The matrix organization is described as a multidimensional organizational structure. Most often, matrix-based organizational models are used in corporations and companies that require more structure due to their size. The multi-layered concept, which includes different forms of the matrix, emerged in the 1950s to 1970s. This period, characterized by technological change and increasing internationalization, required companies to have faster contact channels and a more efficient Organization.
Clear management structures, no or flat hierarchies between individual company divisions are among the advantages associated with the matrix organization. In this form of organization, the interfaces of different organizational and business units are mapped by a matrix. The goal of this modern form of organization is to make more efficient use of existing resources. As a result, the flow of information improves and there is faster decision-making authority.
What is a matrix organization?
This form of organization is best described as a multidimensional organizational structure. The special feature of the matrix organization is that the interfaces of organizational and business areas in the company are represented by a matrix. In addition to the formation of organizational areas, the matrix also defines decision-making competencies. These are then transferred to the respective decision-making units. Since the matrix organization is an organizational structure, not a single department drafts decisions, but only jointly.
Although each team reports to several managers, the matrix structure favors open communication. This enables an uncomplicated exchange of information. With the help of the matrix organization, one uses the advantages of one-dimensional organizational forms and combines them with the business and functional areas.
This creates interfaces, each of which is responsible for specific areas in the business and functional fields. In this way, companies achieve synergy effects. The special structure of the matrix organization enables the subject-specific knowledge of individual specialist areas and departments to be used optimally.
As a multidimensional organizational structure, the matrix organization is applicable within a company, but also within an organization. In order to implement the method, one first categorizes the task areas and then breaks them down according to various criteria. Subsequently, the subject areas can be assigned to the respective areas.
Two decision-making units are always responsible for each action and decision. This makes it possible to view a task from different perspectives and to consider several aspects at the same time, so that work is done more efficiently.
The three types of matrix organizations
An organizational model is designed in different forms. A distinction is therefore made between a weak, balanced and strong matrix organization. The main differences between these variants are the degree of autonomy in management decisions in areas such as product and project management. These sub-areas are represented in the horizontal level of the matrix.
A strong matrix organization is characterized by the relatively autonomous decision-making power in the way product and project areas are organized. The influence of product or project managers is usually higher compared to the decision-making power of line managers.
The weak matrix organization is the simplest form of a matrix-based organization. It is often used for the implementation of time-limited projects. Since the responsibility is largely subordinated to the line organization, projects are organized with the help of this form of organization on a subject-related basis.
Balanced matrix organization
Project management takes care of all matters related to the completion of the project. The services are provided by the employees of the respective specialist departments. At the same time, the management of the departments retains the unrestricted right to issue instructions to the employees. In a weak matrix, the influence of line management is higher than the decision-making authority of product or project management.
In a balanced matrix organization, line management and project management have equal rights. Both have access to the available resources and can use them to implement the project. successful to be concluded. The right to issue instructions is exercised by the managers of the respective area of activity.
Matrix organization: crossovers possible
In day-to-day business, a matrix organization is always likely to involve crossovers and overlaps of responsibilities between line management and product and project management.
For this reason, in many companies that have a strong, weak or balanced matrix organization, the professional and disciplinary management of employees are separated. To Avoid misunderstandings and work more efficiently, disciplinary management usually remains with line management, while product or project management takes over the technical employee management.
Features of a matrix organization
The matrix organizational structure is characterized by some special features. In this form of organization, the advantages of other types of organization, such as the functional and divisional organization, are bundled and combined. This creates a new, more flexible organizational structure characterized by flat hierarchies and extensive expert knowledge. As tasks are taken on by the relevant specialists, rapid problem-solving is guaranteed.
You can think of a matrix organization as a coordinate system consisting of an x-axis and a y-axis. On the x-axis are the organizational areas of the company, while the y-axis is for the product areas. However, a division can also be made into functional areas and business units.
The term matrix organization refers to the matrix created by the overlapping of different lines. A special feature of this form of organization is that the matrix creates several units with equal rights. This significantly changes the hierarchy that is common in many companies. In the matrix organization, flat hierarchies dominate, but this type of organization creates an increased need for communication.
The matrix organization characteristics briefly summarized:
- Flat hierarchies
- Short communication channels
- Efficient use of resources
- Relief of the management
- Fast problem solutions by specialists
Matrix organization examples
The matrix organization is an organizational structure frequently used by business enterprises. Here, the various business units and functional areas form a matrix. Companies with matrix organization use either the weak, strong or balanced matrix model.
Since this is a multi-line system, employees receive tasks and instructions from multiple Executives. How the method works in practice can be explained using a matrix organization example. A company develops products or offers services. In the process, different specialists are needed who are involved with their expertise in the individual steps from development to control to sales.
One manager per department
A manager is responsible for each individual department (production, marketing and sales). The same applies to the product-related areas of the company, which are also headed by a manager. The employees of the company are distributed among different teams. Within a department or project team, each employee has two supervisors, namely a department manager from the specialist area and a manager from the product area.
The aim now is to pool resources (expertise) and thus work more efficiently. The project team can therefore also consist of members from different departments. In a matrix organization project, reports are made to the management of the specialist department as well as to the project management. To ensure that this functions smoothly and that no resource overloads occur, communication is particularly important in the matrix organization.
How do matrix organizations work?
Matrix organizations differ from classic organizational forms in that employees report to both a department head and a project manager. In the long term, the operational organization based on a matrix is intended to enable plannable corporate development. The special work structure is intended to facilitate the development of new products and services, as the teams work more efficiently and can be monitored by two control bodies.
Matrix organizations function as multidimensional organizational structures and thus differ significantly from line organizations, which are defined by a hierarchically defined reporting and communication flow. Looking at the matrix organization vs. line organization, it is noticeable that several functions are linked together in the matrix. The line organization, on the other hand, is based on hierarchical principles. Thus, strategic decisions are made exclusively by the company management.
Optimal collaboration through optimal networking
In a company with a matrix organization, hierarchy-independent, cooperative working is possible because project management and specialist departments have equal rights in their decisions. Better networking should lead to optimal cooperation between different departments involved in the same projects or production processes.
The matrix organization simply explained is a multi-line system that may consist of two or more management reporting structures. Generally, members of a team are assigned a manager who has primary decision-making authority. Reporting also works similarly in the matrix organization as it does in traditional organizational forms. Employees in the IT department report to IT management, which in turn reports to the management of that business unit.
The difference between single-line organizations and the matrix organization is the assignment of employees to several managers with authority to issue directives. Since many projects require the cooperation of different departments, the matrix organization relies on the interaction of several instances.
Advantages of the matrix organizational structure
Complex organizational structures such as the matrix organization are intended to facilitate business organization, provide greater efficiency and better collaboration. With the application of a matrix-based organization, a company wants to bundle competencies in order to be able to develop products or offer new services more quickly.
This is also of great importance with regard to increasing global networking and high competitive pressure. The matrix organization is said to be advantageous in this respect. However, similar to other organizational methods, the matrix can also have disadvantages.
You can find the most important matrix organization advantages, but also disadvantages here. The advantages include:
- Clear management structure
- Shorter communication channels
- Better collaboration between managers
- Promotion of teamwork
- Optimal resource availability
- No hierarchies between individual departments and business units
Disadvantages of the matrix organizational structure
The matrix organization is used primarily in corporate groups and large companies. This organizational structure is hardly ever considered for small and medium-sized companies.
Disadvantages of the matrix organizational structure are:
- Lack of transparency in decision-making processes
- Increase in internal conflicts due to unclear regulations
- Higher demand for management personnel (more personnel costs)
- Competitive situations within the team and/or departments
- Increased need for communication
The matrix organization in companies
Corporations, internationally networked companies and large enterprises often use the matrix organization to organize and optimize their operations. The reasons for implementing this organizational method are:
- Ensure competitiveness
- Specialization in several areas
- International orientation of the company
The matrix organization is referred to as an organizational model that is basically suitable for most areas of application. The multidimensional organizational structure is used particularly frequently in companies with mass production as well as in companies that want to remain competitive by specializing in several areas. Matrix-based organizations can also be found in project-heavy industries such as the automotive industry or construction.
Organization and communication are necessary for matrix organization
In order for the organizational model of the matrix organization to be used in the company, good organization and communication are necessary. Implementing a multi-line system that is linked to multiple organizational units increases the responsibility of managers and employees. Team members must report to two places at the same time. This can mean extra work while increasing the risk that important information is inadvertently not communicated.
Managers are often responsible for several lines in a company that uses the matrix organization, and must be able to coordinate and control. In addition, in larger companies and operations with extensive product portfolios, there is largely overlap between different production areas, functional areas and organizational areas. A matrix organization can be useful for strengthening teamwork, improving the exchange of information and content, and optimizing operational processes.
The matrix organization is a modern organizational model in which there are no strict hierarchies. The aim of a matrix organizational structure is to increase efficiency and to make operational processes simpler and clearer. To achieve this, the method combines the advantages of a divisional organization with those of a functional organizational structure.
Although the matrix organization is fundamentally suitable for a wide variety of tasks, this complex form of organization is used primarily by corporations, internationally active companies and large enterprises.