written by | January 24, 2023

Matrix Organisational Structure and Functions: A Brief

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Table of Content


Matrix organisational structures do not follow traditional hierarchical models. In a matrix structure, one shares resources and staff across teams and projects, as well as within departments or functions. The organisational structure is crucial to any business as it decides how operational objectives are established to achieve the overall business goals and the resource allocation strategy in the business.

Did You Know? The matrix organisation combines two or more organisational structures to achieve twin business objectives.

An Overview on Matrix Structure

In simple words, organisational structure plays a major role in simplifying the complex work environment and allows a seamless flow of work among various departments without many bottlenecks. 

This organisational structure employs the chains of commands in business to enable smooth workflow and informed-decision making processes. Unlike the simple structure, which involves only a single authority, the matrix organisational structure involves dual authorities making it different from other organisational structures.

Types of Matrix Organisation

A matrix organisational structure is important because it can handle multiple projects and complex business processes without raising the need for the realignment of project teams. In other words, matrix organisational design is a flexible design that can facilitate multiple projects simultaneously, which is not rigid. 

Three types of matrix organisation or matrix management can be seen here based on power allocation between the project manager and department head as follows: 

1. Weak Matrix Structure

In the weak matrix, as the name suggests, the project manager has limited or least decision-making power compared to the department head. Here, the particular project turns weak as the decision power regarding the project is with the department head and not with the project manager. A strong communication plan plays a crucial role in the weak matrix for keeping communication alive.  

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2. Balanced Matrix Structure

The project manager and department head possess equal or the same authority, where team members are obliged to report to both authorities. This can be considered the ideal matrix structure where there is a healthy communication network among project team members, the project manager and the department head. The project flows seamlessly without many bottlenecks in the balanced matrix. 

3. Strong Matrix Structure

 

The key decision-making power is with the project manager in the strong matrix. This leads to a strong organisational structure where the project manager takes all the key decisions regarding the project budget and timeline. The Department head oversees the project in the strong matrix. However, no key decision-making power is with the department head in the strong matrix organisation

How Does Matrix Organisational Structure Work? 

Matrix organisational structure mainly enables cross-team collaboration and shared resource allocation among projects. Simply put, a matrix organisational structure enables the synergy benefit to the business by handling multiple projects simultaneously. 

The comprehensive working of matrix organisation involves 

  • Dual lines of authority, i.e., project manager and department head
  • Dual lines of commands 
  • Dual sources of reward 
  • Shared authority between project lead and department lead 
  • Dual reporting channels
  • A major need for an effective and extensive communication system 

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Example of Matrix Organisational Structure

Let’s take the example of two main departments in major businesses as finance and marketing. 

Now the department head for the finance department is a general authority. Two teams in the finance department – finance team 1 and finance team 2 are led by project manager 1 and project manager 2. 

In the matrix organisational structure, project team members of team 1 should report to both project manager 1 and the general department head. Likewise, the project team members of team 2 should report to projecting manager 2 and the general department head. 

The same vertical and horizontal lines of authority can also be seen in the marketing department. The whole picture of a matrix organisation includes the IT, Finance, HR, marketing, etc, led by the common project manager or team lead and by respective departmental heads. 

Irrespective of the lines of authority in any organisational structure, reporting requirements in all structures lead to the top authority – the CEO. 

Benefits and Limitations of the Matrix Organisational Structure 

There are also some limitations of matrix management which businesses should be aware of. Not every business needs the matrix organisation, which highlights that matrix structure is not a universal concept, so it does not fit all businesses. Before implementing the matrix strategy, various factors are considered, such as business type, industry, size, business projects, business processes, overall objectives and more. 

Advantages of the Matrix Organisational Structure 

Matrix organisation combines one or more organisational structures to obtain the best of both structures that balance the project-driven companies. Matrix organisational structure combines the stability of functional structure with the flexibility of the product form. 

  • Team Retention

 As the strong team is formed under a matrix organisational structure with specialists from various departments, this team is likely to grow strong long-term and collaborate on further projects in the future. 

  •  Flexible and Dynamic: 

The matrix organisation is always flexible as this matrix structure can facilitate multiple products or projects, thereby simplifying the complex processes within the business.

  •  Effective Resource Allocation: 

As the specialists from different departments gather as a team, the project is advanced faster, combining the expertise of various backgrounds. This also reduces the overhead costs and turnaround time, making the deliverable fast and seamless. 

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Disadvantages of the Matrix Organisational Structure 

  •  Complex and Conflict Structure:

Though matrix organisational structure intends to enable flexibility among multiple projects, it may at the same time cause unwanted complexity. However, using a reactive and effective project management system might cut down the potential complexities of the project. Also, conflicts arise when the project manager and departmental head are not on the same page, which may hinder teamwork. 

  • Poor Accountability: 

Where dual reporting authorities exist in the matrix organisation, it becomes quite difficult to place accountability fair and square to only one authority or department. 

  •  Passive Response Time: 

As the information should be communicated to the dual lines of authority, it may consume a lot of time for the decision-making process making the deliverables slow and sluggish. However, with the robust communication system in place, slow response time and other bottlenecks can be easily cut down to achieve faster progress in the project. 

Conclusion 

Matrix organisational structure is most suitable for project-driven companies or businesses having multiple projects and complex business processes. There are various advantages of a matrix organisational structure, but businesses must also consider limitations to achieve the best out of a matrix organisational structure. The matrix organisation can easily rule out these limitations with an effective project management system. 

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FAQs

Q: State some of the advantages of matrix organisational structure

Ans:

  1. Effective resource allocation 
  2. Cross-team collaboration 
  3. Cross-functional communication 
  4. Flexible and dynamic 
  5. Quick realisation of project objectives

Q: What are the types of matrix organisations?

Ans:

Weak matrix structure, Balanced matrix structure and Strong matrix organisation are the matrix organisation types seen in major business types.

Q: How does the matrix organisation work?

Ans:

Matrix organisation involves both the vertical and horizontal lines of authority, making it one of the most complex organisational structures.

Q: What is matrix organisational structure?

Ans:

It combines one or more organisational structures widely used in project-driven companies and complex business processes.

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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.