Matrix Organization: Advantages

Many businesses have turned to a matrix organization structure to track use of resources across traditional functional, departmental, and product line boundaries. A matrix can also map micro-organizations such as project and team structures within an overall organizational structure. In both cases, a main goal is to save money by avoiding duplication of effort.

The Matrix type of organization has several advantages. The matrix can be very effective in a complex, changing environment. Many high-tech companies use the matrix structure to adapt quickly to fast-changing markets. In the matrix, meetings are very common and they allow new issues to be raised and problems to be solved. In the matrix, employees can be transferred from one division to another easily. The matrix also enables the sharing of new experiences, methods of handling problems, skills among employees. In addition, in the matrix employees clearly know who is responsible for the success of the project. The matrix structure also makes possible the participation of workers in team meetings, discussions and in the attainment of divisional objectives. This means that in the matrix organization employees are motivated because they have relatively larger tasks.  Finally, this type of organization is best suitable for global organizations, as in such organizations managers can effectively achieve goals and be flexible enough to adapt to changing environments.

The advantages of the matrix can be summarized as follows:

Pros of the matrix organization:

· More efficient use of resources than a single hierarchy

· Flexibility, adaptability to changing environment

· Development of general and specialist management skills

· Cooperation between departments

· Expertise available to everyone in the organization

· Clear responsibility

· Enlarged tasks for employees

· Better suitable for global companies

Matrix Organization: Disadvantages

Like any organizational form, the matrix has its disadvantages. The major problem is the confusion and annoyance caused by the twofold chain of command. Often employees do not know for sure to whom and how to report. Potential conflicts can arise concerning the division of authority. The different styles of the matrix described in the outline of organizations are not clearly stated in the organizational charters and this may cause disputes. In global organizations the matrix can cause conflicts related to functional goals of the company and the country’s goals. The third disadvantage is that much time is lost to meeting and discussions dedicated to resolving conflicts. This is true because when the relationships among the departments of a company becomes tense it is really hard to come to a compromise. In fact, many companies that have used the matrix have blamed the structure for wasting time in heated debates and discussions rather than actions to attain the companies’ goals. Managers in the matrix need human relations training to learn to work with two bosses, which is not easy and requires a lot of time and effort. For many organizations, it is difficult to keep the power balanced between the functional and divisional sides of the matrix.

Last, opponents to matrix management believe that it is a dated method to organize a company.¹³ The belief in the 70's and 80's was that a matrix organization would be the best way to manage project complexity. This has been proven untrue over the years by the failures of companies such as IBM, HP, and AT&T.

The summary of disadvantages of the matrix structure is provided below:

Cons of the matrix structure:

· Frustaration and confusiona from dual chain of command

· Conflicts between two sides of the matrix

· Many meetings and discussions

· Human relations skills needed

· Difficult to maintain the power balanced

· Out-of-date method

Conclusion

Previously, before the matrix structure came about, most large corporations had been structured in departments. These departments were logical partitions of the company and any given groups of employees reported to the head of the department. In the 1970s, companies began to restructure its employees into a matrix organization, mainly with the intent of developing project managing units.

Even though the matrix structure has some disadvantages, matrix organizations provide clear accountability within a specific business function and allow more efficient allocation of specialized skills across the entire business. By taking advantage of the shared services and skills and not having to develop and manage those skills themselves, the divisional or product line organizations can better focus on their core business objectives. This last point was one of the original driving forces behind the development and popularization of matrix organizations. Today, matrix organizations are used to describe more than just the product-based organizations. For example, many IT project managers use smaller matrix-style structures for project and team organizations to track skills, tasks, and resources across multiple projects to ensure skills and resources are used properly. The matrix structure has also been used at Microsoft, and there are more than 5,000 project managers there out of more than 50,000 total employees.¹⁴ To sum up, if used properly by companies through clearly defining each manager’s duties, continuously being improved to meet the organization’s needs, the matrix is probably  the most suitable structure for middle-sized and large organizations.

References

1. Boone E. Louis, Kurtz L. David: Contemporary Business, 1996.

2. “Organizational Structure”, http://en.wikipedia.org/wiki/Organizational_structure

3. Allen, 1970, p. 63.

4. Gerald A. Cole, Management Theory and Practice,2004, p. 192.

5. Boone E. Louis, Kurtz L. David: Contemporary Business, 1996, p.206-207.

6. Keeling and Kallaus, 1996,p. 43.

7. Boone E. Louis, Kurtz L. David: Contemporary Business, 1996, p.206.

8. www.pg.com

9. www.harvard.edu

10.  Richard L. Daft, Management, p.334.

11. Organizational Structure”, http://en.wikipedia.org/wiki/Organizational_structure

12.  Galbraith, 1971

13.  “Matrix Management” , http://en.wikipedia.org/wiki/Matrix_management

14.  Scott Berkun: The Art of Project Management, p. 13

Bibliography

Boone E. Louis, Kurtz L. David: Contemporary Business, Orlando, FL: The Dryden Press, 1996

Richard L. Daft: Management, Orlando, FL: The Dryden Press, 1997

James M. Higgins: The Management Challenge, New York, Macmillan College Publishing Company, 1994

Gerald A. Cole: Management Theory and Practice, London: Thomson Learning, 2004

Scott Berkun: The Art of Project Management, The USA: O’Reilly Media, Inc., 2005