Advantages and Disadvantages of Matrix Organizational Structure

Advantages and Disadvantages of Matrix Organizational Structure

Overview

There are ways in which an organization is constituted. It may depend on the nature and purpose of the company. Apart from this, it also depends upon the style of the owner as to how he wishes to structure the company. This includes the traditional hierarchy model where the subordinates are responsible to one superior. However, in the case of matrix organizational structure, it differs from the traditional hierarchical structure. See Advantages and Disadvantages of Matrix Organizational Structure.

What is Matrix Organizational Structure?

With the expanding nature of business, it has often been seen that various departments of a company have to coordinate their actions together for a project or a campaign.

A matrix organizational structure is a structure where the work of two or more departments is infused. It is often characterized by a system where the subordinates usually report to more than one manager or head.

For instance, the launch of a new product requires the marketing and the administrative department to work together. It would require the staff of this project to report to their project manager along with the heads of their respective departments.

It may look haphazard at first, but it can produce great results.

Jeff Bezos Career Advice
Jeff Bezos Career Advice

Advantages of Matrix Organizational Structure

Matrix organizational structures are frequently adopted by companies running multiple projects at the same time so that resources are distributed accordingly. This structure can be extremely helpful. Some of the advantages of matrix organizational structure are as follows:

Proper Utilization of Resources

The matrix organizational structure ensures that there is efficient utilization of resources as the team consists of members who come from their specialized fields. Moreover, this structure eliminates additional costs of hiring, etc., as the team already has all the experts required.

Less Prone to Risk

The shortcomings that may go unnoticed by the overall project managers can be highlighted by the functional managers, as they have a more profound knowledge of their departments. As a result, a company can be saved and can be prevented from greater damage.

Unlimited Flow of Ideas

One of the biggest benefits of matrix organizational structure is that there can be an unlimited flow of creative ideas and information. This is because when the minds of experts of different fields come together, many unique themes and ideas emerge after everybody’s inputs are received.

Practical Training

In a matrix structure, the employee getting the position of the project manager has the opportunity to grow and enhance skills as a leader with the responsibility of a whole project. Apart from this, the members of the team also get to learn how to work with cross-departments.

Strengthens Project’s Performance

When specialists of different departments work together as a team, they ensure that the project is perfect from every aspect. Moreover, the checking and reporting of work by the project manager and the functional managers of their respective fields ensures negligible mistakes(if any at all) on the part of the employees. As a result, the efforts on the part of the team and its managers strengthen the project’s performance.

Greater Autonomy to the Team

Unlike the traditional hierarchy structure, which gives greater emphasis to command and authority of the superiors, matrix structure emphasizes the greater autonomy and absorption of inputs from the team members. This aspect gives matrix structure an edge over the others, as it helps boost the teammates’ confidence by giving them value and welcoming their ideas.

Disadvantages of Matrix Organizational Structure

Like any other thing or concept, matrix organizational structure also has disadvantages along with its many advantages. Some of the shortcomings of the matrix organizational structure include:

Chaotic Environment

A team often faces the issue of chaos and confusion when it comes to reporting about the work to the managers. Sometimes, it turns out to be more exhaustive to have multiple managers to report to, as it takes a lot more time. It can also lead to inefficiency at work and is, therefore, one of the biggest disadvantages of matrix organizational structure.

Delayed Decisions and Responses

The complex nature of matrix organizational structure involves many people at many levels. Therefore, it may cause a delay in sending and receiving information as it has to go through many people and positions. Such delays in decisions and responses may lead to a slow pace of project progression. Hence, it is one of the major drawbacks of matrix organizational structure.

Conflicting Mindset

 One of the major problems of matrix organizational structure is the conflicting styles and mindsets on which the managers work. It has often been observed that the ideas of the project manager and various functional manager conflicts, which often places the team members in a dilemma. They end up clueless as to whose order to follow and proceed.

Overburden for Team Members

In a matrix organizational structure, there is more than one manager. It means that the members are accountable to both the project manager and the functional manager. The team members often feel overburdened, as they have to not only report to all the managers but also work on the suggestions and feedback given by their bosses.

In some situations, it may also lead to friction, which can be prevented by proper communication between the heads. Also, there must be adequate communication between the team, and the goals and objectives of the project should be made clear from the very beginning.

A Surge in Overhead Costs

Matrix organizational structure requires the involvement of multiple heads and managers along with experts in the team. As a result, it can often lead to increased overhead costs, add costs to the budget and impact the company’s finances.

An Example of a Matrix Organizational Structure

There are countless companies that have opted for a matrix organizational structure. One such company is Starbucks, the popular American coffee marque, today having reached all around the world.

The company has products-based divisions where teams are handling the line of coffee and baked goods separately. Then, it has geographical divisions which control the coffee chains in specific locations or areas. Furthermore, there is also a functional hierarchy where all the functional departments, such as HR, finance, administration, marketing, etc., have to abide by and work according to the policies being formulated.

Apart from Starbucks, other companies which operate on a matrix organizational structure are Philips, Caterpillar, Texas Instruments, etc.

Different Types of Matrix Organizational Structures

Matrix organizational structure, also known as a hybrid structure, has the following three types:

Weak Matrix Structure

A weak matrix structure is one where the functional managers have greater control over the project and its decisions. Moreover, the project manager has a little say and acts merely as a coordinator.

Strong Matrix Structure

The structure in which the project manager has a dominant position is a strong matrix structure. Here, the project manager has complete authority, and the functional managers just look into the work of those concerning their departments.

Balanced Matrix Structure

A balanced matrix structure is one where there exists a balance between the project and functional managers. In simple words, both the project manager and the functional managers work hand-in-hand and cooperate to complete a project.

Salient Features of Matrix Organizational Structure?

Some of the salient features of a matrix organizational structure are as follows:

Focus on Specific Projects

There lies a major focus on specific projects. A project manager is appointed as the head of a project and is responsible for its completion and success.

Formation of the Team 

The project manager often has to get members from various functional departments and assign them to work according to their specialized departments. Once the project is completed, the team is disbanded, and all the members return to their functional departments.

Role of two or more Managers 

Both the project manager and the functional managers discharge their duties in their areas. The project manager looks after the overall project and its various aspects while the functional managers oversee the work that concerns their functional departments.

Despite many similarities, there are differences between project and matrix organizational structures. In a project organization, the project manager is completely responsible for the functioning, whereas, in a matrix organization, the project manager shares the authority with the company.

Conclusion

Matrix organizational structure evolved due to the expansion and changing nature of business. The structure emphasized the importance of small teams and how such teams made from different functional departments can work effectively and contribute to a project’s success. It also highlighted how a double check by multiple managers and heads could reduce the chances of any mistake or inefficiency.

However, with time some of the inefficiencies of this structure also emerged. These include conflicting styles of work of the managers, slow decision making and responding, overburdened employees due to multiple feedbacks from the managers, and so on. One of the grave problems is the unclear roles and responsibilities that create confusion. 

In the end, it can be inferred that matrix organizational structure can be helpful for companies involved in large and diversified projects. However, there is a need to address the setbacks to get good results.

Advantages and Disadvantages of Matrix Organizational Structure

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