Explain matrix organization structure with two advantages.

  Matrix Structure: An organizational structure that facilitates the horizontal flow of skills and information is known as matrix organization. It is used mainly in the management of large projects or product development processes, drawing employees from different functional disciplines for assignment to a team without removing them from their respective positions. This means matrix organization is formed with the people from different skills and expertise from different departments.

Features of Matrix Organization

The peculiarities or characteristics or features of a matrix organization are described as below: Hybrid structure: Matrix organization is a hybrid structure; a combination of two or more organization structures. It combines functional organization with a project organization. Therefore, it has the merits and demerits of both of these organization structures.

•  Functional manager: The Functional Manager has authority over the technical (functional) aspects of the project. The responsibilities of functional manager are; to do the work, to distribute the project work among his subordinates, and to look after the operational aspects.

• Project manager: The Project manager has authority over the administrative aspects of the project. He has full authority over the financial and physical resources which he can use for completing the project. Responsibilities of project manager are- to decide what to do, for scheduling the project work, to coordinate the activities of the different functional members, to evaluate the project performance.

• Problem of unity of command: In a matrix organization, there is a problem of unity of command. This is so, because the subordinates receive orders from two bosses viz., the Project Manager and the Functional Manager. This will result in confusion, disorder, indiscipline, inefficiency, etc. All this will reduce the productivity and profitability of the project.

• Specialization: In a matrix organization, there is a specialization. The project manager concentrates on the administrative aspects of the project while the functional manager concentrates on the technical aspects of the project. Suitability: Matrix organization is suitable for multi-project organizations. It is mainly used by large construction companies that construct huge residential and commercial projects in different places at the same time. Each project is handled by a project manager. He is supported by many functional managers and employees of the company.

 Advantages of matrix organization

Benefits or merits or advantages of a matrix organization are discussed below: Sound decisions: In a matrix organization, all decisions are made by functional experts. Therefore, the decisions made by them will be sound.

•  Development of skills: It helps the employees to widen their skills. Marketing people can leam about finance, Finance people can learn about marketing, etc. This means employees from one background should perform different functions of other areas as well. This makes them functional experts in different areas.

•  Concentrate on strategic planning: The top managers can spend more time on strategic planning. They can delegate all the routine, repetitive and less important work to the project managers. This helps develop the organization in the long run. Responds to changes in environment: Matrix oorganization responds to the any changes in the environment. Since it takes prompt and wise decisions, so organization can easily adapt in the changing environment. 

•  Specialization: In a matrix organization, there is a special facility of functional specialization. The functional managers concentrate on the technical matters while the project manager concentrates on the administrative matters of the project.

•  Optimum utilization of resources: In a matrix organization, many projects are run at the same time. Therefore, it makes optimum use of the human and physical resources. There is no wastage of resources in a matrix organization.

•  Motivation: In a matrix organization, the employees work as a member of team. So, they are motivated to perform better. This leads the organization to improve the efficiency.

• Higher efficiency: The matrix organization results in a higher efficiency. This helps to reduce the cost of production which results in high returns at lower costs.

Limitations of matrix organization 

The demerits or disadvantages/ limitations of a matrix organization are described below:

•  Increase in work load: In a matrix organization, work load is very high in comparison to any other organization structure. The managers and employees not only have to do their regular work, but also have to manage other additional works like attending numerous meetings, coordinating project work, dividing departmental resources etc.

•  High operational cost: In a matrix organization, it involves a lot of paperwork, reports, meetings, etc. So, in matrix organization, the operational cost is very high.

• Absence of unity of command: In a matrix organization, each subordinate has to work under two bosses, viz., Functional Manager and Project Manager. So, there is no unity of command. Difficulty of balance: In a matrix organization, it is not easy to balance the administrative and technical matters. It is also difficult to balance the authority and responsibilities of the project manager and functional manager.

• Power struggle: In a matrix organization, there may be power struggle between the project manager and the functional manager. Each one looks after his own interest which causes conflicts. Morale: In a matrix organization, the morale of the employees is very low. This is because they work on different projects at different times.

• Complexity: Matrix organization is very complex and the most difficult type of organization.

• Shifting of responsibility: If the project fails, the project manager may shift the responsibility on the functional manager. He will blame the functional manager for the failure.