Matrix Organisation

Introduction

A project organization can be structured in primarily three different ways. The project organization can either be structured as functional or project orientated or as a matrix organization. A functional orientated organization is when the managers primarily are specialists and analytical oriented within their field of specialty. Also, the manager is a technical supervisor. A project oriented organization is more generalist in their management. They are often a facilitator with a general experience in managing diverse projects.

The advantage of a functional project organization is the enhancement of the technological development by allowing the different involved employees to focus on their field of expertise, which also enables pooling of resources among different projects. These technical capabilities are important for a company to continuously improve their development of products. However, a consequence of this type of organization is the difficulty in coordinating these specialized resources among different projects. This can cause a late delivery of the project or an increase in the costs because additional technical personnel must be procured.

The strength and weakness of the functional orientated organization is the opposite of the project orientated organization. When the organization is project focused, it allocates the resources needed to complete the project and thereby ensuring a successfully delivered project. The consequences of this are the technical development is limited to the project, which causes the technical development to fall behind, because the focus is on the individual projects.

Thus, the purpose of the matrix organization is to use enhance their different strengths and reduce their weakness by both having a functional and a project manager.

Matrix Organization

The background of the matrix organization is it was developed in the aerospace industry in the 60’s. The need occurred because the industry faced extremely complex projects which both the technical performance and the coordination was very important. This was not possible to achieve with the functional or the project management structure. This was how the matrix organization was created. The matrix organization works by splitting the skills throughout the organization. The organization is designed so the people working on the project are both referring to the project manager and their functional manager. This causes a “two-boss structure” which means that the people who are working on the project has two direct reporting relationships. The consequence of this structure will be discussed later in the article. Underneath an illustration of the matrix organization is illustrated based on figure 2 from Stuckenbruck, 1979.

INDSÆT FIGUR!

The figure illustrates how the project personnel have two mangers and what their managers competencies are in relation to the project they are working on. The matrix organization is a complex project organization due to the multiple managers. This may seem like an needles expense to have these additional managers for companies who are already using one of the two other project organizations. Indeed, it is an added expense initially but when the matrix organization is implemented it often results in better productivity with respect to the project delivery. (Kuprenas, 2001) The added complexity in the organization means it is not necessarily applicable to all different kinds of companies. Because of the “two-boss structure” there must be a clear definition of the different responsibilities for each manager also how and what the employees refer to regarding the deliveries. Thus, the top management has to be involved and motivated to make the matrix organization work. Also, both the project and functional manager has to be involved and engaged. The importance of the different management engagement is necessary because of how the organization is structured. When adopting the matrix, it is easier to design the management around multiple tasks and still ensure a high sharing of information among the technical department and handle complex tasks. (Stuckenbruck, 1979)

Advantages

There are no best practice matrix organization structures which fits all companies. How the organizations structural needs are, are different for each company which means that a matrix will not automatically work. But there are some general advantages in integrating a matrix organization in the company. (Ford and Randolph, 1992) Some of the advantages of the matrix organization is the efficient use of resources. Because of the vertical direction between the project management, it is possible to share the different competencies among different projects. If some resources are limited, it is also easier to determine the priorities between projects thus the matrix organization limits the costs. Not only is it easy to share the resources among different projects but it also results in a less restricted information flow among projects. Because of the vertical and horizontal information flow it enables to limit the information to each manager to be the most necessary for each manager. E.g., the functional manager can focus on the technicalities of the project whereas the project manager can focus on the milestones or time schedule. When having these focused groups of project personnel and specified information flow, it enhances the technological development because the experts are kept together. When a project is ended or terminated the expert groups can start working on another project together. Thus, the different information and know-how gathered in other projects is not lost and an increased productivity and innovation is achieved. (Stuckenbruck, 1979)

When doing projects often there has to be involved some kind of risk management and also the managers have to be able to react to uncertainties quick. Especially in large scale projects where there is a high complexity which can cause severe delays. As defined earlier the lateral communication allows information sharing between technical departments and increased productivity but another advantage is the ability to react quick to an uncertainty. The increased contact among the different departments makes the different departments interact more often which means a faster decision making is possible and thereby making the organization more robust in means of uncertainties and risks. (Ford and Randolph, 1992) In relation to each individual employee and their job satisfaction it is argued that the motivation and commitment increases due to their higher influence in each project and their opportunity to work on different projects with the same team. In a study by 40 engineering managers was asked to do a survey on what implications it had for them to work in a matrix organization. The survey reported that “The matrix is more motivating and satisfying than traditional structures by allowing more creativity, fostering a direct relationship with clients, improving teamwork, improving decision making, and increasing communication and responsibilities.” (Ford and Randolph, 1992) So, in general a matrix organization has a positive influence on the employees and has a positive impact on their encouragement, creates a more innovative team which benefits the company long term also.

Even though there are a lot of positive effects by implementing the matrix organization, some of the effects is also a difficult to achieve and can only be achieved if the matrix is implemented correct and thoughtful. Some reported problems and weakness are strongly related to the “two-boss structure”. The “two-boss structure” will be described and discussed underneath and also the consequences of having to boss’.

Matrix forms and "two-boss structure"

As it can be seen in FIGURE?? and earlier described the project personnel has two managers whom each has their different responsibilities. As described earlier in the article the organization can either have project or functional orientation. But when a matrix organization is used it is possible to have a balance between these two orientations. This is due to the “two-boss structure” where the project manager and functional manager has each focus of the project. The balance in between which focus is then determined by the top management. This means that three different matrix structures are possible which are listed underneath: (Kuprenas, 2001) • Functional matrix • Balanced matrix • Project matrix The difference between the organizations is who of the managers has the most authority for the project personnel. A functional matrix is a matrix where the functional manager has the most authority and has the primary responsibly for the project deliveries. The project managers will primarily focus on the coordination and planning of the project. A balanced matrix is where the functional and project manager share the responsibility for the project and its deliveries. A project matrix is when the project manager has the highest power and the responsibility to complete the project. The functional manager will primarily focus on allocating resources for the project. (Kuprenas, 2001) It is apparent that these responsibilities and the authority for the project manager and functional manager can overlap each other. This can cause problems between the managers but also how the project personnel. Among the project and functional managers, their different responsibilities must be stated clearly to each other. It should set the framework for who is responsible for different tasks in the project. Both managers must change their way of thinking to make the matrix work. The functional manager must focus on the operational thinking and technicalities in the project whereas the project manager most contain its focus on their ability to negotiate and motivate to ensure the schedule is complied with. As this changes the traditional way of managing project which is why the top management must support and trust the functional and project managers in the implementation of the matrix organization. (Egelhoff and Wolf, 2012)

Biblography

Stuckenbruck, L. C. (1979). The Matrix Organization. Project Management Quarterly, 10(3), 21–33.

Steven C. Dunn (2001) Motivation by Project and Functional Managers in Matrix Organizations, Engineering Management Journal, 13:2, 3-10, DOI: 10.1080/10429247.2001.11415110

Irja Hyväri (2006). Project management effectiveness in project-oriented business organizations, International Journal of Project Management, 216-225

W. G. Egelhoff and J. Wolf, Understanding Matrix Structures and Their Alternatives, London: Springer Nature, 2017

Jay R. Galbraith, Matrix organization designs How to combine functional and project forms, Business Horizons, Volume 14, Issue 1, 1971, Pages 29-40, ISSN 0007-6813

Ford RC, Randolph WA. Cross-Functional Structures: A Review and Integration of Matrix Organization and Project Management. Journal of Management. 1992;18(2):267-294. doi:10.1177/014920639201800204

Future work.

• Analyze the functional and project managers influence on the personnel’s job satisfaction.

• Discuss other the consequences for the “two-boss structure” for the project personnel.

• Discuss other disadvantages for the matrix organization.

• How is the matrix organization implemented in an organization?

• How is it used today?

• Evaluate when it is applicable and what pitfalls should be avoided.

I am thinking of putting in the advantages and disadvantages in bullet points to have a clear overview of these and still explain them. What are your thoughts?