Matrix organizations

Created by Martin Sorensen

Abstract

A matrix organisation utilises matrix management as its primary organisational structure. Within such an organisation, employees have dual reporting relationships and thus report along two central chains of command: one of functional value and another representing a project, product or client. Typically, an employee is associated with a functional manager and a specific project manager. While the functional manager is responsible for the expertise and technical skills of the employees, the project manager is responsible for delivering targeted project outcomes by utilisation of those skills. In this manner, the titular matrix is comprised by the various intersections along the two chains of command.

Due to the dual reporting relationship of each employee, the exact organisational form varies depending on the balance of power between the two managers. This balance is described from the perspective of the project manager, and can be either weak, balanced or strong, depending on the amount of authority they hold over the project.

The structure of a matrix organisation is intended to address the requirements for companies that operate in dynamic and complex environments. It provides an inherent flexibility by allowing projects to utilise the expertise of all available functional areas within the organisation. This enables the company to produce rapid results without the need to realign between each project.

Whilst there are many benefits to matrix organisations, their structural complexity may lead to confusion or internal conflict—especially in the cases where the managerial balance has not been clearly defined.