Matrix Organizational Structure: Pros and Cons for Using It

By Indeed Editorial Team

Updated June 16, 2022 | Published December 12, 2019

Updated June 16, 2022

Published December 12, 2019

When a business initiates a project, it's important to have an organizational structure in place to define all the aspects of the task. These different aspects of a project can include a variety of activities and processes, from task allocation to budgeting. The matrix organizational structure can offer flexible ways for businesses to work on projects, however, it may be difficult to initially implement due to the multiple aspects of a project.

In this article, we discuss what a matrix organizational structure is, what roles it includes, and the pros and cons of using this template for organizing a project.

What is a matrix organizational structure?

The matrix organizational structure is a combination of two or more different kinds of organizational structures, such as project management or functional management. Additionally, the matrix structure is composed of both a traditional hierarchy of management, where employees are managed by a functional manager, as well as additional project managers who can manage employees across different departments. These two or more managerial systems intersect on a grid or matrix.

How did the matrix organizational structure originate?

The matrix organizational structure originally arose out of the aerospace industry in the 1960s when firms who wanted to contract with United States government employees needed to create specific charts to show the structure of the project management team. The matrix structure has been adopted by organizations that take on large-scale and complex projects that may not be efficiently completed within a single department in the organization.

However, even if some projects aren't classified as large-scale, they can still be incredibly complex. The matrix organizational structure allows for more collaboration between departments rather than searching for solutions from the top down. Drawing from different departments can allow an interdisciplinary team to view a complex project from a variety of professional angles and work together to come up with dynamic solutions to different problems.

How to use a matrix organizational structure

Within the matrix organizational structure, the functional manager might manage their team by department, typically outlined vertically on the matrix. For example, if you work in administration, you might report to the administrative manager, who may then report to an executive director.

In addition to the vertical and functional outline, the project manager might manage their teams across different departments, generally outlined horizontally within the matrix. For instance, the project manager might draw their team members from the administrative, human resources and marketing teams. Both the functional and project managers oversee members of the same project team, which means that team members effectively have two bosses who they may report to directly.

The matrix structure may oftentimes be adopted by companies that need to manage daily operations in conjunction with ongoing projects. It can allow a company to maintain its departmental structure while projects are in progress. Similarly, the matrix structure may include employees from different departments to work collaboratively on projects. All projects the team members may be working on can eventually be completed while their functional roles within the organization are permanent.

Roles within the matrix organizational structure

The matrix organizational structure provides an outline for a project that may demand a more global approach. Additionally, such a project may necessitate the skills and expertise of different employees in other departments to find dynamic solutions to complex problems. In an outlined matrix structure, both the functional manager and project manager have equal authority over project team members, and each may have roles outlined within the matrix.

Read more: How To Be a Good Manager

Managerial roles

Both functional and project manager roles can be outlined in the matrix organizational structure. Outlined in a grid fashion, the functional managers and project managers are role-specific and are included within the matrix. Functional managers oversee entire departments of an organization. For example, a company could have human resources, marketing, operational and finance departments. Each employee within the human resources department, for example, might report to the human resources department manager.

The project managers work across the matrix, or horizontally, bringing together team members from different departments to work on and offer input on a single project. For instance, the marketing and finance department may be consulted for working on the budget and any strategies for a new ad campaign. A project manager could also draw team members from all the organization’s departments for a single project.

Additionally, the matrix structure allows the managerial roles to be changed depending on the company’s needs and its current projects. In some cases, for example, a project manager might play more of a coordinating role. In other cases, the project manager may have as much superiority as (or sometimes more than) a traditional functional manager.

Functional and project managers may be required to communicate with each other to clarify what each manager expects from their employees. Additionally, weekly or daily communication with employees can be necessary to clarify any questions or misunderstandings, as well as give actionable feedback to employees as they do their work.

Team members

Team members may need to perform their functional roles within the company and perform separate tasks for the project manager. When team roles are outlined using a matrix structure, employees may often be required to communicate consistently with both managers, detailing their overall progress and clarifying any misconceptions of what work they are responsible for.

Related: 6 Tips for Effective Teamwork

Advantages of the matrix organizational structure

There are several advantages to using the matrix organizational structure. One benefit of the matrix structure is that it allows cross-collaboration between staff and departments that may not always have opportunities to work together. There are several other key advantages as well:

1. Collaboration between different departments

Perhaps the biggest advantage of a matrix structure is that it brings together highly skilled team members from different departments, allowing the organization to capitalize on the resources it already has rather than seeking expertise and recruiting project team members from outside of the organization.

2. Combines project and functional management structures

The matrix structure combines the project management structure with the functional management structure to increase efficiency, adapt to changing markets and respond more quickly to market demand.

3. Allows interdepartmental communication

The matrix structure also allows for better interdepartmental communication and collaboration. By allowing different departments to work together, the matrix structure fosters a more open work environment, ultimately making the organization more dynamic. 

4. Employees can develop new skill sets

The matrix structure can offer employees the opportunity to strengthen their interpersonal skills, communication skills and new skill sets due to the nature of utilizing more than one manager. Working outside of a traditional or hierarchal structure can benefit employees by helping them develop new skill sets and gain valuable experience from working with different departments.

5. Team members and managers keep their functional roles

Projects will always continue to come to an end, but project team members and managers may keep their functional roles throughout the project. When a project ends, both managers and team members can avoid misconceptions about their job security or searching for new projects as a contractor, as they may simply assume their functional roles. Additionally, team members may also participate in future projects.

Read more: The Essential Functions of Management

Disadvantages of the matrix organizational structure

Conversely, the matrix structure may sometimes be difficult in achieving total structure in an environment where managers hold equal superiority over their shared team members. Additionally, team members might have misconceptions about how they are expected to divide their time between their functional duties and their project responsibilities. There can sometimes be several key disadvantages to using a matrix structure:

1. Managerial roles may not be clearly defined

One common disadvantage of the matrix structure can appear as confusion among managers who are involved with projects that are outlined by the matrix. Since the power dynamics between the functional manager and the project manager may not be as clearly defined within the matrix, confusion about the specific managerial roles may arise.

2. Team roles may not be clearly defined

Another issue is when team members’ roles aren’t clearly defined in the project or the division of responsibilities between employees’ functional roles and project roles isn’t clear.

3. The decision-making process can be slowed down

Because of the nature of the matrix involving more than one manager, decisions that may be required to pass through both managers can sometimes take longer to process than in a traditional structure. Furthermore, with the integration of multiple managers and team members, decisions that require multiple steps, for instance, in quality assurance, can be slowed down when guided by the matrix.

4. Too much work can cause overload.

The matrix organization structure can also sometimes lead to work overload on team members since their project workload is often in addition to their regular functional duties. Employees might suffer burnout or overlook or fail to complete tasks or have their quality of work suffer due to time constraints.

5. Measuring employee performance might become difficult.

Oftentimes, when implementing a matrix structure, it may be difficult to gauge employee performance when working on a project. This is in part because team members may be essentially performing more than one role, both functionally and the tasks within the project.

Ultimately, with careful planning, clear expectations and open, effective communication, the matrix organizational structure can be an advantageous method of organizing multiple roles and departments when undertaking a large-scale project.

Related: Using Performance Management in the Workplace

Tips for using the matrix organizational structure

If you choose to implement the matrix organizational structure, you might consider how to address key details as they arise when outlining manager and team roles. Some key details to consider when outlining your project within the matrix may include:

Manage expectations from different managers

Consider how you will outline each expectation of the managers involved with the project. For example, the project manager might be expected to report on the overall progress of the project while the marketing manager might be expected to produce a result.

Keep employees accountable for their work

When planning projects within a matrix structure, you might consider methods to increase employee engagement and hold staff accountable for their work. For example, you might require employees to fill out a weekly report template outlining tasks completed toward the project.

Maintain communication between managers and employees

Consider setting criteria for communication between the different managers and team members. For instance, you might consider weekly chats through an office communication app to get a quick overview of the project’s progress from all departments involved.

Develop relationships between departments

You might offer opportunities for the involved departments to collaborate so that each manager and team have a clear understanding of how they may be working together.

Clarify managerial expectations

Consider having managers outline clear expectations of what each of their team members will be responsible for. For instance, you might suggest the project manager outline due dates for specific milestones within the project scope.

Give employees the necessary resources

You might also consider which resources and tools employees might need to complete the project. Additionally, you may consider addressing any employee misconceptions about what the project entails overall, as well as what tasks they may be responsible for.

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