Matrix Structure of Organization - Advantages and Disadvantages

A matrix organizational structure is one in which employees report to multiple bosses rather than just one. It differs from the classic organizational structure where the chain of command flows from the top down.

This structure creates a system where employees have multiple superiors along both functions and project lines. Employees in different functional divisions are distributed into project teams where they get to work with colleagues from other functional divisions.

In the matrix structure, each employee will have at least two managers to report to. This is generally the head of their individual department along with the project manager.

A matrix organization example would be when employees from sales, finance, and engineering come together to collaborate on a team project. In a traditional organizational structure, this interdepartmental collaboration does not exist.

Before implementing a matrix organizational structure, every business should consider both the advantages and disadvantages of this type of system. This is the best way to determine whether the matrix structure is an optimal fit for their specific set of needs.

Advantages of the matrix structure

Collaboration between departments

The biggest advantage of the matrix structure is the way in which it promotes collaboration by bringing together employees from different departments. When employees from various functional divisions work side by side it helps companies create more innovative products and services.

It is also a great way for organizations to capitalize on the resources they already have. There is no longer any need for them to recruit project team members from outside the company to offer their expertise.

Open communication leads to well-informed decisions

In a hierarchical organization structure where communication travels from the top down, it’s common for information to stay within one department. These departmental barriers mean companies miss the multiple perspectives and skill sets that come from communication with other functional divisions.

In a matrix structure, employees are encouraged to openly share their knowledge and skills to benefit the entire team. When team members from different departments combine their knowledge, it allows leaders to make better informed decisions and sets the organization up for success.

Increased employee morale

The matrix structure also helps employees feel valued for their knowledge and skills, and when this happens, they are more likely to feel connected and perform better, leading to a 21% increase in profitability.

Employee morale is tied directly to such important things as employee engagement, job satisfaction, employee retention, and overall productivity.

Employees develop new skills

Working outside of a traditional or hierarchical structure can benefit employees by helping them develop new skill sets and gain valuable experience from working with different departments.

Often obtaining new skills and knowledge from their teammates encourages employees to pursue further opportunities for professional growth and development.

Additional benefits of the matrix structure:

• Increased team performance
• More flexibility within the organization
• More standardized procedures across the company
• Increased uniformity in the workplace
• Clear and transparent project objectives
• Better time management
  
  

Disadvantages of matrix organizational structure

Team conflicts

The lack of a transparent hierarchy in a matrix structure may create conflic as employees have more than one manager and work on multiple teams. When it comes to matrix management roles and responsibilities, project managers and functional managers have equal authority. Often, this leads to separate goals that compete for time, attention, and valuable resources.

Furthermore, in a matrix structure, the lines between job roles tend to be more blurred, and this can cause further conflict among teammates if individual responsibilities are not clear.

Heavier workloads

It is common for a matrix structure to result in heavier workloads. Employees often must focus on their regular work duties along with the time they are spending collaborating on team projects.

This can quickly lead to burnt-out and overworked employees who stay late to meet deadlines. Working long hours can have a significant impact on employee wellness and employees are more likely to develop heart disease, hypertension, joint pain, weight loss, and fatigue.

Measuring employee performance can be difficult

Employee performance tracking is essential in ensuring that an organization operates efficiently and meets its strategic goals. In a matrix organizational structure, tracking employee performance is tricky. This is because employees may be performing multiple separate roles both in their department and on team projects.

There can also be confusion from the employee’s perspective when it is not clear who is assessing their performance and who they should talk to about career development opportunities.

Slower decision making

A matrix structure means that rather than one manager weighing in on a task or issue, there are two or more. This can mean that decision-making can take longer, especially if there are any conflicts between leaders and they have difficulty reaching an agreement

In addition, the matrix structure’s complex nature means that it can take longer for teams to reach an agreement regarding what the next steps should be. This is a by-product of the increased levels of open communication that the matrix structure enables.

Additional disadvantages of matrix organizational structure:

• Confusion surrounding roles and responsibilities
• More expensive
• Managers can have conflicting objectives
• Managers may have different management styles
• Priorities are difficult to establish
• Decisions must go through multiple people before being approved

Key Takeaway

A matrix organization is a company structure where employees report to more than one manager. This is a project manager as well as their department head. This means that there are two chains of command working simultaneously.

Companies often implement a matrix structure when they have projects that require employees from different functional divisions to combine their skill sets and work together. Although popular, there are both advantages and disadvantages to opting for this structure.

On one hand, it encourages collaboration, creates new lines of internal communication, and allows employees to develop new skills. However, the matrix structure also has drawbacks including slower decision making, conflicts, and heavier workloads. A matrix structure can be a great option for many businesses and help them reach a new level of efficiency. Organizations just need to be sure to keep the structure’s downsides in mind so that they can avoid them.