A matrix organizational structure is a hybrid framework in which team members are supervised by multiple team leaders across different departments. It combines two management approaches: one that groups people by their function (like marketing or engineering) and another based on projects they’re working on.

Matrix organizations leverage this dual-pathway approach to share resources across projects while maintaining functional departmental expertise needed for complex projects needing a variety of skills. 

How Does the Matrix Management Process Work?

In a matrix organizational system, two or more structures are combined to create a system that works best for a team.

Let’s look at an example in the context of a generic project. Using the matrix org system, the ‘chain of command’ could be structured as follows: an executive sits at the top in charge of both the traditional and functional project managers. At the same time, the project’s team members answer to both the traditional and functional project managers.

In other words, team members have two distinct line managers with different responsibilities. These managers play fluid roles while answering to the executive who is in a fixed managerial role.

This type of org structure is ideal for teams that have multiple projects active at once. Instead of creating lots of separate teams for each project, existing teams can be split up and be assigned their own specific managers who can guide them through a project that runs alongside their existing tasks and responsibilities.

How Is The Matrix Org Structure Different?

Organimi understands that today’s organization is complex and has many moving parts. Matrix org charts help employees make sense of wide-scale projects that need to quickly respond to interdisciplinary needs and rapidly changing teams. Where traditional org structures often lack the flexibility needed to complete projects within tight deadlines, the agile matrix structure could make a huge difference

In a traditional hierarchical structure, everyone in the organization reports upwards, ultimately, to a single boss. In contrast, the matrix org structure is very different. In a matrix organization:

  • Employees are accountable to multiple people.
  • There are two or more chains of command.
  • Managerial roles are dynamic and fluid rather than fixed.
  • There are two kinds of managers: functional and project managers.
  • There is no defined balance of power between functional and project managers.

Matrix Management Benefits

There are several pros to the matrix organizational structure, including:

  • Clearer project objectives.
  • Open and transparent lines of communication.
  • A more collaborative working environment.
  • Functional employees are combined with generalist managers.
  • Employee time is used more efficiently.
  • The structural nature provides stability which increases employee satisfaction.

Matrix Structure Cons

  • The potential for conflicts when deciding which manager to ‘trust’.
  • The matrix structure is more complex and strategic and takes longer to plan.
  • Managers aren’t guaranteed to get along. This can cause disputes.
  • Decisions go through multiple people before being approved.
  • Lots of cooperation required between functional and project managers.
  • Priorities can be difficult to establish.

Types of Matrix Management

Matrix management structures offer organizations a way to navigate complex projects efficiently. Depending on how much authority a project manager yields, there are three types of matrix management structures. 

Strong Matrix Organization

A strong matrix organization focuses on more projects, giving project managers more authority over resources and decision-making than the functional department head. In this setup, team members may report more directly to a project manager than their functional manager.

Here’s an example: A tech company wants to launch a new product. Under a strong matrix structure, the project lead has more control over resources, timelines, and decisions. The department head may supervise the project’s progress, but the project lead makes all the important project-related decisions.

Weak Matrix Organization

In a weak matrix organization, functional heads hold more power over project managers. In this setup, project managers primarily handle coordination and administrative tasks within a project.

Here’s an example: A manufacturing company is planning a project aiming to improve production efficiency. In this scenario, departmental heads lead the charge, making critical decisions and guiding their teams. Project managers support by taking on administrative duties and ensuring smooth communication among team members.

Balanced Matrix Organization

In a balanced matrix organization, project leads and marketing heads share equal authority. This structure encourages dual reporting and collaboration between the two managements.

Here’s an example: A campaign project co-managed by the project manager and functional lead in an advertising agency. The project manager would oversee the project’s progress and coordination, while functional managers would ensure their teams contribute the necessary expertise.

How to Manage a Matrix Organization

Define roles and responsibilities clearly

Define the roles and scopes of responsibility of both project and functional managers. Additionally, make sure all team members know who they report to and who to approach for specific issues. Having a clear distinction of roles and reporting lines prevents confusion and conflicts.

Encourage open and clear communication

There should be open and transparent communication between the project-based and functional teams. To do this, you can have regular meetings where each team provides updates to bridge gaps between different departments and ensure everyone’s on the same page. Communication is key to better collaboration across the project and organization.

Establish mechanisms to resolve conflicts

As team members report to two leaderships, conflicts may arise. Having conflict resolution mechanisms in place can help manage disagreements constructively and effectively. Consider having regular employee training on negotiation, mediation, and communication.

Monitor employee workloads to prevent burnout

Employees reporting to multiple managers may experience heavy workloads, especially when handling multiple projects. To prevent burnout and improve work efficiency, regularly monitor employees’ workloads to ensure their tasks are manageable. If needed, provide support or redistribute tasks as necessary to prevent burnout.

Evaluate and adjust your management strategy

Regularly evaluate your company’s matrix structure to check its effectiveness and make adjustments as necessary. If needed, restructure teams or change processes to meet the organization’s needs better.

Matrix Structure Examples

Strong Matrix Example

A global tech company with teams spread across different continents wants to develop new software. The company opts for a strong matrix setup for efficient resource allocation and fast-paced development despite geographical distances. Under this structure, the project lead has authority over the project, resources, timelines, and key decisions. Meanwhile, the functional managers provide specialized resources.

Weak Matrix Example

The university’s research department is planning a multidisciplinary research project. To leverage the department heads’ different expertise, a weak matrix structure is more fitting. Department heads maintain control over their faculty and resources, while a project coordinator facilitates communication and handles administrative duties.

Balanced Matrix Example

Construction companies usually manage multiple projects simultaneously, with each project requiring input from various functional departments like engineering, procurement, and HR. To manage these projects effectively, a balanced matrix is more appropriate, as it allows more flexibility and expertise to coexist. Project managers and department heads get equal authority, facilitating closer collaboration and faster decision-making. 

The Choice is Yours

Whether the matrix or hierarchical org structure is used within your organization is down to you. Which is right depends highly on the nature of your business alongside a multitude of other elements such as size and strength, types of project, your workforce, and so on. In addition to your organization, there are other things to account for such as project management approaches, styles, and methodologies.

If you think your organization may benefit from using the matrix structure, you should analyze your team, available resources, needs and demands, projects, and timelines to determine whether it is the right way to lead your employees.

Whether you opt for the matrix structure or decide that the traditional hierarchical structure is best, Organimi is the only org chart tool you will need to start building your own structures. 

Our industry-leading, cloud-based org chart building tool is trusted by thousands of companies worldwide, including big names like Amazon, who use it to streamline their workflows, plan projects, and build clear and concise hierarchical structures for their employees.

Click here to start your two-week free trial of Organimi.

Frequently Asked Questions

Is a matrix organization good?

It depends on your organization’s needs. A matrix organization can be highly effective for companies operating in complex work environments that require a blend of specialized skills and expertise in projects. It can also provide flexibility and improved coordination and communication across departments. 

What big companies have a matrix organization?

A matrix organization is very common in large companies operating on a global scale. Notable examples are Nike, Coca-Cola, Starbucks, Nestle, Shell Oil, IBM, and much more. 

Is Amazon a matrix organization?

Yes, Amazon is one of the best examples of a matrix organization. It’s a large, global company that needs to remain flexible, innovative, and adaptable to global market changes — and a matrix organization has been instrumental in keeping its operations running smoothly. In addition, Amazon also incorporates other organizational principles to maintain its efficiency and competitive edge.