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Matrix Organisational Structure

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Everything you need to know about Matrix Organisational Structure. Matrix Organisational Structure is a combination of functional organisation and project organisation (i.e. Matrix Organisation = Functional Structure + Project Structure).

It consists of groups of persons, drawn from various functional departments and deputed to work on a project under the guidance and direction of a Project Manager appointed by the top management.

According to Stanley Davis and Paul Lawrence, matrix organisation is, “Any organisation that employs a multiple command structure but also related support mechanisms and an associated organisational culture and behaviour pattern”.

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The matrix organisation may be followed where a large number of small projects have to be managed.

Learn about:- 1. Definition of Matrix Organization 2. Features of Matrix Organisation 3. Evaluation 4. Merits 5. Demerits 6. Conditions for Effective Matrix Organisation.


Matrix Organisational Structure: Definition, Features, Evaluation, Merits, Demerits and Conditions

Matrix Organisational Structure – Evaluation, Merits and Demerits

This is also called project organisation. It is a combination of all relationships in the organisation – vertical, horizontal and diagonal. It is mostly used in complex projects. It provides a high degree of operational freedom, flexibility and adaptability for both the line and the staff managers in performing their respective roles.

The main objective of matrix organisation is to secure a higher degree of coordination than what is possible from the conventional organisational structures such as – the line and staff.

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Figure 6.8 shows a president having three vice-presidents, each representing a functional area – production, finance, and sales. Additionally, there are two project managers for two locations A and B. The figure reveals that both the functional manager and the project manager exercise authority over those working in the matrix unit.

The president coordinates or balances power between the functional and the project managers. Each work group (represented by a square on the matrix) is held uniquely accountable to two supervisors.

Evaluation:

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The matrix organisation is increasingly used in high-technology enterprises but there are cases of many failures also. Matrix organisations have one striking advantage – flexibility and optimisation of resources. Work groups, along with its resources, can be shifted from one project to the other, depending upon the exigency.

When the project is completed, they return to their functional departments. The process of monitoring and controlling the work groups is easier since the workers are under the charge of one project manager from the beginning to the end.

One of the shortcomings of matrix organisation is that it does not observe the principle of ‘one employee, one superior’. However, as long as the managers are aware of their roles, things go well. In other words, the authority and responsibility relationships, in case of matrix organisation, need precise definition.

Otherwise, the workers suffer from the overlapping and conflicting authority and responsibility. Working with two taskmasters may, at times, result in suffocating, disgusting, and frustrating experience. This may lead to inertia and lack of motivation also. Much before this happens, it is advisable that the top management appoints a general manager (Projects) for coordinating the project managers and the functional managers to settle the differences, if any.

The matrix organisation can be evaluated in terms of the following merits and demerits:

Merits:

a. It offers operational freedom and flexibility.

b. It seeks to optimise the utilisation of resources.

c. It focuses on end results.

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d. It maintains professional identity.

e. It holds an employee responsible for management of resources.

Demerits:

a. It calls for greater degree of coordination.

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b. It violates unity of command principle.

c. It may be difficult to define authority and responsibility precisely.

d. Employees may find it frustrating to work with two bosses.


Matrix Organisational Structure – Features, Advantages and Limitations

Matrix organisation, also called grid organisation, is a hybrid structure combining two complementary structures namely, functional departmentation with pure project structure. Functional structure is a permanent feature of the matrix organisation and retains authority for the overall operation of the functional units.

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Project teams are created whenever specific projects require a high degree of technical skills and other resources for a temporary period. Functional departments create a vertical chain of command while the project teams form the horizontal chain. The functional or vertical line of authority intersects product or horizontal lines, thereby forming a matrix or grid.

Matrix organisation is a two dimensional structure, a combination of pure project structure and the traditional functional departments. Members of a particular project team are drawn from the functional departments and are placed under the direction of the project manager.

The project manager has overall responsibility for the success of the particular project. He has authority over the members of the project staff. On the completion of the project, the project team is dissolved and its members including the project manager revert or return back to their respective departments for reassignment to new projects. They may again be deputed to another project.

Features of Matrix Organisation:

The salient features of the matrix organisation are as follows:

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(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:

The advantages of matrix organisation are as under:

(i) The matrix structure is an efficient means for bringing together the diverse specialised skills required to complete a complex assignment or execute a project.

(ii) It is flexible in nature. 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.

(iii) It motivates personnel engaged in the project. They can utilise their competence and make maximum contribution for the execution of the project. It also improves communication and coordination by facilitating direct contact between the project manager and the functional groups.

(iv) It provides a balance between time, cost and performance. The balance can be achieved through the built-in checks and balances and the continuous negotiations carried on between project and functional personnel.

(v) It helps in improving flow of communication around the organisation as required information is communicated both vertically as well as horizontally.

(vi) It encourages specialisation and organisation gets benefits and economies arising out of specialisation since specialised central pools are created in the form of functional departments providing specialised services and resources to project units.

Limitations:

The limitations of matrix structure are as follows:

(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.


Matrix Organisational Structure – With Merits and Demerits

When multiple project operations of short duration are undertaken by an organisation, to execute them efficiently, matrix organisation structure is used.

Matrix organisation is a combination of functional organisation and project organisation (i.e. Matrix Organisation = Functional Structure + Project Structure). It consists of groups of persons, drawn from various functional departments and deputed to work on a project under the guidance and direction of a Project Manager appointed by the top management.

The Project Manager is given the necessary authority to complete the project assigned to him within the scheduled time and at a specified cost and in accordance with the quality and other conditions laid down by the top management. The Project Manager assigns work to the various functional groups and co-ordinates their activities and gets the project completed. After the completion of the project, he will report to the chief executive (i.e., top management of the organisation).

When the specified project is completed, various individuals drawn from various functional departments will go back to their respective departments for further assignment to other projects. Even the Project Manager goes back to the functional department for reassignment.

A matrix organisation is a permanent organisation structure designed to accomplish a specific project (or to achieve specific result) by using teams of specialists drawn from different functional departments within the organisation.

Merits:

1. It provides a flexible structure suitable for the requirements of changing conditions.

2. It helps to focus attention, talent and resources on a single project which facilitates better planning and control. Specialists from several functional departments provide a pool of expertise, particularly technical skill.

3. It provides an environment in which the professionals can test their competence and make maximum contribution.

4. It provides motivation to the project staff as they can focus directly on the completion of a particular project.

5. It ensures effective communication because of dual authority and multiple reporting.

6. The problem of co-ordination, which is quite serious in functional organisation, is minimized in a matrix organisation, because the Project Manager acts as an effective coordinator between the personnel of the different functional departments.

7. Each project is assigned the physical resources and personnel it requires. Thus, unnecessary duplication is avoided.

8. It contributes to the development of the Project Manager, as he is entrusted with work involving wider responsibilities.

9. As the Managers of the Project-team work on different projects, their knowledge and experience will certainly increase.

Demerits:

1. It violates the principle of unity of command. Each employee has two bosses—the Functional Boss and the Project Manager. During his assignment to a project, he works under the command of the Project Manager. In addition, he receives orders from his permanent supervisor. This may create confusion and conflict in the organisation.

2. It may contribute to conflicts between the members of the project team because of the heterogeneity of team members.

3. Frequent shifting of the staff of functional departments from one project to another may create problems in training new employees.

4. Though the problem of co-ordination is not quite serious here, still there remains the problem of co-ordination between the Project Manager and departmental heads.

5. Operating cost of matrix organisation seems to be on the higher side, because it is not only the functional departments and their heads but for every project a separate Project Manager is to be appointed and excessive overheads are incurred in respect of each project unit.

6. Dual reporting in the organisation also contributes to indiscipline, ambiguity and role conflict. It is because project representative, who is subject to dual command, cannot satisfy the priorities of both the bosses.

7. Unless the top management plays an active role in balancing power, matrix organisation may create power struggle among the people.

8. If the matrix organisation is not administered properly, there would be delays in decision-making, and project completion, as there are many persons involved in the decision-making process.

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.


Matrix Organisational Structure – Merits and Demerits

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.

Generally matrix organisation is known as grid. 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.

Merits:

Merits of matrix organisation are as follows:

1. Dual Benefit – It has the benefit of acquiring technical specialization as well as emphasizing on organisational goals, such as a combination of functional depart- mentation and purpose depart-mentation.

2. Better Planning and Control – It focuses the organisational resources on the specified projects thus, enabling better planning and control.

3. Environmental Adaptability – It is the most appropriate structure to respond rapidly to external change.

4. Development of Personnel – It provides an excellent framework for training and developing able and efficient managers, who under traditional structures, are subject to restricted functional specialization.

6. Better Motivation – Employees work with a high level of motivation since they put in their best efforts towards the accomplishment of a single project.

7. Flexibility – It is highly flexible as regards adherence to rules, procedures, etc. In this case, experience is the best guide to establishing rules and procedures.

Demerits:

Demerits of matrix organisation are as follows:

1. Complex Relationships – As the matrix organisation does not follow “one subordinate-one boss” principle, and an employee is often required to report to more than one superior, the result is likely to be a chaos in which subordinates are at a loss to identify their respective bosses.

2. Excessive Emphasis on Conflict Resolution – A matrix organisation sets a great store by identifying and confronting conflict situations, which are bound to arise for sharing of resources. However, too much of self-analysis and focus on resolution of conflicts may retard efforts toward accomplishment of objectives.

3. Excessive Emphasis on Group Decision-making – A matrix organisation requires joint decision-making, as regards sharing of organisational resources. In the absence of a spirit of accommodation and understanding, it may not always be possible to make quick decisions.

4. Power Struggle – Due to duality of command, intensive power struggle may arise between project and functional departmental heads, which may jeopardize an early completion of projects.

5. Heterogeneity – A matrix organisation is brought into being by temporary drafting of people, mainly professionals from diverse departments. It is, therefore, difficult to coordinate and control the functioning of a heterogeneous group, particularly, in the absence of a line authority.


Matrix Organisational Structure – Conditions for Effective Matrix Organisation

There are several departments under Matrix organisation. Each department is assigned with a specified task. The available resources of the organisation can be used by each department along with the co-ordination of other departments in an organisation.

According to Stanley Davis and Paul Lawrence, matrix organisation is, “Any organisation that employs a multiple command structure but also related support mechanisms and an associated organisational culture and behaviour pattern”. The matrix organisation may be followed where a large number of small projects have to be managed.

Conditions for Effective Matrix Organisation:

The matrix organisation can effectively function if the following conditions are present:

i. The principle of scalar chain of command is not followed in the matrix organisation. A project manager should give his report to more than one superior.

ii. 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.

iii. 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.


Matrix Organisational Structure – Advantages and Disadvantages

Matrix organization represents a middle course. Project and functional organizations exist side by side in a matrix structure. Matrix organizations are combination of vertical as well as horizontal relationships and are extremely useful in meeting the challenges of new and complex problems. According to Fred Luthans, “The matrix organization is a project organization plus a functional organization rather than a variation of a project organization”.

Advantages:

i. Matrix organisation provides the pooling of talent in interdepartmental and interdisciplinary projects.

ii. The services of qualified and experienced functional personnel can be utilized in a number of projects.

iii. Representative of different departments work together under the lateral coordinating influence of the project managers.

iv. There is the emphasis on timely completion of the projects.

v. The projects members retain their contract with their parent department.

vi. Top managers can delegate on-going decisions to project managers and leave themselves free to perform more urgent task.

vii. There is a big contribution in the process of decision-­making.

viii. Members of the organisation are exposed to new and complex problems, which enlarge their experience and provides them an opportunity to show their worth.

ix. Knowledge and experience can be transferred from one project to another.

Disadvantages:

i. Role ambiguity feature of matrix structure has an in-built mechanism for generating conflict between project and functional managers.

ii. Managers as well as subordinate are overburdened with work.

iii. The responsibility for the successful completion of a project lies squarely on the shoulders of the project manager while authority is shared between him and the functional heads.

iv. Authority and responsibility are overlapped.

v. It enlarges the organizational structure.

vi. It also violates the principle unity of command.


Matrix Organisational Structure – Advantages, Problems and Guidelines for Making Matrix Management Effective

Matrix organisation is also known as grid organisation, project or product management. The essence of matrix organisation is the combining of functional and product patterns of departmentation in the same organisation. Matrix organisation attempts to gain the strengths of both these forms of departmentalisation while avoiding the weaknesses.

An important feature of matrix organisation is that it violates the classical principle of unity of command. The employees in this organisation have two bosses-their functional departmental managers and their product managers. So this design has a dual chain of command. The diagram on next page explains the working of matrix design.

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. For example, the engineering group will be answerable to the senior executive in engineering as well as product line manager.

This kind of organisation generally occurs in construction, in aerospace (designing and launching a weather satellite), in marketing (advertising a campaign for a new product), in the installation of an electronic data processing system, in management consultancy firms where professional experts work together on a project.

Advantages:

Following are the main advantages of matrix design:

1. This design helps in co-ordination of various activities when a multiplicity of complex and independent activities are taken up in the organisation.

2. The matrix reduces the drawbacks of bureaucratic design. The dual lines of authority reduce the tendency of departmental heads to put their departmental goals first before the organisational goals.

3. The direct and frequent contact between different experts in the matrix can provide for better communication and more flexibility. The information reaches fast to those who need it.

4. The matrix facilitates the efficient allocation of specialists when specialists are confirmed to one department only, their talent remains under utilised.

Problems:

Following problems are faced in matrix organisation:

1. A state of conflict exists between functional and project managers as both compete for limited financial and human resources.

2. An imbalance of authority and power, as well as horizontal and vertical influence of the project and functional managers can also lead to problems in matrix organisation.

3. Because of potential conflicts, managers may want to protect themselves against blame by putting everything in waiting, which increases administrative costs.

4. This type of organisation requires many time-consuming meetings.

5. This design puts lot of pressure and stress on the individual employees. Dual unity of command introduces role conflict and unclear expectations introduce role ambiguity.

Guidelines for Making Matrix Management Effective:

Clemens suggests following guidelines for making this organisation 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.


Matrix Organisational Structure – How to Make Matrix Organisation Effective?

Definition of ‘Matrix Organization‘:

According to Stanley Davis and Paul Lawrence, matrix organization is “any organization that follows a multiple command system which includes not only the multiple command structure, but also related support mechanisms and an associated organizational culture-behavior pattern.”

A matrix organization has two chains of command. One chain is functional. It has vertical flow of authority, in other words, superiors order and subordinates comply. The second chain is horizontal, under which subordinates working in different fields of activities exchange ideas and suggestions with the project/group manager who is an expert in his area of activity.

Businesses for which Matrix Organization is Best Suited:

Businesses engaged in building construction, weapon manufacture, aerospace and high technology areas stand to gain the most by employing matrix organization form.

Distinction between ‘Project’ and ‘Matrix’ Organization:

A matrix organization somewhat resembles a project organization but with certain differences. An import­ant difference is that in a project organization there are separate divisions or departments, each responsible to complete a specific task and also allocated resources to be exclusively used by them.

In a matrix organi­zation also there are separate departments for each specified task, but these departments are not allocated exclusive use of any resources—each department has to share these resources with the rest of the departments.

Another point of difference is that while a project organization is most effective only for completing a small number of large projects, only matrix organization is the answer where a large number of small projects have to be completed, because then the benefits of the skills possessed by functional departments of parent organization will be available to all projects.

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.

Merits of Matrix Organization:

(1) Dual Benefit:

Matrix organization is a combination of functional departmentation and purpose departmentation, the first providing technical skills and the other keeping the organization focused on completion of the assigned project.

(2) Facilitates Efficient and Effective Planning and Control:

Matrix organization focuses the organizational resources on specified projects, thus enabling better planning and control.

(3) Valuable Tool to Respond to Environmental Changes:

Matrix organization is the most appropriate structure to respond quickly to external change. For exam­ple, to beat the actions of a competitor, matrix organization may be used to meet customer demand for a better quality product at competitive price, without affecting the marketing of existing products.

(4) Flexibility:

Matrix organization is appropriately flexible as regards adherence to rules, procedure etc. of the parent organization. As its staff is drawn from the parent organization, they are familiar with the organiza­tional practices.

(5) Focus on Assigned Task:

As a department or division of the parent organization, a matrix organization is well equipped to direct its efforts to accomplish the assigned project or task. This also greatly motivates its employees.

(6) Development of Personnel:

Matrix organization provides an excellent framework for training and developing able and efficient managers who, under traditional structures, are subject to restricted functional specialization.

Demerits of Matrix Organization:

(1) Complex Relationships:

As a matrix organization does not follow “one subordinate-one boss” principle, and an employee is required to report to more than one superior, the result is likely to be anarchy in which subordinates are at a loss to identify their respective bosses.

(2) Tussle between ‘Project’ and ‘Functional Departments’:

Due to duality of command, power struggle may arise between project and functional departmental heads. This may adversely affect timely completion of assigned projects.

(3) Conflict Arising from Sharing of Resources:

A matrix organization requires joint decision-making as regards sharing of organizational resources. In the absence of spirit of understanding, it may not always be possible to make quick decisions, so vital for the successful completion of projects. Too much of democracy may mean inadequate action.

(4) Staff having Different Social and work Backgrounds:

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. Coordination and control become victims of such a situation.


Matrix Organisational Structure – Advantages and Limitations

This is an organisational structure in which each employee reports to both functional manager and group manager. This is a “Multiple Command System.” Workers will have two bosses. They work in two chains of command. In matrix organisation, two types of structure operate simultaneously. One is vertical structure and the other is horizontal. In vertical structure, the command moves vertically and in horizontal, the command moves horizontally. As the business activity is becoming more and more global, matrix organisations, which are complex in nature, are emerging.

An Incident — Matrix Organisation:

A leading IT Company of India is exporting its products to three countries say – (i) Bangladesh, (ii) Nepal and (iii) Sri Lanka. The basic product being same, there is slight change in product features exported to three countries. Product being X, it is XB for Bangladesh, XN for Nepal and XS for Sri Lanka. The workers working to produce these products report to two authorities – (i) The Departmental Head in India where the product is produced and (ii) The Country Manager (Second Process) to which country the product is exported. This reduces several problems of production and product acceptance in the country to which it is exported.

It may be observed that functional managers and their workers interact with each country manager regarding individual products are concerned. Workers look at functional managers for general policy solutions and country managers for individual product policy.

Advantages of Matrix Structures:

1. It is an efficient means of bringing together the diversified specialized skills required to solve a complex problem. Authority and responsibility are shared. Stress is distributed.

2. There will be many problems in functional designs. In matrix organization, it is minimized as people work together on various diversified issues. Workers of both teams acquire realistic attitude about the work as they work together. For example, if hardware people and software people work together, they can produce better systems. Many problems will be solved in the process. The structure balances the time, cost and performance. Information is shared.

3. Matrix structure provides a great deal of cost-saving flexibility. Duplication of work is avoided. Resources are shared.

4. Conflicts are less in this structure.

Limitations:

1. Workers do not easily adapt to a matrix system as members may not possess interpersonal skills and may be conservative in their attitude. This increases stress and confusion in workers.

2. If hierarchies are not firmly fixed, there will be the danger of conflicting directives and ill-defined responsibility. This increases conflict between managers and between managers and workers.

3. They are suitable only to large organisation and projects.

4. Decision-making will be slow.


Matrix Organisational Structure – Features, Merits and Limitations

Another kind of divisionalisation is matrix or grid organizational structure. This is useful when the functional or product organisational structure fails to meets all the requirements of an organisation. In a functional structure, specialized skills may become increasingly sophisticated but coordinated production of goods may be difficult to achieve.

In a divisional structure, various products may flourish while the overall technological expertise of the organisation remains undeveloped. This type of structure attempts to combine the benefits of both types of designs while avoiding their drawbacks. The essence of matrix organisation is the combining of functional and project or product pattern of departmentalization in the same organisation structure.

Matrix Organization is created by merging the two complementary organization, the project and functional, it represents the combination of functional and project organization.

Matrix organization has been defined as “any organisation that employs a multiple command system that includes not only the multiple command structure but also related support mechanism and an associated organisational culture and behavioural pattern.”

Matrix Organisation = Structure + Systems + Culture + Behaviour

In it, projects cut across the functional lines. The project teams are composed of people from the functional departments who are assigned to the project for a specific period or for the duration of the project. When their assignment is completed they return to the functional departments to which they belong.

Matrix Organisation = Pure Project Organisation + Functional Organisation.

In multiple command system, one chain of command is functional and the second is project which depicts a project team, led by a project or group manager who is expert in the team’s assigned area of specialization.

Features of Matrix Organization:

The important features of the matrix organisation are given below:

(1) Matrix organisation is built around a specific project. The change 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 drawn personnel from various functional departments. He assigns work to the various functional groups. Under completion of project, the functional groups return to their functional departments for reassignment to other projects. The project manager himself is also available for reassignment of divisional manager.

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

Project managers have to determine –

(i) What efforts are required to accomplish the given projects?

(ii) When will it be performed?

(iii) How much is budgeted?

Functional managers determine –

(i) Who will perform the specific tasks?

(ii) How will they be accomplished?

(iii) How will are they accomplished?

When the organisation has a variety of project, ranging from large to small, it is often desirable to use matrix structure. It has been developed to meet the needs of large and complex organisations which require move flexible and technically oriented structure. It is used in industries with highly complex products as in aerospace industry where project teams are created for specific space and weapon systems.

Matrix form of organisation is of recent origin and its application is being widespread, i.e., service organisations, manufacturing organisation, non-profit organisation and professional organisations.

Merits of Matrix Organization:

The merits of matrix organization are as follows:

The matrix structure is often an efficient means for bringing together the diverse specialized skills required to solve a complex problem.

1. It is flexible in nature. 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.

2. It motivates personnel engaged in a project. They can utilize their competence and make maximum contribution for the execution of the project. It also improves communication and coordination by facilitating direct contact between the project manager and the functional groups.

3. It provides a balance between time, cost and performance. The balance can be achieved through the built in checks and balances and the continuous negotiations carried on between project and functional personnel. It frees the top management for planning. The distribution of authority and status is more in agreement with professionals who work in a project.

Limitations of Matrix Organization:

In fact, matrix form lends itself to some problems:

1. A state of conflict exists between functional and project managers, as both compete for limited resources. Moreover, members of the project team may encounter role ambiguity.

2. Role conflict, role ambiguity and role overload may result in stress for the functional and project managers as well as for the team members.

3. An imbalance of authority and power, as well as horizontal and vertical influence of project and functional managers, can also lead to problems.

4. Morale can be adversely affected by personnel rearrangements when projects are completed and new ones are begun.

5. It requires many time-consuming meetings.

6. It is costly to implement.

7. It requires high interpersonal skills.


Matrix Organisational Structure

Organization is an instrument, a powerful tool designed to fill certain specific organizational needs. As the organization grow the needs of the organization also changes. Then we seek new ways to organize the things to suit to new conditions.

The following social and technological changes press the need for new organizational design:

(i) Rapid technological change and complexity are fostering matrix organizations.

(ii) The magnitude of some corporate commitments is leading to external, independent staff.

(iii) Increasing involvement in social issues the need for existence of a president’s office.

(iv) Current success of organized pressure groups raises the question of how to deal with the interest representation.

(v) Fascination with electronic computers calls for examination of the impact of computers on organization.

In addition to the above many more social and environmental changes impinges on organization and show how a basic social institution such as managerial organization is adapted rather than scrapped.

Matrix organization was used while dealing with a problem of launching a rocket in space. Along with space program it had its own applications in variety of enterprises. Matrix organization is based on the need for coordinated, focused action. A drawback of the typical organization with functional departments is that unusual, complex projects often get shunted about, progress slowly and are the cause of endless meetings of key executives representing the various departments. The more unique and complicated the project, the more likely is fumbling to occur.

Matrix organization strives to:

(a) Ensures the coordinated, focused attention that such projects require, and

(b) At the same time retain the benefits of specialized expertise and capabilities that only functional departments can provide.

For example, when a project needs special materials, special and highly specialized knowledge and guidance to complete the project within the stipulated time and at a reasonable cost, the matrix organization will provide a solution. For organizations involved in manufacturing nuclear reactors, special aircrafts and defense needs, heavy-equipment manufacturing, matrix organization chart is very useful.

The matrix organization proposes to make a manager responsible for a project or a clear-cut mission and then to assign from each of the functional departments the talent needed to complete the mission. When a functional specialist is working on the project he looks to the project manager for direction i.e. he is out on loan. When the project is finished, or when he is no longer needed, each man returns to his functional departments for assignment to other duties.

The project manager must rely heavily on these assigned men for counsel and decision in their respective areas. If the team is small, its members will have frequent contact with one another and will be fully informed of the current status of the project. In these circumstances most of the coordination will be voluntary. From time to time, though, trade-off decisions may be necessary, and the project manager will make these decisions.

The personal relations within a project team are delicate. Although the project manager is the nominal boss, each member of his team is on temporary assignment and will return to his functional department where his long-run career is primarily determined. To draw the best from his group, the project manager must therefore rely on both the challenge of the job and his personal leadership.

Because of this heavy reliance on voluntary cooperation, project teamwork best on projects for which the quality of the finished product or service, its deadline, and its cost are clearly specified. Usually a functional department does more than supply the project team with its members. It also provides back up service. The matrix organization utilizes the blend of specialized knowledge of project manager and the experience of functional departments to complete complicated products/projects/services in an optimal way.


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