Matrix Organizational Structure

11 Key excerpts on "Matrix Organizational Structure"

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  Project Management Leadership

  Building Creative Teams

  • Rory Burke, Steve Barron(Authors)
  • 2014(Publication Date)
  • Wiley

    (Publisher)

  3. Matrix Organization Structure

  The topology of the matrix structure has the same format as a mathematical matrix (columns and rows). In this case, the vertical lines represent the functional department’s responsibility and authority, while the horizontal lines represent the project’s responsibility and authority, thus giving the matrix structure its unique appearance and name (see Figure 4.4 ).

  Figure 4.4 : Matrix Organization Structure – shows the project managers’ (project 1 and project 2) lines of responsibility and authority overlaid on the functional managers’ vertical lines of responsibility and authority

  The matrix structure is considered by many practitioners to be the natural project organization structure, as it formalizes the informal links (mentioned in the previous section). On multi-disciplined projects, employees need to communicate vertically within their department to perform their tasks, and horizontally with other departments and the Project Management Office (PMO).

  The matrix structure is a temporary structure superimposed on the existing functional structure. The matrix structure is created to respond to the needs of the project where people from the functional departments are assigned to the project on a full-time or part-time basis. When the project is complete, the matrix structure is removed and the functional structure remains intact. The aerospace industry finds this structure works well on medium-sized projects, but for large capital projects they prefer to use the pure project organization structure (see next section).

  Table 4.4 considers some of the advantages inherent in the typical matrix organization structure.

  Table 4.4 : Advantages of a Matrix Organization Structure

  Responsibility	The project manager is the clear single point of responsibility.
  Resources	The project can draw on the entire resources of the company. When several projects are operating concurrently, the matrix structure allows a time-share of expertise, which should lead to a higher degree of resource utilization.

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  Project and Program Management

  A Competency-Based Approach, Fifth Edition

  • Mitchell L. Springer(Author)
  • 2023(Publication Date)
  • Purdue University Press

    (Publisher)

  It can be viewed as a project organization superimposed over a functional organization. Figure 15.3 is an example of a typical Matrix Organizational Structure. The matrix structure is more complex than either the traditional or product-oriented structures. To this end, it requires some basic ground rules to be successful:  Participants must spend committed time on a project; this ensures a degree of loyalty.  Horizontal as well as vertical channels must exist for making decisions.  There must be quick and effective methods for conflict resolutions.  There must be good communication channels between managers.  All managers must have input into the planning process.  Both horizontal and vertical managers must be willing to negotiate for resources.  Horizontal line must be willing to operate as a separate entity except for administrative purposes. Organization Design Models—Not Right or Wrong, More or Less Applicable • 219 Project management is more behavioral than quantitative. Interpersonal and communicative skills are extremely important attributes of the project manager. In a Matrix Organizational Structure:  There should, ideally, be no disruption due to dual accountability.  A difference in functional management judgment should not delay work in progress. Advantages of this type of organizational structure are:  Combines the strengths of both project and functional organizations.  Provides a good interface with the outside customer.  Promotes effective interdisciplinary task integration.  Promotes an efficient use of production resources.  Promotes effective project control, as programmatic concerns are assigned to a single individual.  Promotes career continuity and professional growth, as each functional individual has a home after project completion.  Perpetuates technology. By this, functional resources gain the benefit of a functional strength, which can be transferred to the program of the day.

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  The Matrix Organization Reloaded

  Adventures in Team and Project Management

  • Marvin R. Gottlieb Ph.D.(Author)
  • 2007(Publication Date)
  • Praeger

    (Publisher)

  Within a matrix, each of the product groups intersects with each of the functional groups, signifying a direct relationship between product teams and administrative divisions. Theoretically managers of project groups and managers of functional groups share some level of authority within the organization. For example, in a balanced matrix the authority would be equal. The structure also dictates that many employees report to at least two managers. Some matrix structures exist on a temporary or ad hoc basis. Various work configurations or teams are created to deal with a particular problem or project. Once the objectives are reached, the team disbands and the members are reassigned to other duties or projects. More permanent matrix structures are aligned with product lines or processes. One example would be a brand manager who is responsible for overseeing the development and production of an ongoing product, but staff who work on the product may also contribute to other products from time to time. This permanent set-up creates accountability, coordination, and continuity for the product as a whole. At the same time, it enables the staff to generally have a direct supervisor who is not a product manager to be flexibly assigned where they are needed most. The biggest advantage of a matrix structure is that it facilitates rapid response to change in two or more environments. Matrix structures are flatter and more responsive than other types of structure because they permit more efficient exchanges of informa- tion. An additional result could be the more efficient use of resources than other structures. 2 The Matrix Organization Reloaded With all the potential advantages, matrix structures have received much criticism for the several challenges created by the unique arrangement.

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  The Self-Made Program Leader

  Taking Charge in Matrix Organizations

  • Steve Tkalcevich(Author)
  • 2015(Publication Date)
  • Auerbach Publications

    (Publisher)

  These factors determine the organizational structure that will be used for the orga-nization. Aligning the strategy with the direction your firm is headed will allow for smoother operations for example. This direction comes from top management with the involvement of the entire management 26 THE SELF-MADE PROGRAM LEADER team. Managers often work tirelessly to maintain the course set forth by the strategic direction and goals of the organization. The quicker the organizational environment changes, the more flexibility is needed for managers and leaders to control the change. This means the more problems they face the more room is needed to adjust their plans and people they manage. It should be noted that technology often is viewed as the golden ticket to the problems that they are facing. In fact, the more technology implemented the harder it is to regulate the organization. Perhaps you worked in such environ-ment in the past or presently. It is a challenge indeed. When planning out work, the manager needs to make use of effective job design in which they group tasks into specific jobs. This makes for an efficient and effective workforce. As a leader, a Matrix Organizational Structure can be unclear and inefficient to work in at times. This is in part due to the lack of infor-mation on what each person’s role is in the structure. As a leader you are going to be working with colleagues at all levels of the organiza-tion, and it is paramount that you are able to understand and work within the matrix structure without complications. The sooner you become aware of the possible challenges and opportunities for your team the more time you can spend on the most important aspects of your work. Having clarity, design and details of the intentions of a matrix structure will allow you to operate at an efficient and effective pace, with little confusion.

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  Management

  • John R. Schermerhorn, Jr., Barry Wright, Daniel G. Bachrach(Authors)
  • 2017(Publication Date)
  • Wiley

    (Publisher)

  206 CHAPTER 11 Organization Structures and Design multinational corporations, where they offer the flexibility to deal with regional differences while still supporting multiple product, program, or project needs. Advantages and Disadvantages of Matrix Structures The primary benefits of matrix structures derive from team members working closely together across functional lines and sharing expertise and information in a timely way. This structure goes a long way toward eliminat- ing functional chimneys problems and poor cross-functional communication. The potential advantages of matrix structures include: • Better communication and cooperation across functions. • Improved decision-making; problem solving takes place at the team level where the best information is available. • Increased flexibility in adding, removing, or changing operations to meet changing demands. • Better customer service; there is always a program, product, or project manager informed and available to answer questions. resources and top management attention, emphasizing divi- sion needs over broader organizational goals. Matrix Structures The matrix structure, often called the matrix organization, combines functional and divisional structures. It is an attempt to gain the advantages and avoid the disadvantages of each. This is accomplished by creating permanent teams in a ma- trix that cuts across functions to support specific products, projects, or programs. 19 As shown in Figure 11.6, workers in a matrix structure simultaneously belong to at least two formal groups—a functional group and a product, program, or project team. They also report to two supervisors—one within the function and the other within the team.

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  Project Management

  A Systems Approach to Planning, Scheduling, and Controlling

  • Harold Kerzner(Author)
  • 2013(Publication Date)
  • Wiley

    (Publisher)

  Figure 3–6 , we can see that the traditional structure is still there. The matrix is simply horizontal lines superimposed over the traditional structure. The horizontal lines will come and go as projects start up and terminate, but the traditional structure will remain.

  Matrix structures are not without their disadvantages, as shown in Table 3–6 . The first three elements are due to the horizontal and vertical work flow requirements of a matrix. Actually the flow may even be multidimensional if the project manager has to report to customers or corporate or other personnel in addition to his superior and the functional line managers.

  TABLE 3–6 . DISADVANTAGES OF A PURE MATRIX ORGANIZATIONAL FORM

  Multidimensional information flow. Multidimensional work flow. Dual reporting. Continuously changing priorities. Management goals different from project goals. Potential for continuous conflict and conflict resolution. Difficulty in monitoring and control. Company-wide, the organizational structure is not cost-effective because more people than necessary are required, primarily administrative. Each project organization operates independently. Care must be taken that duplication of efforts does not occur.

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  Understanding Matrix Structures and their Alternatives

  The Key to Designing and Managing Large, Complex Organizations

  • William G. Egelhoff, Joachim Wolf(Authors)
  • 2017(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  13 © The Author(s) 2017 W.G. Egelhoff, J. Wolf, Understanding Matrix Structures and their Alternatives, DOI 10.1057/978-1-137-57975-1_2 2 The Historical and Conceptual Contexts for Understanding Matrix Structures The first three sections of this chapter describe the history of organiza- tion design, up to and including the development of matrix structures. The fourth section discusses the more recent interest in developing non- hierarchical networks as an alternative to hierarchical structures and espe- cially matrix structures. The fifth section discusses why strategy–structure fit is important in large, complex firms. The last two sections introduce an information-processing perspective of organizations and develop an information-processing model for relating strategy and structure. 2.1 A Brief History of the Broader Subject of Organization Design There is a long history associated with the organization and management of human activities so that tasks are accomplished and goals are real- ized. What an individual acting alone can do probably hasn’t changed that much over time, but what individuals acting collectively can do has changed a lot. As humans have learned how to better organize and coordinate activities, productivity and output have soared. The advance of civilization itself can be viewed as largely an advance in organization design—in organizing people so that they are more specialized and can better transfer knowledge and information among themselves. Early attempts to organize greater amounts of human activity at a higher level often ran into severe difficulties. In the book of Exodus in the Bible, Moses was charged by God to lead the people of Israel. In Exodus, Chap. 18, Moses complains to his father-in-law, Jethro, that he sits from morning till night listening to the problems of the people and attempt- ing to give directions that will better coordinate their interdependent behaviors—and he can’t successfully do it.

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  Project Management

  A Managerial Approach

  • Jack R. Meredith, Scott M. Shafer, Samuel J. Mantel, Jr.(Authors)
  • 2021(Publication Date)
  • Wiley

    (Publisher)

  This holistic approach to the total organiza- tion’s needs allows projects to be staffed and scheduled in order to optimize total system performance rather than to achieve the goals of one project at the expense of others. 7. While standalone projects and functionally organized projects represent extremes of the organizational spectrum, matrix organizations cover a wide range in between. We have differentiated between strong and weak matrices in terms of whether the functional units supplied individuals or capacity to projects. Obviously, some functional units might furnish people and others only supply capacity. There is, therefore, a great deal of flexibility in precisely how the project is organized—all within the basic matrix structure—so that it can be adapted to a wide variety of projects and is always subject to the needs, abilities, and desires of the parent organization. The advantages accruing to the matrix structure are potent, but the disadvantages are also serious. All of the following disadvantages involve conflict—between the functional and project managers for the most part. 1. In the case of functionally organized projects, there is no doubt that the functional division is the focus of decision-making power. In the standalone project case, it is clear that the PM is the power center of the project. With matrix organizations, the power is more balanced. Often, the balance is fairly delicate. When doubt exists about who is in charge, the work of the project suffers. If the project is successful and highly visible, doubt about who is in charge can foster political infighting for the credit and glory. If the project is a failure, political infighting will be even more brutal to avoid blame. 2. While the ability to balance time, cost, and scope between several projects is an advantage of matrix organizations, that ability has its dark side. The set of projects must be carefully monitored as a set, a tough job.

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  Project Management

  A Systems Approach to Planning, Scheduling, and Controlling

  • Harold Kerzner(Author)
  • 2009(Publication Date)
  • Wiley

    (Publisher)

  • Higher profit generation even in an industry (silicones) price-squeezed by competition. (Much of our favorable profit picture seems due to a better overall understanding and practice of expense controls through the company.)

  • Increased competitive ability based on technological innovation and product quality without a sacrifice in profitability. • Sound, fast decision-making at all levels in the organization, facilitated by stratified but open channels of communications, and by a totally participative working environment. • A healthy and effective balance of authority among the businesses, functions, and areas. • Progress in developing short- and long-range planning with the support of all employees. • Resource allocations that are proportional to expected results. • More stimulating and effective on-the-job training. • Accountability that is more closely related to responsibility and authority. • Results that are visible and measurable. • More top-management time for long-range planning and less need to become involved in day-to-day operations.

  Obviously, the matrix structure is the most complex of all organizational forms. Grinnell and Apple define four situations where it is most practical to consider a matrix31 :

  • When complex, short-run products are the organization’s primary output. • When a complicated design calls for both innovation and timely completion. • When several kinds of sophisticated skills are needed in designing, building, and testing the products—skills then need constant updating and development. • When a rapidly changing marketplace calls for significant changes in products, perhaps between the time they are conceived and delivered.

  Matrix implementation requires:

  • Training in matrix operations • Training in how to maintain open communications • Training in problem solving • Compatible reward systems • Role definitions

  3.7 MODIFICATION OF MATRIX STRUCTURES

  The matrix can take many forms, but there are basically three common varieties. Each type represents a different degree of authority attributed to the program manager and indirectly identifies the relative size of the company. As an example, in the matrix of Figure 3-6

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  Project Management

  A Systems Approach to Planning, Scheduling, and Controlling

  • Harold Kerzner(Author)
  • 2022(Publication Date)
  • Wiley

    (Publisher)

  While size may have little effect on the organizational structure, it does have a severe impact on the economies of scale. Small companies, for 5. Jay R. Galbraith, “Matrix Organization Designs.” Reprinted with permission from Business Horizons, February 1971, pp. 29–40. Copyright © 1971 by the Board of Trustees at Indiana University. Strategic Business Unit (SBU) Project Management 123 example, cannot maintain large specialist staffs and, therefore, incur a larger cost for lost specialization and lost economies of scale. The way in which companies operate their project organization is bound to affect the organization, both during the operation of the project and after the project has been completed and personnel have been disbanded. The overall effects on the company must be looked at from a personnel and cost control standpoint. This will be accomplished, in depth, in later chapters. Although project management is growing, the creation of a project organization does not necessarily ensure that an assigned objective will be accomplished successfully. Furthermore, weaknesses can develop in the areas of maintaining capability and structural changes. Although the project organization is a specialized, task-oriented entity, it seldom, if ever, exists apart from the traditional structure of the organization. All project management structures overlap the traditional structure. Furthermore, companies can have more than one project organizational form in existence at one time. A major steel product, for exam-ple, has a matrix structure for R&D and a product structure elsewhere. Accepting a project management structure is a giant step from which there may be no return. The company may have to create more management positions without changing the total employment levels. In addition, incorporation of a project organization is almost always accompanied by the upgrading of jobs.

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  Economics of Strategy

  • David Dranove, David Besanko, Mark Shanley, Scott Schaefer(Authors)
  • 2015(Publication Date)
  • Wiley

    (Publisher)

  5. Matrix organizations first sprang up in businesses that worked on scientific and engi- neering projects for narrow customer groups. Examples include Fluor, which built oil refineries in Saudi Arabia, and TRW, which supplied aerospace equipment to NASA. What do you suppose the dimensions of the matrix would be in such firms? Why would these companies develop such a complex structure? 6. It is sometimes argued that a matrix organization can serve as a mechanism for achieving strategic fit—the achievements of synergies across related business units resulting in a combined performance that is greater than units could achieve if they operated independently. Explain how a matrix organization could result in the achievement of strategic fit. 7. Is is possible to organize too much or too little to meet the needs of the environ- ment? This would be a case of strategic misfit. How would you know if a misfit has Endnotes • 453 occurred? Think of an example of misfit caused by an inappropriate organization design. Explain how a firm’s structure could systematically increase its costs and place it at a strategic disadvantage. 8. While Internet entrepreneurs worked hard to get their venture to the point of a suc- cessful initial public offering (IPO), many discovered that their organizational issues changed and became more daunting after the IPO than before it, when they were just working to accommodate rapid growth. Explain why “going public” might put such a stress on a small firm’s structure. 9. The “#1 or #2; Fix, Sell, or Close” rule was one of the most memorable aspects of Jack Welch’s corporate strategy at GE. (Business units needed to achieve a #1 or #2 market share; if not, they had to fix, sell, or close the unit.) In the 1990s, however, this rule was changed to focus on smaller (10 to 15 percent) market-share require- ments but a requirement that business unit managers demonstrate significant growth potential.

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