Understanding a Matrix Organizational Structure

By Indeed Editorial Team

Updated December 13, 2022

Published May 17, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Organizational structure is the method of arranging a company's framework. The organizational structure influences the hierarchy of leadership and affects the company's flow of information and ideas. The format that an organization chooses also determines an employee's reporting structure.

There are several types of organizational structures. They include flat, divisional, functional and matrix. In this article, we discuss what a matrix organizational structure is, the benefits and disadvantages of this framework and tips for working effectively within it.

Related: What Is a Flat Organizational Structure?

What is a matrix organizational structure?

A matrix organizational structure is a combination of two or more frameworks, such as functional management and project management. In its simplest form, a matrix organizational structure comprises two chains of command, one person reporting to two supervisors.

When looking at an organizational chart, you can see the relationships typically shown as solid or dotted lines. An employee may have more than one line showing that they report to multiple leaders.

The vertical lines typically represent the reporting structure within a hierarchy structure, such as a functional department. For example, if you work as a graphic designer, you may report to the marketing manager and to an executive director.

Besides the functional or vertical lines of an organizational structure, a project manager may also manage a team of people from various departments. The horizontal lines on an organizational chart represent this additional reporting structure. The project manager uses resources from multiple departments, such as marketing, administration and human resources to work together.

Both the functional department manager and the project manager use the same resources within the organization. For example, you primarily report to the company's marketing manager and to a project manager for a new product launch.

Related:

  • What Is a Divisional Structure? (With Pros and Cons)

  • Functional Organization Structure: Pros and Cons

Why would a company choose to use a matrix organizational structure?

A company may decide to use a matrix structure to use resources and employees across multiple locations. It allows a company to maximize the talents, strengths and expertise of their most valuable asset, their people. This organizational structure is also used to spread out skills and abilities among multiple departments or divisions when needed.

Related: Organizational Structure in Project Management (With Tips)

What are the different matrix organizational structures?

There are three types of matrix organizational structures:

1. Weak matrix structure

A weak matrix structure is most similar to a traditional hierarchical structured workplace. A functional manager is the dominant decision-maker and oversees all aspects of a project. The project manager is in a position of authority but ultimately reports to the functional manager.

As an employee in this structure, you work under both the functional and project manager's guidance and direction. However, your main direction comes from your functional manager.

2. Balanced matrix structure

A balanced matrix structure gives more authority to the project manager than within a weak matrix structure. Both the functional and project managers hold authority.

As an employee in this structure, you work under the guidance and direction of both managers. Your functional manager is your primary contact, but you still report to the project manager.

3. Strong matrix structure

A strong matrix structure gives the project manager equal or greater authority than a functional manager. The project manager has primary control over resources and the distribution of tasks.

As an employee in this structure, your primary direction and guidance come from the project manager, with secondary direction coming from the functional manager.

Related: What Are Corporate Structures? (With Types and Benefits)

Advantages of matrix organizational structures

There are several advantages of using a matrix organizational structure because of its highly collaborative design and sharing of resources. The advantages include:

Improved communication

A matrix organization structure creates a more open work environment. The sharing of information is no longer kept within a department silo. Multiple departments communicate effectively to complete projects and improved communication resolves issues with greater efficiency.

Increased employee development

Because it introduces your employees to various projects, positions and departments, a matrix structure is excellent for encouraging professional development. It exposes employees to working with more than one manager, which helps develop interpersonal and communication skills. Working closely with people from other departments also presents your employees with opportunities to learn unique skills and abilities.

Encourages employee motivation

A matrix structure within an organization encourages a culture of contribution. As a result, your employees feel a greater sense of motivation. The system encourages greater autonomy and more employee input. The company highly values all points of view.

Collaboration and maximizing resources

A company shares resources and maximizes them within a matrix organizational structure. It encourages collaboration and teamwork. Bringing together highly skilled employees from various departments allows a company to capitalize on its most significant strengths internally instead of hiring contractors or professional talent outside the organization. And once they have completed a project, team members don't have to worry about their position being eliminated, as they can continue with their departmental duties.

Disadvantages of matrix organizational structures

Along with the advantages of matrix organizational structure, there are several disadvantages that you should consider:

Roles are not clearly defined

Without careful planning, both managerial and team members' roles become undefined, causing confusion and frustration. A common struggle is the dynamic between functional managers and project managers. Unless they clearly define the management roles and responsibilities, questions arise about who has the final decision-making power. Similarly, employees who report to two managers may feel conflicted without clear direction and guidance. Creating a detailed definition of job scope and responsibilities for both functional and project-based roles eliminates this challenge.

Slower decision-making process

The decision-making process within a matrix organizational structure has the potential to become slower. Because various managers need to approve a decision, the project needs to account for a longer time frame. And multiple departments may require extra steps to support a decision. For example, quality control may have various checkpoints before signing off on a decision before it proceeds to the next step. Accounting for the multiple decision-making steps and additional time eliminates this specific disadvantage.

Increased workload may cause burnout

Without having the proper checks and processes in place, a matrix structure may increase employee workload to the point of burnout. Because employees are spreading their time between multiple managers and projects, supervisors must be conscious of unrealistic workloads. This can lead to missing or forgetting tasks or decreased quality of work. Checking in with employees and encouraging clear and open communication eliminates this risk.

Difficulty in measuring employee performance

Within a matrix organization structure, employees have multiple people they report to and various roles and responsibilities to balance. Because of this, it's difficult to gauge employee performance. You can minimize this challenge by setting clear expectations with the employee regarding their functional role and project-based deliverables. Completing an employee's evaluation together with both functional managers and project managers can help offer a well-balanced review.

Related: How Employee Performance Is Measured and Why It's Important

Tips for working effectively within a matrix organizational structure

If you choose to implement a matrix organizational structure within your business, there are several tips to ease the transition from a traditional hierarchy system:

Clearly define roles and expectations of team members

Providing employees with a clearly defined role can prevent misunderstandings and confusion. This includes providing team members with clear responsibilities and expectations of both their functional manager and the project manager they report to. Ensuring that all team members understand timelines and critical deliverables sets you up for success within this organizational structure.

Train team members and managers to work within a matrix structure

Be sure you train all employees and supervisors on how a matrix organizational structure works. Provide a visual example of the company's organizational chart so that everyone can see how the interaction between departments and projects works. This is especially important if using a matrix structure is a new initiative. You can reduce confusion by offering training about the new system and the importance of open communication during the process.

Maintain open channels of communication between different managers and their employees

Having clear and constant communication between the various departments and projects is essential to the structure's success. This also includes continuous communication between different managers and their employees. One way to create a culture of open communication is to set expectations around when and how often you share information. For example, you can implement a weekly update meeting with managers and staff to share important project updates and challenges.

Keep employees engaged and accountable

As employees may have several managers they report to, keeping employees engaged and accountable is essential. Checking in with your employees to make sure they feel supported and have the necessary tools and resources encourages engagement. Consider methods to hold employees accountable for their work, like a weekly project report updating management of their status.

Related: What Is Organization Hierarchy? (With Definition and Types)

A matrix organizational structure has several pros and cons, as you've learned in this article. By following the above tips, you can do your part to help your company's organizational framework succeed.

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