A matrix organisational structure doesn’t follow the traditional, hierarchical model. In the matrix structure, you share resources and staff across teams and projects, as well as within departments or functions.
A matrix structure is a combination of two or more types of organisational structures. It is a way of arranging your business so that you set up reporting relationships as a grid, or a matrix, rather than in the traditional hierarchy.
In this structure, employees usually have dual reporting relationships – generally to their functional manager as well as the project manager. Typically, one reporting line will take priority over the other (eg staff may have to report to their functional manager before reporting to the project manager).
Different forms of matrix structure exist. These fall under three main categories, depending on the level of power of the project manager:
In large organisations, it is possible to involve all these types of matrix structure at different levels within a business. This is sometimes referred to as a ‘composite organisation’.
The main advantage of the matrix structure is that it can:
The matrix structure can also help businesses achieve quick market adaptation to changing customer needs, as it can decrease the lead time to produce a new product. This structure is most suitable for businesses operating in a dynamic environment.
A matrix structure may not be well suited for businesses working in a more settled environment, with set customer requirements. Because of its complexity, and the need for employees to report to two bosses, it can lead to:
A matrix organisational structure often exists alongside a traditional functional structure. It is common in large and multi-project organisations that relocate employees when and where they need them. For smaller businesses with limited resources, organisational structure by function may be more suited.
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