Organization Matrix Structure

It’s recommended to have an organizational structure in place to accurately define the activities in a project. Projects have many activities, from task allocation to budgeting and everything in-between. Therefore, that organizational structure shouldn’t be rigid, but efficient, flexible and possibly innovative.

Every organization is structured in some way, and that structure is determined by the organization’s objectives. 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.

Matrix organizational structure is often used in project management because it speaks 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.

The matrix organizational structure is a combination of two or more types of organizational structures. The matrix organization is the structure uniting these other organizational structures to give them balance. Usually, there are two chains of command, where project team members have two bosses or managers.

Often, one manager handles functional activities and the other is a more traditional project manager. These roles are fluid and not fixed, as the balance of power between these two kinds of managers isn’t organizationally defined.

It will employ the best of both structures and management styles to strengthen strengths, and make up for weaknesses. This way, if an organization is working on producing two products or services at the same time, they can organize both and use that duality to their advantage through the matrix organizational structure.

The salient features of the matrix organisation are as follows:

(1) Matrix organisation focuses attention on specific projects. The charge of the project is given to the project manager who is given the necessary authority to complete the project in accordance with the time, cost, quality and other conditions communicated to him by the top management.

(2) The project manager draws groups of personnel from various functional departments. He assigns work to the various functional groups. Upon completion of the project, the functional groups return to their respective departments for reassignment to other projects. The project manager himself is also available for reassignment by the division manager.

(3) Both the project and the functional managers have different roles. The project manager exerts a general management viewpoint with regard to his project. Each functional manager is responsible for maintaining the integrity of his function.

(4) Management by project objectives is paramount to the way of thinking and working in a matrix organisation.

The matrix organisation structure depicts that the workload of the Construction Division is composed of various projects each with specific objectives and a well-defined period of completion. This Division has certain functional departments each of which provides functional support to the Division projects. The project manager is given the authority and responsibility for the achievement of project objectives.

The functional work-groups for each project are assigned on a full time basis from their functional departments. When the project is completed or when their services are no longer required, they are assigned back to their parental departments. The level of participation by various work-groups depends upon the nature of each project. The combination of people and resources that can best jointly pursue the project goals also change from time to time in each project.

The distinction between project and matrix organisations should be clearly understood. In a pure project organisation, complete responsibilities for the task as well as all the resources needed for its accomplishment are usually assigned to one person designated as Project Manager. In large projects, the organisational units for projects resemble a regular division, generally autonomous. But in a matrix organisation, the project manager does not have complete authority for use of resources. Instead the shares them with the rest of the enterprise.

Advantages

One of the biggest pros of using a matrix organizational structure is that it allows the sharing of highly skilled resources between functional units and projects. Communications are open, which helps knowledge move throughout the organization with less obstruction. Because the matrix organizational structure fosters better communications, it makes the normal boundaries between groups more porous, which allows for more collaboration and an integrated, more dynamic organization.

This structure can serve as a great boon for employees who are looking to widen their experience and skill sets. They can be part of many different aspects of various projects. It puts them in an environment that facilitates learning and gives them an opportunity to grow professionally.

Plus, the functional departments have highly skilled people, and those people are available to help the project team if needed. This creates a pool of valuable resources that can be dipped into and provides more flexibility to resolve issues without having to source new resources.

Furthermore, efficiencies are enhanced, and teams remain loyal because the structure provides a more stable environment where job security is strengthened. People work harder and have more buy-in to projects when they feel the rug isn’t going to get pulled out from under them.

1. It offers operational freedom and flexibility.
2. It seeks to optimise the utilisation of resources.
3. It focuses on end results.
4. It maintains professional identity.
5. It holds an employee responsible for management of resources.

Disadvantages

There can be some confusion when a team member is subject to two managers. That can also create unnecessary conflict. This is especially true if both managers have equal authority.

Then there is the functional manager and project manager. There can be some sparks flying between these two managers in terms of what they believe to be the authority in the organization. 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.

There are a lot of managers in a matrix organizational structure, which is not to everyone’s liking. And there can be a financial downside to that too. Having more people in managerial positions is going to have an impact on the organization’s bottom line.

Team members can feel the strain of working in a matrix organizational structure, in that their workload can be heavy. Often, they’re tasked with their regular assignments and then additional work, which can lead to burnout or some tasks being ignored.

Finally, there’s the overall expense of the matrix organizational structure. This goes beyond having multiple managers but also the added expense of keeping on resources that might not be used all the time.

Not that some of these disadvantages can’t be overcome. They just require being cognizant of the stress points and working more cooperatively towards relieving them.

Demerits:

1. It calls for greater degree of coordination.
2. It violates unity of command principle.
3. It may be difficult to define authority and responsibility precisely.
4. Employees may find it frustrating to work with two bosses.

Limitations:

(i) The matrix organisation violates the classical principle of unity of command. The personnel from functional departments have to face the situation of two bosses, project manager and functional manager. As a result, a functional group may side track his responsibility easily if project unit fails in achieving its goal.

(ii) In matrix organisation, the problem of coordination is more complicated because neither functional head has an authority over project unit in a direct manner nor the project manager has full authority over project activities. The project manager works as coordinator and facilitator but without required authority.

(iii) Matrix organisation is not a homogeneous and compact group. The multiplicity of vertical and horizontal relationships may impair organisational efficiency. Deputationists may try to emphasise their own specialisations at the cost of the overall project. There is lack of jurisdictional clarity.

(iv) Apart from formal relationships, informal ones also operate in the matrix organisation. Thus, organisational relationships become more complex and they create the problem of co-ordination.

(v) Dual reporting relationship in matrix organisation can contribute to indiscipline, ambiguity and role conflict. The functional representative who is subject to dual command cannot satisfy the priorities of both the bosses.

(vi) Each project manager is charged with the successful implementation of his project. For this, each project manager has to share resources with other project managers. This might create rivalry between various project managers.

Guidelines for Making Matrix Management Effective:

1. Define the objectives of the project or task.
2. Clarify the roles, authorities and responsibilities of managers and team members.
3. Ensure that influence is based on knowledge and information, rather than on rank.
4. Balance the power of functional and project managers.
5. Select an experienced manager for the project who can provide leadership.
6. Undertake organisation and team development.
7. Install appropriate cost, terms and quality controls that report deviations from standards in a timely manner.
8. Reward project managers and team manager fairly.

How to Make ‘Matrix Organization’ Effective:

(1) Replacement of Unitary Command with Multiple Command Structure:

The classical scalar chain of command (under which each subordinate has only one superior) has to give place to multiple command structure where one project manager has to report to more than one superior.

(2) Sharing of Organizational Resources:

There should be a mutually acceptable understanding among key managers on sharing of physical, financial and human resources for completing the task assigned to them each. This is because in a matrix organization no manager has authority to exclusive use of any resource he has to share it with others.

(3) Mechanism to Resolve Differences over Sharing of Resources:

There should be a conflict-resolution mechanism when two or more managers need a particular resource at the same time. If such conflict situation is kept unaddressed for long, it may be detrimental to the units handling particular projects, as also the organization as a whole.