Why organisations use the matrix design despite its difficulties

The matrix organisation

A matrix organisation combines two structures at once: a permanent functional structure (departments such as engineering, production, finance, personnel) and project teams laid across it. Employees belong to a functional department and are assigned to one or more projects or products, so they report to two managers: the functional manager, who looks after technical standards and careers, and the project or product manager, who directs the work, schedule and budget of the project.

Why the matrix is complex and difficult

1. Two bosses. Unity of command is given up: a tester told by the project manager to finish a client release tonight and by the testing head to run a full regression suite first is caught between them.
2. Contests for power between functional and project heads over people and resources.
3. Unclear lines. Neither manager outranks the other, so who settles what is often worked out case by case.
4. Cost and delay. A decision may need the agreement of two managers, so meetings and reports multiply and a project can take longer and cost more than planned.
5. Hard to appraise. The head who writes a specialist's annual review may have seen little of the work, which was done on someone else's project.

Why so many organisations still use it

1. Shared specialists. Experts in the functional departments are lent to several projects instead of being duplicated in each, so resources are shared.
2. Flexibility. New project teams can be formed as needs arise, so the firm can take on many projects without restructuring.
3. Someone answerable for each project. Each project has a named manager who owns its schedule and budget, so a slipping deadline is noticed and dealt with.
4. Integration. The project manager pulls together people from different disciplines, easing coordination.
5. Wider experience. Staff who move from one project to the next meet new problems and new colleagues, and so develop faster than they would inside one department.
6. Communication and motivation. People from different departments sit in one team and talk directly, and a visible finish line gives them something to work towards.
7. Technical standards kept. The permanent functional departments keep professional standards while projects come and go.

Making the matrix work

Clear rules on the division of authority, shared goals, top-management support, conflict-resolution mechanisms, joint performance appraisal by both managers, training in teamwork and good communication systems.

Example. An IT services firm has departments for software development, testing and infrastructure, and runs dozens of client projects. A tester belongs to the testing department, which maintains quality standards, and works on two client projects under their project managers. If each client project were instead set up as a self-contained team, each would need testers of its own, many of them idle between releases.

Conclusion

The matrix is difficult, but for organisations facing complex, multi-project work in a dynamic environment its benefits, flexibility, shared expertise, coordination and customer focus, outweigh its costs, provided authority is clearly defined and conflicts are well managed.