matrix organization structure

Projectized and functional organizations are rigid by nature. In a functional structure, there is a little scope of change in the way they work. This causes issues dealing with projects. All staff cannot be temporary.

A projectized organization has a temporary structure. This is not a favorable condition for dealing with projects. They need some permanent staff to take care of regular activities.

This is where a matrix organization comes in; it has the best of both worlds. It allow organizations to choose the structure to suit their requirements. They can have an efficient and flexible structure.

The projectized and functional structures represent the two extreme points of a string, while the matrix organizational structure is a balance. It is a mix of two or more organizational structures.

This combination helps organizations achieve higher efficiency, readiness, and market adaptation. They can respond faster to customer demand with less product launch time. This structure is suitable for organizations operating in a dynamic environment.

However, a matrix structure is not suitable for a stagnant environment: for example, organizations with production operations. They have minimal scope to change. They should adopt the functional structure.

Matrix Organizational Structure

As per the PMBOK Guide, the matrix organization is a combination of the projectized and the functional structures.

In a matrix structure, the authority of a functional manager flows downwards, and the influence of the project manager flows horizontally. Hence, it is called a matrix organizational structure.

Employees may report many managers in a matrix organizational structure.

For example, let us say you are an engineer working in a functional department. Your organization gets a project, and they need an engineer to assist the project manager. You may be assigned to the project for a short period or be called you whenever they will need your services. You will have two bosses to report to.

The matrix structure is a composite of the projectized and the functional structure. Here, the knowledge, skills, or talent of an employee can be shared.

Functional managers will look after the functional part of the project. They may decide on the staff assignments. The project manager will have authority over the administrative part of the project: for example, carry out the work, follow-up on the schedule, evaluate the performance, etc.

Working in a matrix organization is challenging. Your role will be complex because you have many bosses. Work priorities, a clear reporting system, and responsibilities are important to avoid confusion and provide a better work environment in a matrix organization.

The matrix organization structure usually exists in large and multi-project organizations. Here they can move employees whenever and wherever their services are needed. The matrix structure has the flexibility of transferring the organization’s talent by considering employees to be shared resources.

Types of Matrix Organizational Structure

You can classify the matrix structure into three categories:

  • Strong Matrix Structure
  • Balanced Matrix Structure
  • Weak Matrix Structure

Strong Matrix Organizational Structure

In strong matrix organizations, the project manager has the authority and a full-time role. A full-time project management team will report them and they control the budget. This structure has the characteristics of a projectized organization.

The functional manager has a minimal role in a strong matrix organization.

Balanced Matrix Organizational Structure

In balanced matrix organizations, project and functional managers share the authority. The project manager has a full-time role, while project management staff will be part-time. Here, both managers control the budget.

Weak Matrix Organizational Structure

In weak matrix organizations, the project managers have limited authority. Their role is part-time and no administrative staff report to them. Their role is like a coordinator or an expediter. Here, the functional manager controls the project budget.

A weak matrix organizational structure resembles the characteristics of a functional organizational structure.

Advantages of a Matrix Organizational Structure

The following are a few advantages of a matrix organizational structure:

  • Highly skilled and capable resources can be shared. This allows open communication and knowledge sharing within the organization.
  • The matrix structure is dynamic. It allows employees to communicate across the boundaries and creates a pleasant, cooperative, work environment that helps to integrate the organization.
  • Employees can enhance their skills and knowledge by taking part in different projects. The matrix structure provides a good environment to learn and grow.
  • Employees are skilled in functional departments. Project teams can get these highly skilled employees whenever their services are needed.
  • Because of job security, employees will be faithful and perform well, meaning the efficiency of a matrix organization is higher.
  • Resource usage is optimal. You can get access to experts easily from your organization, and you can share equipment between projects. Negotiation is better in matrix organizations.

Disadvantages of a Matrix Organizational Structure

The following are a few disadvantages of a matrix organizational structure:

  • Employees may have to report to two managers which adds confusion and may cause conflict. This happens in a balanced matrix organization where both bosses have equal authority.
  • A conflict may arise between the project manager and the functional manager regarding authority.
  • Employees may be confused about their roles and responsibilities. Work priorities can cause conflict among employees if they are not well defined. This happens when employees are assigned a task different from what they were doing.
  • There can be competition for scarce resources. This may cause hostility and could impair the work.
  • It is generally perceived that matrix organizations have more managers than required, which increases overhead costs.
  • The workload tends to be high in a matrix organization. Employees have to do their regular work along with the additional project-related work. This can exhaust them. Employees may ignore their regular responsibilities if they are overtaxed.
  • A matrix structure is expensive to maintain. Organizations have to spend more to keep resources because all resources are not busy at all times and some are needed only for a short duration.

How to Overcome the Disadvantages of a Matrix Organizational Structure

Some of these disadvantages can be countered in the following ways:

  • There must be close cooperation between the project manager and the functional manager to avoid confusion and conflict.
  • Communication should be well defined and it should occur in all directions. This is important to gain support from executives, managers, supervisors, and employees.
  • Organizations must communicate their vision, objectives, and goals with their employees.
  • Power distribution between the project and the functional manager should be kept properly. Any imbalance may impact the effectiveness of operations.
  • Any conflict between the project manager and the functional manager must be resolved as quickly as possible and in private.
  • Roles and responsibilities should be clear and communicated to employees to avoid confusion.

Summary

Big organizations have dynamic environments. They need to respond quickly to customer requirements and market demand, meaning a matrix structure is suited to them. This allows for better resource utilization and provides experts when needed. The matrix organizational structure tries to blend the best of both worlds: the power-sharing between the project and functional manager change according to the matrix.

This concludes this blog post on the matrix organizational structure. If you have something to share, please do so in the comments section below.

This is an important topic from a PMP exam point of view.

Reference: Alternative Organizational Structures 1976 and “Is the Matrix Fad a Fast Fading Flower?” 1984, Bob Youker.

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Speak Your Mind

  • You lost me in the first paragraph. What is “scope of change”? I’ve never heard this term in this context before.

    Also, you mentioned that manufacturing environments are “stagnant”. This term in this context also left me baffled. Did you mean “rigid” or that manufacturing work is “well defined” and does not need flexibility?

    This blog post would have helped me more if you wrote it assuming the person did not know much about the subject to begin with. For instance, include a few example businesses in greater detail in which you discuss the roles of the jobs people are doing and how the type organization (matrix versus functional) might influence the way their work is done.

    Also, if English is not your first language, perhaps having someone else proofread your writing first for understandability would be helpful.

    • Project and functional organization has well defined set of procedures and changing these procedures is not easy.

      I am sorry for the confusion, I will try to update the blog to make it better.

  • hi , thank you for you provided knowledge of Matrix Organization Structures, could you please tell me the data (day/month/year/) you post this blog article? as I need to use it as one of my reference. thank you so much.

  • Thank you Fahd for your description of the matrix organizational structure. Do you also have notes on leadership styles?i hope you do because this platform is really helping me a lot. Thanx bro you rock please reply??????

  • I did not understand your question John.

    Organization structure is not something you build or change often. It is the system which supports your working environment.

  • Fahad, Thank you your information on Matrix Organization Structures.

    So based on all the post, would you happen to have a Pros and Cons for organizations attempting to build a matrix structure for, say, an IT company? And is the Matrix Organization Structure ideal for IT companies who use the Agile Software processes? Could you please explain? Thanks in advance.

  • A well explained and understandable piece. I would like to know the difference between power struggles because the two seem to be interrelated

  • Thanks so much for this.I have a quick question.
    Assuming you were given a question like this:
    A construction company which undertakes building projects as and when they are contracted to is looking to hire a consultant to help them develop an organizational structure.Which structure will you suggest?
    I chose matrix because I think it is the most suitable one and after reading your article I realized that under the matrix,the balanced system would be a good idea
    Can I please have your opinion as well?

    • Any medium sized organization producing a product can be an example of weak matrix, the organization involve in projects only can be an example of strong matrix.

      Big organization involved in project and production can be an example of balanced matrix such as apple or google. These are always busy with many projects and production process.

  • Can you give some real life example of structuring matrix organization in a large conglomerate? As I understand, to adopt the matrix structure, there must still be functional structure, right? So basically the whole organization is still either functional, or divisional structure and then they add matrix structure to get the functional members to a project team?
    – In Functional organization, there will be big silos of functions and matrix structure will be created by taking the employees of each required function and add them to a project team. When project team finish, they dissolve?
    – In Divisional organization, there are duplication of functions in each division. Matrix structure will be created by the same as above but there will be different matrix team in different divisions?

    Do I understand correctly?

    • You can take example of Apple. They have many projects running all the time and they also have support, production, finance and admin departments as well.

  • hi, this confuses me alot. i am trying to do an assignment on this and i dont seem to understand any of it. everything is confusing me to be honest, nothing makes sense anymore?

  • So, is the matrix structure considered a centralized or decentralized when it comes to decision-making authority?

    I’m not sure who exactly make the call – group decision, functional managers, or project managers?

    Any, this article is really helpful .Good work. 🙂

  • Is the Matrix Business Organization and Matrix Organization Structure is the same? I ask because I have going to report about that but I don’t know how to do I didn’t understand that well. Please help me please

  • very nice.. but kindly explain me which type of structure is very best? i have an assignment on this so kindly just tell me which one is best and why????

  • Great post, explained very well.
    Could you please give an example on which aspects an employee should report to the different managers:functional and project manager, let s say in a large company?
    Thanks

  • Hi Fahad.. I am reading ur notes. very much detailed and useful. Thanks for sharing.

    In which organization structure(fun/proj/matrix) communication is more complex.

  • Matrix organisation structure is the preferred structure for companies to adopt, to share knowledge and resources ,again improve communication which is the most critical element in project management. THANK YOU.

  • i have come across composite matrix organization (a fourth classification after weak, balanced and strong matrix organization) in one of the books related to PMP. Can you clarify how it is different from other matrix organisations.

    • If the organization involve all these types of matrix organization structure at different level, they are referred to as a composite organization. (Reference: The PMBOK Guide fifth edition, page: 25-26)

    • Of course, the project manager would like to work in a projectized organization or the strong matrix organization.

    • As per my understanding, if not managed properly, the communication can be difficult in the balance matrix organization because employee may have two equally powerful bosses.

  • Very Well explained. It is very true if there is good co-ordination and understanding between Functional Manager and Project Manager there is efficient use of Resources and cost savings

  • I think it is important to remember that organizational designs (like a Matrix) are only as good as the balance that a company has between the organizational design and the contextual organizational culture in which the design is being implemented…great designs often fail because the (as Handy calls it) the balance (of the God’s) does not support the culture…which in turn…does not underpin the proposed organizational design…but culture is difficult to get your hands around…Talk to me if you have any thoughts here…or need some consulting help…

  • Good post, thanks

    A matrix structure is not only for projects and exists anywhere that people have more than one formal boss. Its the structure of choice for large complex orgnaizations everywhere.

    For more on the matrix you might enjoy my new book “Making the Matrix Work – how matrix managers engage people and cut through complexity”

  • Hi, just checking to see if you have opportunities for PM or BA instructors/consultants. If so let me know and I can send you a resume. I have been doing both virtual and classroom training over the past 10 + years.

    Terrell Smith, PMP, CBAP, MPA

    • Sorry Terrell, I don’t provide training to PMP aspirants. I think you should contact simplilearn or PM Study etc for training opportunities.

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