How to Make Your Matrix Organization Really Work

Their org chart is broken up into departments like marketing, operations, and accounting. Each of these departments has a Director or “Head of” who oversees everyone who operates within that function. An organization’s structure has a huge impact on how successful it’s likely to be. Brenda’s goals for Juan included implementing a new supplier network model with ambitious timelines. Meeting her goals would require a substantial time investment for Juan and his small team. Meanwhile, Steve was grappling with critical materials and staffing shortages and had asked Juan to optimize workforce and supply costs.

In this structure, employees don’t take top-down commands from higher-ups. Instead, the chain of command is flattened, and each member of the matrix organizations are really a combination of the team has autonomy to suggest new initiatives. This allows companies to be agile and implement new product features as fast as possible.

Teams and task forces multiplied, often doubling or tripling in number in the space of a few years. If you think the matrix organizational structure may work for now, there’s good news. With Functionly, you can experiment with this as an option, without disrupting any existing workflows or departments. Matrix organizational structures are often used in project management because they speak to both the product of the project and the function of the management producing it. Let’s take a closer look at this type of organizational structure to determine its pros and cons in project management.

FAQ: Matrix Organizational Structure

When the project manager feels supported by other members of senior management, project organization becomes a priority. Matrix organization, a system characterized by a form of management with multiple chains of command. The problem of having the function and skills fragmented in an organization makes it more difficult to handle large projects successfully. It’s harder with this type of top-down organizational structure to have a holistic view.

The company might hire three employees for this role in a hierarchical organizational structure, one for each department. A matrix organizational structure allows a single employee to oversee all departments’ customer service demands since all three divisions can benefit from this expertise. With this system, the company saves money by cutting waste, removing duplication, and simplifying work processes. This clarity should cascade into frequent conversations between managers and their direct reports about the specific role each
person plays in advancing the company’s objectives. Consultative (as opposed to authoritarian) leadership practices can contribute meaningfully to accountability, according to McKinsey’s OHI research. A matrix organization is a work structure where team members report to multiple leaders.

Geographic structuring is especially important if tastes and brand responses differ across regions, as it allows for flexibility in product offerings and marketing strategies. Also, geographic structuring may be necessary because of cost and availability of resources, distribution strategies, and laws in foreign countries. Coca Cola structures geographically because of the cost of transporting water. NetJets, a private aviation company, had to create a separate company in Portugal to operate NetJets Europe, because the entity had to be owned by a European Union carrier. The customer-based structure is ideal for an organization that has products or services unique to specific market segments, especially if that organization has advanced knowledge of those segments. If there is too much autonomy across the divisions, incompatible systems may develop.

Team-based Structures, Networks, and Modular Organizations

Strong matrixes allow project managers to control projects more than the department heads. This arrangement generates a strong organizational structure since the project manager has complete responsibility for the project. Although the departmental head can supervise the project, they do not have the final say on project direction. The strong matrix gives participants a direct path to the project manager while maintaining the functional aspect of the operation.

As the name suggests the balance of power in a Balanced Matrix Structure is distributed equally between the functional and project managers. The development of the matrix approach reflects the need for organizations in a number of public and private spheres to adapt to increasing task and environmental complexity. This Global Integration video explains what a matrix organizational structure is, where they exist, and why they have become considerably more common in today’s global economy. The project manager in a strong matrix organisation has equal or greater power than the functional manager.

Potential Matrix Benefits

While a matrix organizational structure might not be right for your company — at least for now — there are others to consider. In a projectized organizational structure, a company isn’t divided into different departments. Rather, the majority of an organization’s resources are allocated towards specific projects, and the entire staff works towards completing them.

• Beneath the surface, we found some areas (particularly collaboration) where matrixed organizations performed better than less matrixed ones and others (related to role clarity) where they did worse.
• Brenda wanted Juan to avoid changes to the workforce or supply commitments until the new network model was approved by senior leadership.
• You may bring the candidate on board for the project’s duration and then return them to their usual responsibilities after the project is over.
• Despite occasional exceptions, the work done here often results in a more effective and efficient organization.
• Managers coordinate and control relations both internal and external to the firm.

Rather, they allocate all of their resources to complete one of the projects it’s undertaken, such as remodeling a house or building a backyard shed. To fully understand them, we must first explain the two different approaches they bring together. There are three types of matrix management, with each type giving more or less authority to the project manager. You can visualize these management types on a scale with the project manager on one end and the department manager on the other. Reporting to a department manager functions similarly to a traditional work structure.

The goal of this structure is to achieve rapid organizational evolution and adaptation to constantly changing external and internal environments. However, if the business has many projects, it will need some permanent staff to manage administrative, finance, legal issues, etc. Put simply; they need some permanent staff to take care of regular activities. Traditional silo approaches may be too constrictive for large companies because those experts never communicate and knowledge bases stay separate, creating silos. This can mean that large projects aren’t getting the best talent from the organization. A matrix structure gives you more flexibility in moving and allocating staff members and resources.

The Cons of Matrix Organizational Structures

You’ll be able to fill positions without being short-staffed due to injury or illness. A hierarchy structure commonly has a single person for employees to report to. A matrix structure is a simultaneous combination of (usually) two ways of organizing a company, for example, by function as well as geography, or product. Traditional hierarchical models have been in use for millennia because they provide a straightforward framework for reporting. Supervisors benefit from knowing exactly who their direct subordinates are and their day-to-day tasks. Project supervision suffers when there is discord in the ranks of management.

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. Encyclopaedia Britannica’s editors oversee subject areas in which they have extensive knowledge, whether from years of experience gained by working on that content or via study for an advanced degree. They write new content and verify and edit content received from contributors.

Every organization is structured in some way, and that structure is determined by its business goals and project objectives. The way you structure the functional areas of an organization is going to offer a standard for operating procedures and routines. It will also determine what your team members do, and what project management tools are best for the job at hand. Thus, project managers may serve as leadership role models for subordinates. This benefit improves the chain of command and decreases the expense of maintaining a separate training unit inside the firm.

Finally, matrix organizational structures often represent an additional and sometimes significant expense. In order to retain more managers — the department heads, plus the project managers — company payroll balloons, which obviously has an impact on the business’ bottom line. While matrix organizational structures open the lines of communication, they can also make reporting more confusing.

In general, a team is made up of people with complementary skills who are working toward a common purpose. Organizations create teams by grouping employees in a way that generates a variety of expertise and addresses a specific operational component of the organization. Teams that include members from different functions are known as cross-functional teams. Because of the success of early project teams, the belief is that a team will be a more creative and productive structure to face new challenges.

But hands-on management of the major thrust can be much more than a supplement to formal systems; it can become the primary shaping and guiding force of the enterprise. There are, it seems, approaches other than matrix which companies as successful as GM are using to achieve flexible, focused coordination. Sloan was the first to identify the conscious management of that shifting balance as the CEO’s key task.

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That confusion can show up with team members, too, if their roles and responsibilities aren’t clearly defined. And that confusion can lead to conflict if resources are hard to come by and competing managers are fighting for them. Given the numerous conflicting pressures on business, attempts at matrix-like (ie, multidimensional) solutions are inevitable. There is little systematic empirical evidence that matrix does or does not work.

Our reports include status reports, task reports, variance reports, availability reports and more. This is an all-encompassing project management software that suits everyone in the organization. In a strong matrix organization, the project manager has equal or more power than the functional manager. The project manager has control over resource planning and task management. In a weak matrix organization, the functional manager oversees all project management areas and is the highest authority in the decision-making process throughout the project.