Matrix Organizational Structure – A Quick Guide

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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.

diagram illustrating what matrix organizational structure is

What Is Matrix Organizational Structure?

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.

Origins of the Matrix Organizational Structure

The matrix organizational structure came about as a business response to the rise of large-scale projects. They needed fast-track technology applications and required the ability to process great amounts of data in an efficient manner. An organizational structure was needed to respond quickly to interdisciplinary needs, without upsetting the functional organizational structures already in place.

Matrix organizational structures were first developed in the aerospace industry in the U.S. as projects grew in complexity during the mid-century. Until that point, they had been using a single hierarchical organization, which was fine when there was only one very large project.

However, with more and more projects having a variety of sizes and complexities, there was a need for expanding beyond one discipline. So, as time went on, the use of one discipline to structure a project become increasingly rare. But there remained a need for a single source of information and responsibility for each project. Therefore, instead of creating many autonomous projects, a matrix of projects was developed.

Pros and Cons of a Matrix Organizational Structure

A matrix organizational structure is not a one-size-fits-all solution. There are advantages and disadvantages that need to be understood to know if it’s the right one for the organization.

Pros

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.

Cons

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.

Why Use a Matrix Organizational Structure?

The matrix organizational structure is an answer to the problem of managing large and complex projects. When working on a large project, a highly hierarchical structure can be an obstacle in the path of moving that process forward successfully.

Instead of trying to find a workaround to a situation that might not have a viable solution, a matrix organization structure provides a new system that can more properly address the complexities of large projects.

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 perspective at the top is distorted, while a matrix organizational structure can see a problem from a closer standpoint and have varied approaches of solving it.

The matrix organizational structure is more catholic in that it acts as if there is not a single best way to organize a project. It sees alternatives rather than one established way forward.

When dealing with projects of immense size and complexity, a matrix organizational structure can give you an advantage, but only if you and your team are equipped with powerful tools. ProjectManager.com is a cloud-based software that is built to manage projects of all sizes and levels of complexity. Its real-time data keeps managers updated and gives teams a collaborative platform. Try it today with this free 30-day trial.

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