What is a matrix organization? An organization will be known as matrix organization when it follows the matrix structure.
During a project, an organization usually follows the matrix structure. In a matrix structure, the employees report to two different managers at one time. One of the bosses is the manager who has authority due to vertical hierarchy. The second boss is the one who gets the authority due to flat hierarchy.
Due to this divided flow of horizontal and vertical authority, this type of organization is said to have a ‘matrix’ structure. The matrix organizational structure is a mix of two other organizational structures, the project system, and the functional system.
The matrix structure cancels out the extremes of the two structures to balance them somewhere in between. For example, if you are a software engineer at a firm and that firm receives a project that requires a software engineer, so they hire you instead of a new candidate.
Now, you will be reporting to your primary boss as well as the new project manager. On the other hand, if the firm transfers you to the project permanently, you will not be reporting to two managers.
The Matrix Structure: An overview
The figure above displays the fundamentals of a matrix organizational structure.
The manufacturing manager, sales manager, finance manager and human resource manager are under the top management in the vertical hierarchy. Moreover, the manufacturing unit, the sales unit, finance unit and human resource unit work under each manager, respectively.
On the other hand, you can also see that each of these units is also receiving horizontal orders. The horizontal orders will be from the manager of project A, manager project B and manager project C.
Each project has a manufacturing unit, sales unit, the finance unit, and human resource unit. Unlike the vertical managers who have a single type of units working under them. The scenario will be; manufacturing unit working under the manufacturing manager, sales unit working under the sales manager, finance unit working under the finance manager and human resource unit working under the human resource manager.
This is an ideal example of a matrix structure where authority is flowing vertically as well as horizontally.
Advantages of a matrix structure
A matrix structure has its pros and cons.
Fewer people, more work
Following the matrix structure, the employees are given more tasks instead of hiring new people. The company can use the existing workforce to get tasks done. This way, people can move freely and can do the work more efficiently as there are lesser distractions.
Giving new additional jobs to existing employees is also beneficial in a way that they already know the workplace and everyone there knows them too. There is no need for orientations, inductive training, and similar activities.
Existing employees are also more trustworthy. Moreover, when the project is complete, no need of laying off; everyone will go back to their primary jobs without causing any disturbance.
Choose from experts
Following the matrix organizational structure, allows you to choose people for a project from within the organization. You can choose the best people there are in each department.
For example, you can choose the best software engineer from the software engineering department, you can choose the best finance employee from the finance department and you can choose the best salesperson from the sales department. This way, you can get the best team for your project from within the organization.
These people are familiar with the organizational culture and know how things work around here.
The efficient flow of information
When information flows vertically as well as horizontally in a matrix structure, it is much efficient. The vertical flow provides information to follow from project to project while the horizontal flow provides information to go from functional units to functional units.
Disadvantages of matrix structure
Manager vs Manager
Functional managers and project managers may have grudges against each other. This may cause harm to the organization and the employees working for them. For example, one manager may deliberately keep an employee busy in unimportant work to prevent him from working for the other manager.
Managers might also keep dumping more and more work on the employees. This happens mostly in law firms where associates are working for several partners.
The junior lawyers have to do whatever any partner tells them to do.
Too complex a system
Several people working for several people and answerable to several people for several jobs. Too complicated! Controlling and monitoring such a system can get an irksome job.
Moreover, chances of faults, misplacements, and accidents increase too when the system is so widespread and complex. When a structure has a two-way flow, an important decision might get delayed too.
The delay can be due to the fear that any wrong decision can distort the entire system.
One man, two jobs
In a matrix organizational structure, when employees are doing multiple jobs, organizations can become more dependent on them and they get the liberty to perform badly, take days off and even ask for increased pay. Moreover, due to the absence or departure of one employee due to any reason, more than one job will be affected which will, in turn, affect more than one system.
Too much authority
Matrix structure becomes too autocratic when it comes to the number of managers. The current era favors democratic culture more than the autocratic culture and when there are many managers ordering their own work on employees, motivation level would fall drastically. Although authority is compulsory, too much of it is undesirable and can adversely affect the employees as well as the system.
People are becoming more and more aware of the motivational phenomena lately and managers are becoming ever more careful, so they tend not to be too harsh on employees. Moreover, the modern era and advantages of technology make it possible to process and deliver tons of data/information in a matter of seconds.
The complexity of the system is not quite under question. So, matrix organizational structure can be extremely fruitful if pursued with special care and when the managers put in their best to not act as bosses, but as leaders.