Why organisations adopt the matrix design despite its difficulties

What a matrix organisation is

A matrix organisation places a project structure on top of the permanent functional structure, so that members of a project team answer to two lines of command and the structure forms a grid. Functional departments, which keep authority over their own operations, make up the vertical lines; project teams, set up for a limited period whenever a project needs high technical skill, make up the horizontal ones. People are drawn from functional departments into a project and return for reassignment when it ends. Unlike a pure project organisation, in which each project manager controls his own resources, the matrix project manager shares resources with the functional managers.

Why it is complex and hard to run

The statement in the question is accurate. The design breaks several rules on which simpler structures rest.

• Two bosses for one person. A team member reports to both the functional head and the project head, which breaks the principle of unity of command, and is often unsure whose order to follow first.
• No clear hierarchy. Project and functional managers stand side by side rather than in a scalar relationship, so working relations are blurred and power struggles can arise.
• Hard-to-manage teams. Members come temporarily from different departments and the project manager lacks line authority over them, which leads to conflict and problems of coordination and control.
• Costly communication. Messages run both across and up and down, adding paperwork; conflicting instructions from two sides can make projects slower and dearer.
• Tangled relationships and weak appraisal. Informal ties operate alongside formal ones, making relationships more complex, and functional heads find it hard to appraise staff spread across many projects.

Why organisations still adopt it

The matrix exists because the simpler alternatives fail large, complex, project-driven firms in more costly ways.

1. The traditional structures fall short. A functional structure tends to put departmental goals ahead of the enterprise's, makes coordination across departments difficult and can become inflexible. A divisional structure solves coordination but duplicates resources in every division, which is costly. A separate project organisation suffers from duplicated effort and leaves staff fearful of losing their jobs when the project ends. The matrix was designed precisely as an answer to growing size and complexity, where a more flexible, technically oriented structure is needed.
2. Experts from many fields on one task. Developing a product can need engineers of several disciplines to work alongside accountants and other professionals; the matrix brings them together without breaking up their departments, and the project manager acts as the integrator of their disciplines.
3. Resources shared, not duplicated. Specialists and facilities are shared between projects and functions instead of being reserved for one project.
4. Flexibility. New projects can be taken on simply by forming more teams as circumstances require; the design suits a firm running many projects at once.
5. Better motivation and communication. Staff can see the project they are completing, and direct contact cuts the barriers of formal rank.
6. A school for versatile staff. Moving through many projects teaches people new skills, so the matrix doubles as a training ground.
7. Sharper focus on each project. Each project gets its own attention and resources, which improves planning and control and helps it finish on time.

In short, organisations accept the matrix's complexity as the price of combining functional depth with project speed, a combination no simpler structure gives them. Any structure should in any case be reviewed from time to time, since firms that fail to adapt to a changing environment do not survive.

Making the matrix work

The difficulties can be contained. The nature and extent of each boss's authority should be clearly marked off, so that supervisors and subordinates can work smoothly. The project manager should receive authority to finish the project within its time and cost limits under top management's direction, while the functional manager keeps responsibility for the standards of his function. Each side thus has its part: the project head answers for delivery, the functional head for professional quality.

Applying this to the case of a two-wheeler maker

Picture a two-wheeler company in Hosur that must develop an electric scooter, a new export model and a cheaper commuter bike in the same year. Under a purely functional structure, design, purchase, production and finance would each push their own priorities and no one would own any single launch. Separate divisions for each model would mean three design studios and three testing tracks. Instead, the firm names a project head for each model and borrows designers, battery engineers, buyers and cost accountants from their departments. A battery specialist may work for two project heads while remaining under the head of engineering. The firm accepts the friction this causes because it gets three launches with one set of specialists, and it reduces the friction by writing down who decides what: the project head sets deadlines, the engineering head sets technical standards.

Conclusion

The matrix is complex because it deliberately gives up unity of command and a clean hierarchy. Organisations still use it because large, multi-project work needs specialists from many functions to work together quickly without duplicating resources, and neither functional, divisional nor project structures do that as well. With authority clearly divided, its benefits outweigh its strains.