Matrix organization

What is a matrix organization?

The matrix structure is a unique form of organizational structure that companies use to manage their employees. Instead of being assigned to traditional departments, employees are grouped into project teams, with each member belonging to both the project team and a functional department.

In the matrix structure, employees have two direct supervisors: a project manager and a functional manager. This approach is most commonly used for projects or issues that a company is currently addressing. These are typically included in the rows of the matrix, while the columns represent the constant, repeatable functions that are similar to those found in a functional structure.

What are the benefits of using a matrix organization structure?

Many technology companies and startups choose to adopt the matrix structure because it offers greater flexibility and encourages collaboration and interdisciplinary skill development. It helps employees better identify with business goals, which fosters cross-functional collaboration, resulting in better problem-solving and decision-making capabilities. Moreover, the matrix structure is malleable, allowing companies to quickly adapt to changes in the business environment.

In a matrix organization, employees have a strong sense of ownership and accountability for their work, which helps to align their efforts with the company's business goals. This can result in greater commitment to achieving those goals and better overall performance. As a result, this organizational structure often works well for entities like startups.

What are the drawbacks of using a matrix organization structure?

Implementing the matrix structure requires robust internal communication systems to ensure that employees understand to whom they report. One of the major drawbacks of the matrix structure is that it can be expensive to manage due to prolonged task implementation and decision-making processes. This can lead to confusion about priorities and reporting lines, which can decrease overall productivity.

The matrix structure requires more management and coordination than traditional structures, which can increase costs. This is because managers need to spend more time aligning goals, resolving conflicts, and communicating with employees. As a result, the structure can create power struggles and conflicts between functional and project managers, as each may have different goals and priorities.

Using a matrix organizational structure can be made simpler by using automated HR software like PeopleForce. If you want to learn more, you can request a free demo today. A quick demonstration of how our HRM module, PeopleHR, will illustrate how you can centralize all the information requests for a functional matrix organization with ease.