Matrix Organizations
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| − | + | ''Article developed by Linda Zviedre'' | |
| − | + | The article offers the reader an insight into a concept called matrix organization - an organizational structure that allows cross-functional collaboration for better resource allocation. Matrix structure is relevant for project, program, and portfolio managers, however, matrix organizations are mostly associated with different projects and the structure helps defining the boundaries between the authority of managers, budget allocation, as well as initiating a smooth information flow. | |
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| − | + | ==Abstract== | |
| + | An organization can be defined as a group of people who work together in an organized way for a shared purpose <ref> Cambridge Dictionary. (n.d.). Citation. In Cambridge English Dictionary. Retrieved February 11, 2022 from https://dictionary.cambridge.org/dictionary/english/organization. </ref>. The way an organization is structured can affect the number of resources available for the particular project or function within the organization as well as how different projects are carried out <ref name = "PMBOK">Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Fifth Edition ed., Pennsylvania: Project Management Institute, Inc., 2013. </ref>. At the beginning of the 20th century, many organizations obtained their ways of working, either by structuring their work with a larger focus on projects (projectized structure) or groups with similar roles and expertise (functional structure). In the 1960s aerospace organizations saw a need of adopting a new approach that would combine the knowledge from various industries, and the third approach, called matrix organization, was found. | ||
| + | [[File:MatrixOrganizations.png|thumb|400px| Figure 1. A general organization with a matrix structure. Adapted from Moodley et al. (2015) <ref> Moodley, D., Sutherland, M., & Pretorius, P. (2016). Comparing the power and influence of functional managers with that of project managers in matrix organisations: The challenge in duality of command. South African Journal of Economic and Management Sciences, 19(1), 103–117. https://doi.org/10.4102/sajems.v19i1.1308 </ref>]] | ||
| − | + | Project Management Institute defines Matrix Organization as ''any organizational structure in which the project manager shares responsibility with the functional managers for assigning priorities and for directing the work of persons assigned to the project'' <ref name = "PMBOK"/>. This means that in matrix organizations there are generally two managers to report to, and the managers must collaborate for better resource allocation, as well as unified knowledge-sharing. Matrix organizational structure is commonly applied when an organization is focusing on projects and technical support across different functions and fields is needed <ref name = "Kuprenas"> Kuprenas, John A. Implementation and performance of a matrix organization structure. International Journal of Project Management 21 (2003), p.51-62 </ref>. An illustration of an organization with a matrix structure is shown in Figure 1. | |
| − | + | Generally, there are three types of matrix organizations, based on the influence of each manager: weak matrix, balanced matrix, and strong matrix. | |
| − | + | ==Overview of matrix types and characteristics== | |
| + | The following section will describe matrix organization types in-depth and their intricacies associated with projects and their characteristics. | ||
| − | + | When describing a cross-functional organization, three common types can be associated with matrix organizations: | |
| + | * Weak matrix: the matrix has a high functional-manager influence and weak project manager link to the project. The staff mainly reports to their functional manager who is the main decision-maker in the process. | ||
| + | * Balanced matrix: the matrix has both functional and project manager involvement, although the functional manager has authority over the resources of the project. The staff reports to both functional and project managers. | ||
| + | * Strong matrix: project manager's link to the project is dominant. The project manager has the most influence on the decision-making process, resources, and task allocation. | ||
| − | + | The level of the project manager’s involvement in the activities determines the strength of the matrix organization a business has. The more involved the project manager is in the cross-functional team, the more authority over resources he or she has, however, a functional manager can still affect the way a project team carries out their assignment. | |
| + | ===Project characteristics for different matrix types=== | ||
| − | + | The management of matrix organizations oversees the team co-operation and communication both within the project team as well as a functional organization. An overview of the matrix structure types and project characteristics is illustrated in Figure 2 <ref name = "PMBOK"/>. | |
| − | + | [[File:Matrix-characteristics.png|thumb|600px|Figure 2. An overview of project characteristics in matrix organizations. Adapted from Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide) <ref name = "PMBOK"/>.]] | |
| − | + | From three types of matrix organizations, the ''weak matrix'' has low project manager’s authority, and most of the authority comes from functional management’s side. Resource availability to carry out projects is low and the entire project’s budget holder is the functional manager. The project manager and their administrative staff are working with the project team only part-time. The staff of the project report mainly to their functional manager (for example, IT Team A reports to the IT functional department manager). | |
| − | + | When the strength of the matrix is increased, the project manager and their administrative staff work with the team full-time. This means that the project manager's involvement in the project is increased, and most of their work revolves around this team. The project team can observe that the project manager has more focus on the team, and the functional manager becomes secondary for the project team. | |
| − | + | A ''balanced matrix'' from its name implies that the strength between the project manager and functional manager is balanced. Both managers collaborate together and hold the budget, however, the functional manager still has higher control in the decision-making process. The staff reports to both a project and functional manager. Because the functional manager still has more authority over the project, the resource availability is only low to moderate, and the project manager has lower influence over the team. | |
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| − | + | A ''strong matrix'' suggests that the project manager has the most authority over the project and its budget. Therefore, the project manager decides how the budget is allocated within the project, what is to be prioritized and how certain tasks within the project are to be achieved. The resource availability within the project team is also increased, from low-to-moderate to moderate-to-high. The staff primarily reports to the project manager, however, the functional manager is also involved in the process of project development. | |
| − | == | + | ==Application== |
| − | + | Matrix organizational structures are often complex and require managers that can oversee several units within the project. Moreover, the environment in which matrix organizations are commonly applied with success is unpredictable and complex, such as medicine or space industries <ref> Burton, R. M., Obel, B., & Håkonsson, D. D. (2015). How to get the Matrix Organization to Work. Journal of Organization Design, 4(3), 37. https://doi.org/10.7146/jod.22549 </ref>. According to Slack et al. (2016), matrix organizations require four main characteristics for their application <ref> Slack, N., Brandon-Jones, A., & Johnston, R. (2016). Operations Management (8th ed.). Pearson Canada. </ref>: | |
| − | + | * ‘’Communication between managers.’’ All managers that are participating in the project development must communicate effectively for better decision-making and resource allocation. Without communicating the actions and progress, the managers are increasing the risk for the increase of conflicts and sabotaging the success of the project. | |
| + | * ‘’Management conflicts.’’ A formal policy of managing conflicts must be developed to avoid confusion when a conflict arises. The policy ensures a proper guideline on the steps that must be taken to resolve a conflict and avoid it in the future. | ||
| + | * ‘’Commitment.’’ The project team must clearly understand why a particular matrix structure is implemented in the organization and how it contributes to the development of a product or service. The team should be committed both to the project(s) as well as their functional department. When the vision is aligned and communicated in the team, running the project becomes less complicated from the motivation perspective. | ||
| + | * ‘’Role of project management.’’ The project manager has a role of coordination which involves the planning of the resources, budget, and time. Depending on the strength of the matrix, the project manager devotes different amounts of his or her own resources towards the project. | ||
| + | |||
| + | Some examples of modern matrix organizations have been observed. For example, Apple has incorporated a weak matrix in their organizational structure, allowing the software and hardware functional structures to work together and the leadership team to determine the direction of the project <ref> Meyer, P. (2022, January). Apple Inc.’s Organizational Structure & Its Characteristics (An Analysis). Panmore Institute. http://panmore.com/apple-inc-organizational-structure-features-pros-cons#:~:text=Apple%20Inc.%20has%20a%20hierarchical,as%20for%20iOS%20and%20macOS.</ref>. Starbucks, a famous coffeehouse company, has also adopted a matrix structure by defining functional and product-based divisions, where each store manager oversees the operations in their store and functional managers oversee the jurisdictions <ref> Cuofano, G. (2021, March 29). Starbucks Organizational Structure In A Nutshell. FourWeekMBA. https://fourweekmba.com/starbucks-organizational-structure/#:%7E:text=Starbucks%20follows%20a%20matrix%20organizational,chains%20of%20command%20and%20divisions. </ref>. | ||
| + | Although matrix structures are commonly seen in more complex product-oriented industries, recent examples show that it is also possible and even beneficial for other industries to apply matrix structure in their everyday life. Many companies see the matrix structure as a benefit to their operational efficiency, information transparency, and increased collaboration between different functional departments. | ||
==How to make the matrix organization work== | ==How to make the matrix organization work== | ||
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# Build a Culture of Trust. Matrix structure involves multiple managers and teamwork, therefore nurturing the trust within the organization is essential. When the culture of trust is not built, the teams are directly affected by problems of conflicts and mistrust in the organization as such. McPhail suggests several tools that can enhance trust, for example, project kickoff meetings, personality assessments of project teams, social events, intrinsic and extrinsic rewards, and tracking of the project success. | # Build a Culture of Trust. Matrix structure involves multiple managers and teamwork, therefore nurturing the trust within the organization is essential. When the culture of trust is not built, the teams are directly affected by problems of conflicts and mistrust in the organization as such. McPhail suggests several tools that can enhance trust, for example, project kickoff meetings, personality assessments of project teams, social events, intrinsic and extrinsic rewards, and tracking of the project success. | ||
| − | Adopting these six principles can improve the matrix organization in a business. However, it is not enough to adopt the principles once and think that the organization will succeed. Davis and Lawrence (1977) imply that "a successful matrix must be grown instead of installed" <ref>Lawrence, P. R., Kolodny, H. F., & Davis, S. M. (1977). The human side of the matrix. Organizational Dynamics, 6(1), 43–61. https://doi.org/10.1016/0090-2616(77)90034-1</ref>. The organization must create grounds for matrix organization and build around it, allowing for flexibility of changes and structure associated with the organization itself rather than the generic model of implementation. The collaboration between different managers and their teams should be run smoothly and potential conflicts and their action plan must be discussed. Continuous improvement over the organizational work as well as reviewing the principles is required for making the matrix organization work. | + | Adopting these six principles can improve the matrix organization in a business. However, it is not enough to adopt the principles once and think that the organization will succeed. Davis and Lawrence (1977) imply that "a successful matrix must be grown instead of installed" <ref>Lawrence, P. R., Kolodny, H. F., & Davis, S. M. (1977). The human side of the matrix. Organizational Dynamics, 6(1), 43–61. https://doi.org/10.1016/0090-2616(77)90034-1</ref>. The organization must create grounds for matrix organization and build around it, allowing for flexibility of changes and structure associated with the organization itself rather than the generic model of implementation. The collaboration between different managers and their teams should be run smoothly and potential conflicts and their action plan must be discussed. Continuous improvement over the organizational work as well as reviewing the working and cultural principles is required for making the matrix organization work. |
| + | |||
| + | ==Strengths and weaknesses of matrix organizations== | ||
| + | |||
| + | There are contradicting opinions on the different strengths and weaknesses of matrix organizations. Research suggests that different authors can see the same characteristic of a matrix organization both as a strength and a weakness <ref name = "PL"> Goś, K. (2015). The Key Advantages and Disadvantages of Matrix Organizational Structures. Studia i Materiały Wydziału Zarządzania UW, 2015(2), 66–83. https://doi.org/10.7172/1733-9758.2015.19.5 </ref>. However, the main advantages associated with the matrix organizational structure include efficiency, both in terms of resource allocation and information flow. Staff can be both sourced to a project and also contribute to other parts of the organization, such as their functional department or other projects. The information flow is more transparent, allowing the organization to share the knowledge and see the progress of each functional team. Matrix organizations are also possessing stronger project characteristics, since the structure allows for better project management practices <ref name = "SW"> Cristóbal, J. S., Fernández, V., & Diaz, E. (2018). An analysis of the main project organizational structures: Advantages, disadvantages, and factors affecting their selection. Procedia Computer Science, 138, 791–798. https://doi.org/10.1016/j.procs.2018.10.103 </ref>. Lastly, the project manager has a great responsibility in managing their team which requires them to be trained to work in cross-functional teams. Matrix structure offers the project manager not only large responsibility for the budget and tasks but also the staff that works for the project with them. It is an opportunity to learn more about managing different teams and collaborating across functions. The matrix organizational structure opens an opportunity for the business to have accessible information flow where different functional structures can contribute to moving the organization forward. | ||
| + | |||
| + | Apart from the advantages that matrix organizational structure brings, several disadvantages are identified. Because matrix organizations involve a lot of planning around administrative changes and staff resource allocation for different projects, the main disadvantage is the high administrative costs. However, Middleton argues that if the matrix organization is mature, the additional overhead costs even out due to an increase in efficiency <ref> C.J. Middleton, “How to Set Up a Project Organization,” HBR March–April 1967, p. 73. </ref>. Another disadvantage of matrix organization is connected to the conflicts that can potentially arise in such a setup. Because matrix organizations involve a line and a project reporting manager, it can potentially cause a conflict if the expectations and procedures for conflict management are not clearly defined <ref name = "SW"/>. This essentially means that staff must understand how the managers work together as well as how the reporting must be executed. If there are no clear guidelines and objectives in how conflicts are mitigated, the organization can face difficulties managing the employees and their progress. Lastly, the members of matrix organizations can also work on several projects at the same time, causing a disadvantage in understanding who the employee must report to on the prior basis – their project manager or the functional manager the person belongs to. This means that during employee’s utilization for several projects, an employee spends fewer resources per one project, at the same time being excessively utilized in several projects at the same time. | ||
| + | |||
== Conclusion== | == Conclusion== | ||
| − | Matrix organizations are complex and a need for a clear structure of making them work in practice is apparent. The matrix organizations are utilized the best in complex and uncertain environments, where resource allocation is required for different projects. There are many advantages associated with matrix structures, such as improved efficiency, better information flows across functions in the organization as well as clear project-oriented goal alignment. Some of the disadvantages include complexity in reporting to several managers, potential conflicts that might arise due to several | + | Matrix organizations are complex and a need for a clear structure of making them work in practice is apparent. The matrix organizations are utilized the best in complex and uncertain environments, where resource allocation is required for different projects. There are many advantages associated with matrix structures, such as improved efficiency, better information flows across functions in the organization as well as clear project-oriented goal alignment. Some of the disadvantages include complexity in reporting to several managers, potential conflicts that might arise due to several managers being involved in the structure, as well as higher administrative costs for the organization. Several reports suggest that a need for further research of redesigning the matrix organization for modern organizations is required <ref name = "SW"/>, <ref name = "PL"/>, <ref name = "Kuprenas"/>. Great control over conflict management, resource allocation, and clear objectives with the help of project management tools makes matrix organizations successful and thriving in the modern world. |
| + | |||
| + | ==Annotated bibliography== | ||
| + | * Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Fifth Edition ed., Pennsylvania: Project Management Institute, Inc., 2013. | ||
| + | The book describes important tools and concepts related to project management. Matrix organizational structure in this book is described as well as compared to other organizational structures. A good visual overview of the organizational types is shown, allowing the reader to understand the concept better. The book is widely used by project managers and researchers and is also relevant for the author. | ||
| + | * Goś, K. (2015). The Key Advantages and Disadvantages of Matrix Organizational Structures. Studia i Materiały Wydziału Zarządzania UW, 2015(2), 66–83. | ||
| + | The article is a comprehensive study on the matrix organizational structures, different research contributions to the topic, and how researchers perceive matrix organization characteristics (as an advantage, disadvantage, or both). The article analyzes the available literature on matrix organizations and draws a conclusion that there is very little up-to-date knowledge on how to keep matrix organizations successful. There are further steps described on how to keep the modern matrix organizations functioning. | ||
| + | * Cristóbal, J. S., Fernández, V., & Diaz, E. (2018). An analysis of the main project organizational structures: Advantages, disadvantages, and factors affecting their selection. Procedia Computer Science, 138, 791–798. | ||
| + | This state-of-the-art article provides a lot of information on the factors that shape the organizational structure, a comparison between the organizational structures in-depth, as well as advantages and disadvantages of each of the organizational structures. The article also engages project managers to think about organizational structures more rationally and suggests future research topics for complexity measurement in organizations. | ||
| − | == | + | == References == |
<references /> | <references /> | ||
Latest revision as of 21:42, 17 March 2022
Article developed by Linda Zviedre
The article offers the reader an insight into a concept called matrix organization - an organizational structure that allows cross-functional collaboration for better resource allocation. Matrix structure is relevant for project, program, and portfolio managers, however, matrix organizations are mostly associated with different projects and the structure helps defining the boundaries between the authority of managers, budget allocation, as well as initiating a smooth information flow.
Contents |
[edit] Abstract
An organization can be defined as a group of people who work together in an organized way for a shared purpose [1]. The way an organization is structured can affect the number of resources available for the particular project or function within the organization as well as how different projects are carried out [2]. At the beginning of the 20th century, many organizations obtained their ways of working, either by structuring their work with a larger focus on projects (projectized structure) or groups with similar roles and expertise (functional structure). In the 1960s aerospace organizations saw a need of adopting a new approach that would combine the knowledge from various industries, and the third approach, called matrix organization, was found.
Project Management Institute defines Matrix Organization as any organizational structure in which the project manager shares responsibility with the functional managers for assigning priorities and for directing the work of persons assigned to the project [2]. This means that in matrix organizations there are generally two managers to report to, and the managers must collaborate for better resource allocation, as well as unified knowledge-sharing. Matrix organizational structure is commonly applied when an organization is focusing on projects and technical support across different functions and fields is needed [4]. An illustration of an organization with a matrix structure is shown in Figure 1.
Generally, there are three types of matrix organizations, based on the influence of each manager: weak matrix, balanced matrix, and strong matrix.
[edit] Overview of matrix types and characteristics
The following section will describe matrix organization types in-depth and their intricacies associated with projects and their characteristics.
When describing a cross-functional organization, three common types can be associated with matrix organizations:
- Weak matrix: the matrix has a high functional-manager influence and weak project manager link to the project. The staff mainly reports to their functional manager who is the main decision-maker in the process.
- Balanced matrix: the matrix has both functional and project manager involvement, although the functional manager has authority over the resources of the project. The staff reports to both functional and project managers.
- Strong matrix: project manager's link to the project is dominant. The project manager has the most influence on the decision-making process, resources, and task allocation.
The level of the project manager’s involvement in the activities determines the strength of the matrix organization a business has. The more involved the project manager is in the cross-functional team, the more authority over resources he or she has, however, a functional manager can still affect the way a project team carries out their assignment.
[edit] Project characteristics for different matrix types
The management of matrix organizations oversees the team co-operation and communication both within the project team as well as a functional organization. An overview of the matrix structure types and project characteristics is illustrated in Figure 2 [2].
From three types of matrix organizations, the weak matrix has low project manager’s authority, and most of the authority comes from functional management’s side. Resource availability to carry out projects is low and the entire project’s budget holder is the functional manager. The project manager and their administrative staff are working with the project team only part-time. The staff of the project report mainly to their functional manager (for example, IT Team A reports to the IT functional department manager).
When the strength of the matrix is increased, the project manager and their administrative staff work with the team full-time. This means that the project manager's involvement in the project is increased, and most of their work revolves around this team. The project team can observe that the project manager has more focus on the team, and the functional manager becomes secondary for the project team.
A balanced matrix from its name implies that the strength between the project manager and functional manager is balanced. Both managers collaborate together and hold the budget, however, the functional manager still has higher control in the decision-making process. The staff reports to both a project and functional manager. Because the functional manager still has more authority over the project, the resource availability is only low to moderate, and the project manager has lower influence over the team.
A strong matrix suggests that the project manager has the most authority over the project and its budget. Therefore, the project manager decides how the budget is allocated within the project, what is to be prioritized and how certain tasks within the project are to be achieved. The resource availability within the project team is also increased, from low-to-moderate to moderate-to-high. The staff primarily reports to the project manager, however, the functional manager is also involved in the process of project development.
[edit] Application
Matrix organizational structures are often complex and require managers that can oversee several units within the project. Moreover, the environment in which matrix organizations are commonly applied with success is unpredictable and complex, such as medicine or space industries [5]. According to Slack et al. (2016), matrix organizations require four main characteristics for their application [6]:
- ‘’Communication between managers.’’ All managers that are participating in the project development must communicate effectively for better decision-making and resource allocation. Without communicating the actions and progress, the managers are increasing the risk for the increase of conflicts and sabotaging the success of the project.
- ‘’Management conflicts.’’ A formal policy of managing conflicts must be developed to avoid confusion when a conflict arises. The policy ensures a proper guideline on the steps that must be taken to resolve a conflict and avoid it in the future.
- ‘’Commitment.’’ The project team must clearly understand why a particular matrix structure is implemented in the organization and how it contributes to the development of a product or service. The team should be committed both to the project(s) as well as their functional department. When the vision is aligned and communicated in the team, running the project becomes less complicated from the motivation perspective.
- ‘’Role of project management.’’ The project manager has a role of coordination which involves the planning of the resources, budget, and time. Depending on the strength of the matrix, the project manager devotes different amounts of his or her own resources towards the project.
Some examples of modern matrix organizations have been observed. For example, Apple has incorporated a weak matrix in their organizational structure, allowing the software and hardware functional structures to work together and the leadership team to determine the direction of the project [7]. Starbucks, a famous coffeehouse company, has also adopted a matrix structure by defining functional and product-based divisions, where each store manager oversees the operations in their store and functional managers oversee the jurisdictions [8]. Although matrix structures are commonly seen in more complex product-oriented industries, recent examples show that it is also possible and even beneficial for other industries to apply matrix structure in their everyday life. Many companies see the matrix structure as a benefit to their operational efficiency, information transparency, and increased collaboration between different functional departments.
[edit] How to make the matrix organization work
Making matrix organization work is a complex process with many uncertainties. However, McPhail suggests six steps in making the matrix organization work [9]:
- Conduct Goal Alignment. Employees in the organization must work together towards the mission and have a common sense of the goal. The management team has to clearly define the vision of the project as well as the key priorities.
- Define the Matrix. Matrix organizations are project-oriented, therefore the resources associated with the projects must be set and prioritized. Moreover, many projects can mean higher complexity in project management, which requires a clear plan for making the projects successful.
- Establish Key Performance Indicators (KPIs). A clear definition of KPIs in an organization can show how the performance is being measured as well as the current progress over the specific project. It allows different managers to track the status quo of the objectives and compare it to the objectives set by different project and functional managers. It is the staff's responsibility to deliver on KPIs within the allocated time and budget of the project. The tracking process of KPIs can be easily visualized with different dashboard tools (both company-specific tools as well as publicly available resources).
- Conduct Role Clarification Sessions. Often employees in an organization might feel confused when to report to a certain manager and when the progress of a project must be documented. When roles are clarified, employees have a clear understanding of the responsibility and expectations from higher management. When the roles are not aligned, teams can often experience conflicts causing waste of resources and effectiveness.
- Provide Professional Development. When a project is finished, an employee can be sent to work on a different project with different expectations and skillset. When an organization provides professional development, employees can avoid misunderstandings as well as improve their knowledge on areas that are less known to them. Professional development must be provided by senior staff and team members should be involved in the process of identifying the needs for the next project.
- Build a Culture of Trust. Matrix structure involves multiple managers and teamwork, therefore nurturing the trust within the organization is essential. When the culture of trust is not built, the teams are directly affected by problems of conflicts and mistrust in the organization as such. McPhail suggests several tools that can enhance trust, for example, project kickoff meetings, personality assessments of project teams, social events, intrinsic and extrinsic rewards, and tracking of the project success.
Adopting these six principles can improve the matrix organization in a business. However, it is not enough to adopt the principles once and think that the organization will succeed. Davis and Lawrence (1977) imply that "a successful matrix must be grown instead of installed" [10]. The organization must create grounds for matrix organization and build around it, allowing for flexibility of changes and structure associated with the organization itself rather than the generic model of implementation. The collaboration between different managers and their teams should be run smoothly and potential conflicts and their action plan must be discussed. Continuous improvement over the organizational work as well as reviewing the working and cultural principles is required for making the matrix organization work.
[edit] Strengths and weaknesses of matrix organizations
There are contradicting opinions on the different strengths and weaknesses of matrix organizations. Research suggests that different authors can see the same characteristic of a matrix organization both as a strength and a weakness [11]. However, the main advantages associated with the matrix organizational structure include efficiency, both in terms of resource allocation and information flow. Staff can be both sourced to a project and also contribute to other parts of the organization, such as their functional department or other projects. The information flow is more transparent, allowing the organization to share the knowledge and see the progress of each functional team. Matrix organizations are also possessing stronger project characteristics, since the structure allows for better project management practices [12]. Lastly, the project manager has a great responsibility in managing their team which requires them to be trained to work in cross-functional teams. Matrix structure offers the project manager not only large responsibility for the budget and tasks but also the staff that works for the project with them. It is an opportunity to learn more about managing different teams and collaborating across functions. The matrix organizational structure opens an opportunity for the business to have accessible information flow where different functional structures can contribute to moving the organization forward.
Apart from the advantages that matrix organizational structure brings, several disadvantages are identified. Because matrix organizations involve a lot of planning around administrative changes and staff resource allocation for different projects, the main disadvantage is the high administrative costs. However, Middleton argues that if the matrix organization is mature, the additional overhead costs even out due to an increase in efficiency [13]. Another disadvantage of matrix organization is connected to the conflicts that can potentially arise in such a setup. Because matrix organizations involve a line and a project reporting manager, it can potentially cause a conflict if the expectations and procedures for conflict management are not clearly defined [12]. This essentially means that staff must understand how the managers work together as well as how the reporting must be executed. If there are no clear guidelines and objectives in how conflicts are mitigated, the organization can face difficulties managing the employees and their progress. Lastly, the members of matrix organizations can also work on several projects at the same time, causing a disadvantage in understanding who the employee must report to on the prior basis – their project manager or the functional manager the person belongs to. This means that during employee’s utilization for several projects, an employee spends fewer resources per one project, at the same time being excessively utilized in several projects at the same time.
[edit] Conclusion
Matrix organizations are complex and a need for a clear structure of making them work in practice is apparent. The matrix organizations are utilized the best in complex and uncertain environments, where resource allocation is required for different projects. There are many advantages associated with matrix structures, such as improved efficiency, better information flows across functions in the organization as well as clear project-oriented goal alignment. Some of the disadvantages include complexity in reporting to several managers, potential conflicts that might arise due to several managers being involved in the structure, as well as higher administrative costs for the organization. Several reports suggest that a need for further research of redesigning the matrix organization for modern organizations is required [12], [11], [4]. Great control over conflict management, resource allocation, and clear objectives with the help of project management tools makes matrix organizations successful and thriving in the modern world.
[edit] Annotated bibliography
- Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Fifth Edition ed., Pennsylvania: Project Management Institute, Inc., 2013.
The book describes important tools and concepts related to project management. Matrix organizational structure in this book is described as well as compared to other organizational structures. A good visual overview of the organizational types is shown, allowing the reader to understand the concept better. The book is widely used by project managers and researchers and is also relevant for the author.
- Goś, K. (2015). The Key Advantages and Disadvantages of Matrix Organizational Structures. Studia i Materiały Wydziału Zarządzania UW, 2015(2), 66–83.
The article is a comprehensive study on the matrix organizational structures, different research contributions to the topic, and how researchers perceive matrix organization characteristics (as an advantage, disadvantage, or both). The article analyzes the available literature on matrix organizations and draws a conclusion that there is very little up-to-date knowledge on how to keep matrix organizations successful. There are further steps described on how to keep the modern matrix organizations functioning.
- Cristóbal, J. S., Fernández, V., & Diaz, E. (2018). An analysis of the main project organizational structures: Advantages, disadvantages, and factors affecting their selection. Procedia Computer Science, 138, 791–798.
This state-of-the-art article provides a lot of information on the factors that shape the organizational structure, a comparison between the organizational structures in-depth, as well as advantages and disadvantages of each of the organizational structures. The article also engages project managers to think about organizational structures more rationally and suggests future research topics for complexity measurement in organizations.
[edit] References
- ↑ Cambridge Dictionary. (n.d.). Citation. In Cambridge English Dictionary. Retrieved February 11, 2022 from https://dictionary.cambridge.org/dictionary/english/organization.
- ↑ 2.0 2.1 2.2 2.3 Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Fifth Edition ed., Pennsylvania: Project Management Institute, Inc., 2013.
- ↑ Moodley, D., Sutherland, M., & Pretorius, P. (2016). Comparing the power and influence of functional managers with that of project managers in matrix organisations: The challenge in duality of command. South African Journal of Economic and Management Sciences, 19(1), 103–117. https://doi.org/10.4102/sajems.v19i1.1308
- ↑ 4.0 4.1 Kuprenas, John A. Implementation and performance of a matrix organization structure. International Journal of Project Management 21 (2003), p.51-62
- ↑ Burton, R. M., Obel, B., & Håkonsson, D. D. (2015). How to get the Matrix Organization to Work. Journal of Organization Design, 4(3), 37. https://doi.org/10.7146/jod.22549
- ↑ Slack, N., Brandon-Jones, A., & Johnston, R. (2016). Operations Management (8th ed.). Pearson Canada.
- ↑ Meyer, P. (2022, January). Apple Inc.’s Organizational Structure & Its Characteristics (An Analysis). Panmore Institute. http://panmore.com/apple-inc-organizational-structure-features-pros-cons#:~:text=Apple%20Inc.%20has%20a%20hierarchical,as%20for%20iOS%20and%20macOS.
- ↑ Cuofano, G. (2021, March 29). Starbucks Organizational Structure In A Nutshell. FourWeekMBA. https://fourweekmba.com/starbucks-organizational-structure/#:%7E:text=Starbucks%20follows%20a%20matrix%20organizational,chains%20of%20command%20and%20divisions.
- ↑ Johnson McPhail, C. (2016). From Tall to Matrix: Redefining Organizational Structures. Change: The Magazine of Higher Learning, 48(4), 55–62. https://doi.org/10.1080/00091383.2016.1198189
- ↑ Lawrence, P. R., Kolodny, H. F., & Davis, S. M. (1977). The human side of the matrix. Organizational Dynamics, 6(1), 43–61. https://doi.org/10.1016/0090-2616(77)90034-1
- ↑ 11.0 11.1 Goś, K. (2015). The Key Advantages and Disadvantages of Matrix Organizational Structures. Studia i Materiały Wydziału Zarządzania UW, 2015(2), 66–83. https://doi.org/10.7172/1733-9758.2015.19.5
- ↑ 12.0 12.1 12.2 Cristóbal, J. S., Fernández, V., & Diaz, E. (2018). An analysis of the main project organizational structures: Advantages, disadvantages, and factors affecting their selection. Procedia Computer Science, 138, 791–798. https://doi.org/10.1016/j.procs.2018.10.103
- ↑ C.J. Middleton, “How to Set Up a Project Organization,” HBR March–April 1967, p. 73.
