts in remote & virtual teams, matrix management and agile & digital leadership. We can tailor content closely to your specific needs or deliver off the shelf bite sized modules based on our existing IP and 25 years of training experience.

However, too much of self-analysis and focus on resolution of conflicts may retard efforts toward accomplishment of objectives. Matrix design is one of the latest kinds of organisational designs which are developed to establish flexible structure to achieve a series of project objectives. Inspite of the above mentioned limitations, matrix organisation still remains one of the most popular forms of organisation. It may be either due to growing complexity and uncertainty of changing environment or an extension of business operations throughout the Globe. The matrix form of organisation can be used in public institutions also.

An organization can also fill its own corporate needs internally by creating a new modular department, which can operate interdependently with the whole. The term modularity is widely used in studies of technological and organizational systems. Product systems are deemed modular when they can be broken down into a number of components that can matrix organizational structure disadvantages then be mixed and matched to connect, interact, or exchange resources. Modularization within organizations leads to the disaggregation of the traditional form of hierarchical governance into relatively small, autonomous organizational units . Although modules are not generally interdependent, the modular organization is extremely flexible.

Identify priorities and goals for each project and share them with the managers and team. Consider how you will outline each expectation of the managers involved with the project. For example, the project manager might be expected to report on the overall progress of the project while the marketing manager QuickBooks might be expected to produce a result. Another issue is when team members’ roles aren’t clearly defined in the project or the division of responsibilities between employees’ functional roles and project roles isn’t clear. Select experienced managers for the project who can provide effective leadership.

Organizations can be structured in various ways that determine how the organization operates and performs. The modular structure focuses on dividing the business into small, tightly knit strategic business units , which focus on specific elements of the organizational process. Interdependence among the units is limited because the focus of many SBUs is more inward than outward and because loyalty within SBUs tends to be very strong. An advantage of the modular structure is that loosely coupled structures enable organizations to be more flexible and restructure more easily. The modular structure divides the business into small, tightly knit strategic business units ,which focus on specific elements of the organizational process.

Define Matrix Structure

Proponents argue that the network structure is more agile compared to other structures . Communication is less siloed and flows freely, possibly opening up more opportunities for innovation.

What is the main use of the organizational structure?

An organizational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. These activities can include rules, roles, and responsibilities. The organizational structure also determines how information flows between levels within the company.

A virtual organization is cooperation among companies, institutions or individuals delivering a product or service under a common business understanding. Organizations form partnerships with others—often competitors—that complement each other.

Specialists from several functional departments provide a pool of expertise, particularly technical skill. When the specified project is completed, various matrix organizational structure disadvantages individuals drawn from various functional departments will go back to their respective departments for further assignment to other projects.

Why Scheduling Issues Affect Project Management

The balance can be achieved through the built in checks and balances and the continuous negotiations carried on between project and functional personnel. The distribution of authority and status is more in agreement with professionals who work in a project. A matrix organization is staffed by persons, mainly professionals, drawn from the parent organi­zation. It becomes a great task building bridges between people coming from diverse backgrounds. The classical scalar chain of command has to give place to multiple command structure where one project manager has to report to more than one superior.

matrix organizational structure disadvantages

Each worker is then said to move horizontally between the project and home department, as neither duty should take precedence over the other. Project members will report to the project leader and the home department head. The project leader’s ability to manage members from different departments also gives him a horizontal role. Department heads remain the direct boss of only those in lower positions within their department, which is why this position is said to function vertically.

Project work stretches you, so returning to your previous role after working in a multidisciplinary environment on a new, challenging project, isn’t an appealing prospect for many people. Thus, managing the transition of the team when you close a projectbecomes even more important. Resources are dedicated to the project, so it’s much easier to schedule work. You’ll know when the team members are available and there’s no risk they’ll be pulled off at short notice to business-as-usual work for another manager. Elizabeth Harrin wrote about project management for The Balance Careers, has experience as a project manager, and wrote project management guidebooks. People are becoming more and more aware of the motivational phenomena lately and managers are becoming ever more careful, so they tend not to be too harsh on employees.

Business Ideas

Companies must identify their motives and needs to implement this structure to determine if it is the correct path to choose. The advantages may be beneficial if the current processes are falling short or there is an expectation of rapid growth soon. Then the disadvantages of cost and complexity might be enough to push some businesses away from this foundational choice. This structure increases the organizational complexity of the company. If the managers can get on the same page to understand what is happening, then the removal of a potentially problematic team member supports higher productivity levels. Discord in the management ranks means there is less supervision that happens during a project.

  • Not to mention, everyone will be aligned with real-time access to where things stand in cross-functional projects.
  • TrueNxus will be your single source of truth where you can instill project management best practices.
  • Matrix organizational structures have several advantages for both the organization and the employee.
  • With TrueNxus, you and your organization will be able to align cross-functional teams on leadership, goals, objectives, and communication.
  • First and foremost, matrix organizations provide both efficiency and cost savings for the company.

It is clear from the diagram that all the employees are subject to dual chain of command. They are accountable to their functional head as well as product line manager.

Before an organization has the opportunity to become matrixed, it is structured divisionally and functionally. There can be some conflict between business-as-usual tasks and project work for individuals, especially when both managers are giving them different priorities. The other project might have ring-fenced the best resources—the most appropriate people with the right skills—or their line manager might not make them available for project work. If you remove people from their functional jobs, they might find it difficult to go back, especially if the project is long.

Here are a few project management software options you can check out to make matrix management work for your team. Hiring new what are retained earnings people to establish a dedicated project team is a costly endeavor, and many small businesses are already cash-strapped as is.

As a result, critics of the modular organization argue that a firm’s modularity should be limited to the extent that its flexible nature affords gains. Various degrees of modularity are possible but not necessarily useful if the pros do not outweigh the cons. Managers must carefully consider whether or not a modular structure would be useful, either entirely or partially, for a given organization. One advantage of the modular structure is that loosely coupled structures can enable organizations to be more flexible and restructure more easily. For example, a firm can switch between different providers and thus respond more quickly to different market needs.

Some staffs perform only one of these functions but some may perform two or all the three functions. The primary advantage is the use of expertise of staff specialists by the line personnel. The span of control of line managers can be increased because they are relieved of many functions which the staff people perform to assist the line. Because line organisations are usually small, managements and employees have greater closeness. All managers must bear that there are two organisations they must deal with-one formal and the other informal.

For example, the engineering group will be answerable to the senior executive in engineering as well as product line manager. Top managers can delegate on-going decisions to project managers and leave themselves free to perform more urgent task. A conflict may arise among the managers regarding the utilisation of available resources. There should be a common willingness among the authority holders to face the conflicts with a view to resolving them. There should be an agreement among the managers regarding the authority of utilising the available resources. The term resources include physical resources, financial resources and human resources. It has been evolved the growing size and complexity of undertakings that require an organisational structure more flexible and technically oriented, than the traditional line and staff or functional structure.

The collaborating units present themselves as a unified organization. Two main types of vertical structure exist, functional and divisional. The functional structure divides work and employees by specialization. It emphasizes standardization in organization and processes for specialized employees in relatively normal balance narrow jobs. Creating relevant and accurate job designs after the organizational structure is determined. This task includes determining the knowledge, skills and abilities needed and addressing degree of autonomy, task identity and significance, skill variety versus job specialization, and work pace.

Say a company launches a new project that requires workers from several departments, including research and design, legal and graphic design. However, the company does not want those participating in the project to ignore the responsibilities of the home department.

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