What Is the Matrix Organisation Structure? (With Its Importance)

By Indeed Editorial Team

Published 10 April 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Organisation mainly apply the matrix structure to increase and diversify the spread of employees and resources among different departments. This model can have some advantages for the organisation if used appropriately. Understanding the simple concept of matrix management structure can help you choose the best model to adopt. In this article, we discuss what a matrix reporting structure is, explore the reasons for choosing it and outline its advantages.

Related: Everything You Need to Know About Strategic Management

What is matrix organisation?

A matrix organisation is one where teams report to multiple managers and occasionally there are cross-overs on accountability and responsibility. In this structure, employees come together to fulfil a project and they may be a mix of permanent departmental staff and contractors. The matrix organisation has a multidisciplinary team. The business aims to maximise limited budgets by accessing department research and development processes already in place.

Matrix organisation structure categories

The matrix organisation is not a unique, single structure. The number of projects occurring simultaneously and how many points of connection there are between two or more projects shapes the configuration. For example, one department may address a new product's engineering strength, while another may market the product to architects and engineers. In a matrix management structure, the person an employee reports to reflect one of these matrix organisation structures:

  • A weak structure: There's a manager in charge of the function who oversees the progress of several project areas. This manager is the source of all the decisions in the project and may act as project manager and point of authority in the system.

  • Balanced structure: In this structure, both functional and project managers have equal powers. The primary duty of project managers is to allocate tasks to employees and to control the resources.

  • Strong structure: These organisations grant more authority to the project manager. They equally expect employees to report to the functional managers of their sections in addition to reporting to the project manager.

Related: What Is a Chain of Command? (Definition and Explanation)

Matrix management structure origin

Matrix management structure surfaced because of the surge in large-scale projects in business. This rapid rise in scope required project organisations to fast-track technology applications and handle large amounts of data. Matrix management structure was first applied in the aerospace industry. The model developed complexities in terms of size variations and an array of industry applications. It expanded beyond one discipline. The matrix management structure developed into software where the project manager could access the portfolio to view all the projects they were managing.

Tips for boosting performance in matrix organisation structures

As a manager, you may choose to enforce a matrix management structure. Here are some tips to increase the effectiveness of the structure:

  • ensure all employees know how to contact their primary reporting manager

  • keep communication lines open with the project managers

  • train the stakeholders on how the model works

  • discover and resolve misunderstandings without delay

  • distribute the responsibilities evenly among the managers

How does matrix management structure work?

The matrix structure involves layers of reporting process depending on the size of the organisation. All employees have primary managers who then report to the manager in charge of the department. When there's a project in play, employees report to their primary section managers and then also provide reports to the project manager(s). The project manager is the highest authority in the matrix reporting structure. Organisations often consider the matrix to be a good response to managing complex, large and multiple projects.

Advantages of matrix organisation structure

From information sharing to increased motivation, the matrix management structure has a lot to offer to both employers and employees:

Sharing of skills and resources between different units

Knowledge moves quickly due to open communication channels. The matrix management structure aims to foster excellent and effective communication and remove any traditional communication barriers that have existed. The structure boosts collaboration and teamwork among the members and can serve as a great boon for employees who are looking to widen their experience and skill sets. They can be part of many aspects of various projects, which puts them in an environment that facilitates learning and gives them an opportunity to grow professionally.

Allows retention of disciplinary teams

After they complete the project, teams of experts and specialists are often keen to work together in a matrix organisation because the environment can be very stable. The organisation retains its knowledgeable human resources who are often professionals continually exchanging information and ideas with other experts. Maintaining knowledge of current industry and field developments is vital for a business remaining competitive in a global economy.

Develops the skills of the employees

The structure enables employees to give input on various organisation projects, which encourages self-confidence and a sense of personal ownership of processes and projects. The sharing of information among staff themselves leads to effective and cost-efficient in-house training and a growing capability for employees being able to cover each other's work in an emergency. Along with skill transference, employees can gain a positive understanding of the specific demands of colleague's roles and such understanding can enhance the workplace atmosphere. Improved business and social workplace culture ensures workplace desirability.

Related: How to Develop Your Skill Set to Advance Your Career

There's a clear articulation of project objectives

Since teams are reporting to different leaders, those leaders expect high clarity. To ensure satisfaction at all levels, clear project objectives are key, misunderstandings rapidly addressed and all team members aware of their deliverables and the time-frame for the project. This ensures employees stay organised, making them able to focus and meet task allocation.

Creates rapid, efficient large-scale project structures

Matrix management structures work where many teams are working on different, often large-scale projects. This system ensures enhanced loyalty and efficiency in teams as it ensures a conducive working environment which further strengthens job security. With increased job security, employees work harder on projects, which aids in helping them achieve both personal and team goals.

The matrix management structure motivates employees

Given that employees are active in sharing information and can provide input, this leads to great motivation in ensuring a project completion both well and on time. Experienced personnel can motivate, share knowledge and guide their juniors in delivering project goals. Motivation creates a conducive work environment where employees value each other's contribution to the organisation or team.

Related: How to Motivate Your Employees With 11 Impactful Strategies

Retention of highly skilled teams

The matrix reporting structure keeps members of the team intact even after the completion of the project. When the teams work together on future projects, they can understand each other's work style and encourage creativity to boost innovation. Quality sharing cultivates an excellent organisational culture that leads to high retention. Involved employees become loyal and committed to a company over a longer period of time.

Balancing power in a matrix management structure

The balance of power is the heart of the matrix management structure. Power struggles and confusion may affect the success of every project in the organisation. To resolve professional conflicts related to talk responsibilities, the project manager may oversee the entire project while the functional manager meets the assigned duties in the project. A project manager may also have the ability to plan, delegate and assess success.

The key difference between the project manager and the functional manager lies in the execution of their duties. For instance, the project manager sets the standards of the project while the functional manager implements and supervises those set standards are being met on a day-to-day and weekly basis. Those reporting to the functional manager report achieved individual goals. They may report the same content to the project manager. Project managers assess the success of the entire project and the operational and managerial steps taken to achieve its success.

Questions to ask when assigning responsibilities to the project manager

You may ask the following questions when assigning responsibilities to the project manager:

  • What is to be done?

  • Does the manager have the skills, knowledge and leadership qualities to manage the particular project?

  • Does the manager have an excellent track record of delegating?

  • What is the time frame for the project?

  • What is the budget?

  • How is quality assessed and who sees this data?

Questions to ask when assigning responsibilities to the functional manager

Here are some questions that define some of the key deliverables of a functional manager:

  • How can they scope and accomplish the task?

  • What are the deliverables of the task?

  • To which employees have they assigned the task and why?

  • How well have they have integrated functional input into the project?


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