Matrix Organization

A matrix organization is a management structure that incorporates both the features of a functional and a project-based organizational structure. In this structure, subordinates serve both functional managers (according to their field of specialty or department) and project managers (depending on the specific project they are working on). This dual reporting system increases the system's flexibility and helps in better resource utilization and sharing of expertise across different areas and projects. On the other hand, it can also stem power fights, ambiguity about who does what, and potential communication troubles. The matrix structure often becomes the best way for multi-department and cross-functional projects.

Example

A matrix structure company can appear in a vital engineering company working on a significant infrastructure project, such as building a bridge. In this circumstance, the engineers with expertise in structural engineering, civil engineering, and environmental engineering will directly report to the functional managers in their respective departments. At the same time, they would maintain a reporting relationship with the project manager, who supervises the bridge's construction. This dual reporting structure allows engineers to contribute to projects by providing expertise while ensuring they answer to their functional department for overall performance. It provides an enabling environment for smooth collaboration within departments, effective utilization of resources, and expertise sharing, which culminates in the successful execution of the project.