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Formal Organisation Matrix Organisation

Last updated date: 16th Apr 2024
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Details of Matrix Organisational Structure

Matrix organisation or grid organisation is a kind of departmentation. It can apply to a company, a project or even product management. This departmentation is particularly helpful in achieving organisational objectives that a company sets forth. The formal matrix organisational structure consists of the job structure, hierarchy, flow of communication and employee relationship, etc. Matrix organisation is one such part of the overall formal structure. In the following article, details of matrix organization will be discussed vividly. 

What is a Matrix Organisation?

Matrix organisation is the combining of project or product patterns of departmentation and functional departmentation within the same organisational structure. In a matrix organisation, there is more than one line of reporting managers. In other words, there is more than one boss for the employees. Organisations that deal in a diverse array of products opt for this kind of a structure. 

What is a Matrix Structure?

The matrix structure is common in engineering and product marketing organisations. In a matrix structure, individuals who specialise in some particular fields work together in a team and also work individually in his own department at the same time. For example, if a company is developing a new product, the team entitled with the duty will consist of engineers, designers, finance experts and marketing analysts etc. This can be referred to as a matrix structure. 

Explain the Matrix Organizational Structure

As we explain the matrix organizational structure, we must also discuss the three other organisational structures namely functional, line and third and line and staff. However, the matrix structure is way more complex and resembles a matrix or a grid-like representation. Both project management and functional organisation have been combined to form a matrix structure. 

Matrix Organizational Structure Advantages and Disadvantages

There are a good number of matrix organizational structure advantages and disadvantages. In the following section, we will first describe the benefits of matrix management. These are:

  • The benefits of matrix management are mostly enjoyed by the employees as they can gather dual support from the product manager and the functional manager both. Thus knowledge, effort, skill and work all are taken care of. 

  • The available resources are more efficiently used when this structure is implemented. The resources are not stagnated either as they can be shared among the ongoing projects. This reduces the cost also. 

  • The flow of information is smooth in all directions

  • All the departments involved coordinate with each other and thus miscommunication does not occur.

  • With more than one manager in place, the employees have to take decisions autonomously sharpening their decision-making skill.

  • Both lateral coordination and specialization are encouraged.

There are Some Disadvantages of Matrix Organization as Well, These are:

  • The structure is overtly complex; not all employees are comfortable working here.

  • The dual authority may pose many problems in terms of complexity. Employees may often get confused about whom to approach as the higher authority.

  • If any of the managers showcase ineffectiveness in management, miscommunication my follow

  • It is more expensive than other organizational structures. 

  • If there is a lack of communication between the managers or there is internal competition between them, conflicts are bound to occur leading to the failure of achieving organisational objectives.

In a nutshell, this is all about matrix structure along with matrix organization advantages and disadvantages. Though profitable, it has its complexities. In today’s world, the matrix structure is the most prominent one in the corporate sector. The involvement of two managers and their relationship with the employees pave the path for the achievement of the organizational goals. 

FAQs on Formal Organisation Matrix Organisation

1. In which Sector was the Matrix Organizational Structures First Developed?

Konosuke Matsushita introduced the concept of matrix structure in his organisation and a few years later, it became popular across other companies. However, matrix organizational structures were first developed in the west, the US, to be precise. The aerospace industry began to use this method as the projects they were undertaking became increasingly complex. Before the implementation of this, only the linear and hierarchical organisational structure was in use. This proved to be useful only when a single project was going on. In the case of multiple projects running at a time, the matrix structure was the best choice. 

2. Which Companies Use the Matrix Organisational Structure?

A company doesn’t need to always follow one particular organizational structure throughout its life cycle. To some extent, they can make changes as and when needed taking into account the deliverable projects. Some well-known companies that use matrix structure of the organisation are Texas Instruments, Caterpillar, and Philips etc. 

3. What are the Other Types of Organisational Structure?

There are four organisational structures in total; matrix structure being one of them. The rest of the three are:

  1. Flat Organisational Structure- Mostly used in small businesses, this structure involves hierarchy but few levels of it only. While it enables employee empowerment and self-management, it tends to spark rivalries among the workforce and may lead to business failure in extreme cases. 

  2. Functional Organisational Structure- This involves the traditional top-down hierarchy. Here there is a CEO, Vice Presidents, managers and officers. The biggest advantage of this is it brings in more efficiency and motivates employees more. On the other hand, there are chances of falter in the smooth flow of communication, loss of focus from the organisational objectives, etc. 

  3. Divisional Organisational Structure- This particular structure is developed based on product lines. There are divisions in the organisation and each division enjoys certain levels of independence. Such a company has a CEO or President as the highest authority but the departments under him are developed based on the line of products they are involved in. While it ensures improved efficiency, there is a high risk of work duplication.