What is a matrix organizational structure?

A matrix organizational structure consists of two lines of authority: the functional line and the product line.

What companies use a matrix organizational structure?

A matrix organizational structure offers companies with various advantages, which are better collaboration, better efficiency, better interdepartmental communication, and opportunities for employees to learn new skills.

What are the matrix organizational structure's advantages and disadvantages?

On the positive side, a matrix organizational structure offers companies various advantages: better collaboration, better efficiency, better interdepartmental communication, and opportunities for employees to learn new skills. However, on the negative side, a matrix organizational structure can be problematic in role definitions, slow decision-making process, and work overload possibilities.

What are the 3 types of matrix structures?

There are three main types of matrix organizational structures: weak matrix organizational structure, balanced matrix organizational structure, and strong matrix organizational structure.

Matrix Organizational Structure: Examples

Q: What is a matrix organizational structure example?

A university in which dual lines of authority resemble the minor departments (e.g., marketing, finance, operations, etc.) and the major departments (e.g., Business and Economics) is an example of a matrix organizational structure.

Matrix Organizational Structure

Do you have multiple projects to manage? Are you thinking about a one-for-all structure to organize all of them? We truly understand the complexity of activities and resources entailed in project task management and everything in between. Thus, let us introduce you to the flexible and efficient matrix organizational structure to manage your projects effectively.

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Matrix Organizational Structure Definition

Every company develops a specific organizational structure that best suits its goals and objectives. When it comes to project management, a matrix organizational structure is popular as it can both set a standard for operation and project tools and inform team members of their roles and responsibilities.

A matrix organizational structure generates two lines of authority, combining the functional and product departments of the organization.

Usually, there are two chains of command, where project team members have two bosses or managers, a functional manager and a project manager. Thus, such two-boss matrix will enable both organizational charts and management styles to complement each other during working process.

When can your organization adopt a matrix organizational structure?

If your company is producing both products and services simultaneously, the team can adopt a matrix organizational structure to maximize the contribution and influence of both sectors. For example, a company that provides software products and cloud services can consider using a matrix organizational structure.

Matrix Organizational Structure Chart

There are many variations of a matrix organizational structure chart. Each variation depends on the company's internal and external environment. Let's have a look at one of the most typical matrix organizational structure charts that are in use at modern offices.

As shown in Fig. 1, under the company's general manager, two chains of command are classified by projects and departments, respectively. From a business perspective, this matrix organizational structure chart is beneficial in identifying responsible individuals for specific tasks and projects.

Matrix organizational structure example: a university in which dual lines of authority resemble the minor departments (e.g., marketing, finance, operations, etc.) and the major departments (e.g., Business and Economics).

Matrix Organizational Structure Advantages and Disadvantages

Every organizational structure has its pros and cons, with the matrix organizational structure being no exception.

Matrix Organizational Structure: Advantages

On the positive side, a matrix organizational structure offers companies with various advantages, among which the following ones are most prominent:

Better collaboration: There is a dual chain of command in a matrix organizational structure, so it can easily and effectively bring team members across different departments and projects together. Thus, companies can capitalize on their internal resources to maximize their business outcomes.
Better efficiency: a matrix organizational structure can combine a company's project management structure with its functional management structure. Thereby, a matrix organizational structure allows the company to quickly and efficiently respond to changing markets or fluctuating demand.
Better interdepartmental communication: a matrix structure can also enable interdepartmental communication, thus activating effective collaboration. Accordingly, a company can become more dynamic with a more open work environment under a matrix organizational structure.
Opportunities for employees to learn new skills: the dual chain of command in a matrix organizational structure can allow employees to benefit from the nature of having two managers. Thus, they can gain valuable insight from both managers as well as the multiple departments they work with.¹

Matrix Organizational Structure: Disadvantages

However, on the negative side, a matrix organizational structure can be problematic in role definitions, slow decision-making process, and work overload possibilities.¹

How can a matrix organizational structure lead to unclear role definitions?

Commonly, a matrix organizational structure can make it difficult for organizational members to understand their roles and responsibilities in the company's hierarchy. For instance, managers can be equally involved in so many projects that they find it hard to define their specific managerial roles as functional or project ones. In other cases, employees face difficulties addressing which managers (functional or project managers) should communicate their task responsibilities.

Besides, a matrix organizational structure can slow down the decision-making process. As a matrix organizational structure involves more than one manager for each project, decisions must travel through both managers accordingly.

Also, a common disadvantage of a matrix organizational structure is its association with work overload and employee burnout.

Why can a matrix organizational structure cause work overload and burnout?

Given the nature of a matrix organizational structure, employees often have to work under a dual chain of command, which, in most cases, requires them to double their efforts in task achievement and communication. Thus, employees are often expected to follow two distinctive working styles adopted by two different managers. As a result, if they fail to deliver the tasks appropriately to each manager, there is a high risk of employees experiencing burnout and work overload.

Types of Matrix Organizational Structure

There are three main types of matrix organizational structure, which are differentiated mainly based on the balance of power between the functional manager and the project manager.

Weak Matrix Organizational Structure

A weak matrix organizational structure resembles a traditional hierarchical one.

A weak matrix organizational structure provides the functional manager with the entire project control, while the project manager has limited authority.¹

Accordingly, in a weak matrix organizational structure, project managers have a part-time role with no administrative staff working under them. Thus, they act as coordinators or expediters in this sense. By contrast, functional managers represent dominant decision-makers who oversee all project-related matters.

Which manager(s) do you work for in a weak matrix organizational structure?

As an employee, while you still have both functional and project managers in your organizational structure, you receive orders and communicate your results chiefly and directly to your functional manager.

Balanced Matrix Organizational Structure

As its name suggests, a balanced matrix organizational structure strikes an equal share of power for an organization's functional and project managers.

A balanced matrix structure provides equal authority for both project and functional managers.¹

In a balanced matrix structure, project managers have more authority than those in a weak matrix organizational structure. Accordingly, employees work closely under the supervision of both managers across all business activities.

Which manager(s) do you work for in a balanced matrix organizational structure?

In a balanced matrix organizational structure, even if functional managers are employees' primary contact, employees still need to report to project managers and vice versa. Thus, in this sense, project and functional managers are equally important and powerful in controlling projects and the company's operations.

Strong Matrix Organizational Structure

When a weak organizational structure gives full authority to functional managers, a strong matrix structure prioritizes the role of project managers.

A strong matrix structure gives project managers greater authority than functional managers.¹

Accordingly, in a strong matrix structure, project managers take full control of the project's resources and task allocation. The project managers' guidance and directions are primary sources, and the directions coming from functional managers are only secondary for employees.

For example, an event organization team is most likely to adopt a strong matrix structure. Accordingly, the event manager (project manager) takes full control over the event's separate project teams, such as the opening project, main project, and closing project. Functional managers, such as logistics manager, have to work under the event manager's supervision.

Functional Organizational Structure vs. Matrix

Occasionally, a matrix organizational structure can be confused with a functional organizational structure.

A functional organizational structure divides a company into different departments based on specialized functional areas of expertise.²

Thus, in this section, we will discuss some core differences between these two types of organizational structure types.

Category	A Matrix Organizational Structure	A Functional Organizational Structure
Operational dimensions	There are two operational dimensions, which are functional and project dimensions.	One operational dimension is based on specialized functional areas, such as marketing, sales, or production.
Complexity	More complex due to a dual chain of command	Simpler and more convenient to manage
Appropriateness	Can be applied to companies with diverse product categories or multiple project portfolios	Can be applied to companies with a single location and a single product line
Business size	More suitable for organizations with large or significant scale	More suitable for small and medium businesses

Table 1 - A comparison between a matrix organizational structure and a functional one

Hybrid Organizational Structure vs. Matrix

Another similar organizational structure to the matrix organizational structure is the hybrid organizational structure.

Like a matrix organizational structure, a hybrid organizational structure combines functional and divisional structures. However, a hybrid organizational structure is less rigid in a sense that departments can be either functional or divisional depending on specific situations.¹

Yet, in most cases, a hybrid structure can be identical to a matrix structure across organizations.¹ Large companies popularly utilize a hybrid organizational structure to exploit its benefits of economics of scale and resource utilization efficiencies. However, just like a matrix organizational structure, a hybrid one is also time-consuming for decision-making and tricky to control and manage.

Starbucks is an international brand with a hybrid organizational structure. At Starbucks, the corporate HR department develops and introduces organizational policies to its entire geographic divisions across Asia, America, Europe, etc. Then, the HR department in each geographic division will be responsible for implementing such policies across Starbucks stores within their range and reporting to the functional head (the corporate HR manager and the geographical head (the manager of the geographic division) simultaneously. Thus, in this sense, Starbucks has utilized a hybrid organizational structure with two functional managers. ³

As organizational environments are wide and dynamic, it is important for organizations to find an organizational structure type that best suits them. For organizations that provide products and services simultaneously, or possess rich project portfolios, a matrix organizational structure is beneficial indeed. Though a matrix organizational structure sometimes adds complexity, its benefits of business scale and coordination far outweigh this.

Matrix Organizational Structure - Key takeaways

A matrix organizational structure consists of two lines of authority: the functional line and the product line.
A weak matrix organizational structure provides the functional manager with the entire project control, while the project manager has limited authority.
A balanced matrix structure provides equal authority for both project and functional managers.
A strong matrix structure gives project managers greater authority than functional managers.
A functional organizational structure divides a company into different departments based on specialized functional areas of expertise.
A hybrid organizational structure is less rigid in the sense that departments can be either functional or divisional, depending on specific situations.

References

Fahad Usmani. Matrix Organizational Structure: Examples, Advantages, and Disadvantages. 2022. https://pmstudycircle.com/matrix-organizational-structure/.
Ques10. What is the difference between Matrix and Functional Organization?. 2017. https://www.ques10.com/p/26211/what-is-the-difference-between-matrix-and-function/#:~:text=Matrix%20structure%20is%20a%20type,for%20the%20purpose%20of%20management.
Pauline Meyer. Starbucks’s Organizational Structure & Its Characteristics. https://panmore.com/starbucks-coffee-company-organizational-structure

Matrix Organizational Structure

StudySmarter Editorial Team