Matrix organisation: meaning, where it suits, merits and demerits

What a matrix organisation is

A matrix organisation, also called a grid organisation, lays a project structure on top of the permanent functional structure of an enterprise. The functional departments stay in place and keep authority over the running of their units; they form the vertical lines of command. Project teams, set up when a particular project needs a high degree of technical skill for a limited period, form the horizontal lines. Where the two cross, a grid is formed.

Its working features follow from this design:

• It is built around a specific project, and the project manager has authority to finish it within the time and cost limits set by top management.
• Its staff are drawn from the functional departments and go back to them for reassignment when the project ends.
• The two kinds of manager play different roles: the project manager takes a general management view of the project, while each functional manager protects the standards of his own function.
• Each member of a project team therefore has two bosses, the functional head and the project head, and the extent of each one's authority has to be marked out clearly.

It is not the same as a pure project organisation. There the project manager has full authority over the project's resources; in a matrix he shares them with the functional managers.

Organisations for which it is suitable

The matrix form was developed for large and complex undertakings that need a structure more flexible and more technically oriented than the line and staff or functional forms. It suits an organisation that:

• runs several projects at the same time, rather than one or two very large ones;
• needs specialists from different disciplines to work together on each project for a limited period, while their functional departments continue the regular work.

A Pune automobile-components maker developing an electric-vehicle motor is an example. Design, production, purchase and finance staff join one project team under a project manager for the development period, and still report to their own department heads.

Merits

1. Flexibility. More projects can be taken up simply by forming more project teams, as the environment and the organisation's needs demand.
2. Development of skills. People learn new skills by working on many projects, so the matrix serves as a training ground for a range of professional abilities.
3. Attention to each project. Each project gets its own attention and resources, which makes planning and control easier and helps it finish on time.
4. Motivation, communication and coordination. Team members are motivated because they work directly towards one project's completion; direct contact improves communication across ranks; and the project manager integrates people from different disciplines, which reduces coordination problems.

Demerits

1. Conflict within the team. Members come temporarily from different departments and may clash, and the project manager has no line authority over them, so coordination and control suffer.
2. Dual command. Its most serious weakness: a team member is never sure whose order, the functional head's or the project head's, to obey first, so unity of command is broken.
3. No clear hierarchy. Project and functional managers do not stand in a scalar relationship, so working relationships are unclear.
4. Higher cost and paper work. Communication flows both vertically and horizontally all the time; paper work grows, and conflicting instructions make projects slower and costlier.
5. Difficult appraisal. When staff move from project to project, functional heads find it hard to judge their performance, and some staff find it hard to adjust to each new project.
6. Complex relationships. Informal relationships operate alongside the formal ones and make coordination harder.

Conclusion

The matrix organisation trades the simplicity of a single line of command for flexibility and expertise. It suits large, technically demanding enterprises that run several projects at once, provided the authority of the functional and the project heads is clearly divided.