One of the biggest management innovations to emerge in the past 30 years has been the matrix organizational structure. Matrix management is a hybrid organizational structure in which a horizontal project management structure is “overlaid” on the normal functional hierarchy.

The matrix organizational structure

In a matrix system, there are usually two chains of command, one along functional lines and the other along project lines. Instead of delegating segments of a project to different units or creating an autonomous team, project participants report simultaneously to both functional and project managers.

Companies apply this matrix organizational structure in a variety of different ways. Some organizations set up temporary matrix systems to deal with specific projects, while “matrix” may be a permanent fixture in other organizations. Let us first look at its general application of this organizational structure and then proceed to a more detailed discussion of finer points.

Consider the figure below. There are three projects currently under way: A, B, and C.

organizational structure
Matrix Organizational Structure

All three project managers (PM A, B, C) report to a director of project management, who supervises all projects. Each project has an administrative assistant, although the one for project C is only part time.

Project A involves the design and expansion of an existing production line to accommodate new metal alloys. To accomplish this objective, project A has assigned to it 3.5 people from manufacturing and 6 people from engineering. These individuals are assigned to the project on a part-time or full-time basis, depending on the project’s needs during various phases of the project.

Project B involves the development of a new product that requires the heavy representation of engineering, manufacturing, and marketing. Project C involves forecasting changing needs of an existing customer base. While these three projects, as well as others, are being completed, the functional divisions continue performing their basic, core activities.

The matrix organizational structure is designed to optimally utilize resources by having individuals work on multiple projects as well as being capable of performing normal functional duties. At the same time, the matrix approach attempts to achieve greater integration by creating and legitimizing the authority of a project manager.

In theory, the matrix organizational structure provides a dual focus between functional/ technical expertise and project requirements that is missing in either the project team or functional approach to project management. This focus can most easily be seen in the relative input of functional managers and project managers over key project decisions.

Different Matrix Forms

In practice there are really different kinds of matrix systems, depending on the relative authority of the project and functional managers. Here is a thumbnail sketch of the three kinds of matrices:

Weak matrix

This form is very similar to a functional approach with the exception that there is a formally designated project manager responsible for coordinating project activities.

Functional managers are responsible for managing their segment of the project. The project manager basically acts as a staff assistant who draws the schedules and checklists, collects information on status of work, and facilitates project completion. The project manager has indirect authority to expedite and monitor the project. Functional managers call most of the shots and decide who does what and when the work is completed.

Balanced matrix

This is the classic matrix in which the project manager is responsible for defining what needs to be accomplished while the functional managers are concerned with how it will be accomplished. More specifically, the project manager establishes the overall plan for completing the project, integrates the contribution of the different disciplines, sets schedules, and monitors progress.

The functional managers are responsible for assigning personnel and executing their segment of the project according to the standards and schedules set by the project manager. The merger of “what and how” requires both parties to work closely together and jointly approve technical and operational decisions.

Strong matrix

This form attempts to create the “feel” of a project team within a matrix environment. The project manager controls most aspects of the project, including scope trade-offs and assignment of functional personnel. The project manager controls when and what specialists do and has final say on major project decisions.

The functional manager has title over her people and is consulted on a need basis. In some situations a functional manager’s department may serve as a “subcontractor” for the project, in which case they have more control over specialized work.

Matrix Organizational Structure Strengths

Matrix organizational structure both in general and in its specific forms has unique strengths and weaknesses. The advantages and disadvantages of matrix organizations in general are noted below, while only briefly highlighting specifics concerning different forms:

Efficient. Resources can be shared across multiple projects as well as within functional divisions. Individuals can divide their energy across multiple projects on an as-needed basis. This reduces duplication required in a projectized structure.

Strong Project Focus. A stronger project focus is provided by having a formally designated project manager who is responsible for coordinating and integrating contributions of different units. This helps sustain a holistic approach to problem solving that is often missing in the functional organization.

Easier Post-Project Transition. Because the project organization is overlaid on the functional divisions, specialists maintain ties with their functional group, so they have a homeport to return to once the project is completed.

Flexible. Matrix arrangements provide for flexible utilization of resources and expertise within the firm. In some cases functional units may provide individuals who are managed by the project manager. In other cases the contributions are monitored by the functional manager.

Matrix Organizational Structure Weaknesses

The strengths of the matrix organizational structure are considerable. Unfortunately, so are the potential weaknesses. This is due in large part to the fact that a matrix organizational structure is more complicated and the creation of multiple bosses represents a radical departure from the traditional hierarchical authority system. Furthermore, one does not install a matrix structure overnight. Experts argue that it takes 3—5 years for a matrix system to fully mature. So many of the problems described below represent growing pains:

Dysfunctional Conflict. The matrix organizational structure is predicated on tension between functional managers and project managers who bring critical expertise and perspectives to the project. Such tension is viewed as a necessary mechanism for achieving an appropriate balance between complex technical issues and unique project requirements. While the intent is noble, the effect is sometimes analogous to opening Pandora’s box. Legitimate conflict can spill over to a more personal level, resulting from conflicting agendas and accountabilities. Worthy discussions can degenerate into heated arguments that engender animosity among the managers involved.

Infighting. Any situation in which equipment, resources, and people are being shared across projects and functional activities lends itself to conflict and competition for scarce resources. Infighting can occur among project managers, who are primarily interested in what is best for their project.

Stressful. Matrix management violates the management principle of unity of command. Project participants have at least two bosses—their functional head and one or more project managers. Working in a matrix environment can be extremely stressful. Imagine what it would be like to work in an environment in which you are being told to do three conflicting things by three different managers.

Slow. In theory, the presence of a project manager to coordinate the project should accelerate the completion of the project. In practice, decision making can get bogged down as agreements have to be forged across multiple functional groups. This is especially true for the balanced matrix organizational structure.

Differences between matrix forms.

When the three variant forms of the matrix approach are considered, we can see that advantages and disadvantages are not necessarily true for all three forms of matrix.

The Strong matrix is likely to enhance project integration, diminish internal power struggles, and ultimately improve control of project activities and costs. On the downside, technical quality may suffer because functional areas have less control over their contributions. Finally, projectitis may emerge as the members develop a strong team identity.

The Weak matrix is likely to improve technical quality as well as provide a better system for managing conflict across projects because the functional manager assigns personnel to different projects. The problem is that functional control is often maintained at the expense of poor project integration.

The Balanced matrix can achieve better balance between technical and project requirements, but it is a very delicate system to manage and is more likely to succumb to many of the problems associated with the matrix organizational structure.

Image courtesy of Freepik

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