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What is a matrix organization and how does it work?

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A matrix organization is a company structure where teams report to multiple leaders. The matrix design keeps open communication between teams and can help companies create more innovative products and services. Using this structure prevents teams from needing to realign every time a new project begins.

How can you empower teams to move quickly on complex projects without getting bogged down by stakeholder reviews and approvals? Organizational structure may be the answer. Most work environments have chains of command in place so that everyone has clarity around decision-making authority. 

A matrix organization differs from this classic structure since team members report to both a project manager and a department lead. In the guide below, we’ll discuss what a matrix organization is and how you can use one for complex projects. 

What is a matrix organization?

A matrix organization is a work structure where team members report to multiple leaders. In a matrix organization, team members (whether remote or in-house) report to a project manager as well as their department head. This management structure can help your company create new products and services without realigning teams.

[inline illustration] Matrix reporting structure (infographic)

How do matrix organizations work?

Matrix organizations have two or more management reporting structures. While this may seem confusing at first, team members typically have a primary manager for their department. 

Reporting to a department manager functions similarly to a traditional work structure. For example, team members working in IT report to the IT department head. The IT department head reports to the vice president of their division. Eventually, all reporting relationships lead to the CEO. 

The difference in a matrix structure is that team members also report to project managers. Projects often require work from members of various departments like IT, marketing, and finance, which is why having a separate manager for individual projects makes sense. 

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Types of matrix management

There are three types of matrix management, with each type giving more or less authority to the project manager. You can visualize these management types on a scale with the project manager on one end and the department manager on the other. 

[inline illustration] Types of matrix structures (infographic)

Weak matrix

In a weak matrix, the project manager has the least amount of decision-making power compared to the other matrix management types. When the project manager has limited authority over the project, the matrix becomes weak because the project budget and timeline is in the hands of the department head. Creating a communication plan can keep communication from getting lost in a weak matrix. 

Balanced matrix

In a balanced matrix, the department head and the project manager have equal authority and team members report to both of them. This keeps communication open between everyone in leadership roles and allows the project to move forward smoothly. 

Strong matrix

In a strong matrix, the project manager has most of the decision-making power over the project, while the department head has more limited authority. This creates a strong organizational structure because the project manager has full ownership over the project. The department head can oversee the project but doesn’t make key decisions.

Advantages of the matrix organization structure

[inline illustration] Advantages vs disadvantages of matrix organization (infographic)

The matrix organizational structure is more complex than the hierarchical structure, but it has many advantages. Some advantages of the matrix design include clear project objectives, an efficient use of resources, free-flowing information, and training for project managers. 

Clear project objectives

The matrix organization design can ensure greater clarity on project objectives . When your team reports their progress to both the project manager and the department head, solidifying project goals is critical. When the project manager feels supported by other members of senior management, project organization becomes a priority.

Scenario: Let’s say your team is working on an app development project. Because you’re using a matrix structure, the IT developers report to you as the project manager and the IT department head. The project objective is to create a keyword search app for marketers to use on-the-go. When the IT department head and the project manager communicate a clear project objective to the IT developers, the app gets developed quicker. 

Efficient use of resources

The matrix structure allows for an efficient use of resources because teams include specialists from various departments. This reduces overhead costs and the amount of time needed to complete a project. In a hierarchical structure where every team reports to only one manager, there are fewer managers per team. These teams may require more time to create one project deliverable because they don’t have members with different specialities.

Scenario: The team creating the keyword research app may involve specialists from the IT department, the finance department, and the marketing department. When these team members successfully report to their department heads and their project manager, they increase team productivity , save time, and get the project done more efficiently. 

The matrix team reduces costs because without a combined group of specialists, companies would have to restructure teams and potentially hire new team members every time a new product or service is developed. 

Free-flowing information

Working in a matrix structure creates a free-flow of information between teams because the team reports to multiple leaders. While team members must remember to relay information in a hierarchical system, the matrix makes information flow a requirement. Reporting information to multiple leaders may seem tedious, but with the right project management system in place, it requires little or no extra work from team members. 

Scenario: If the development team on the keyword research app only reported to the project manager, information about a bug fix could get lost. However, relaying information to the IT department head is easy to remember when it’s part of the matrix process. 

Training for project managers

The unique structure of the matrix organization gives project managers a large amount of responsibility. Project managers must lead their team through the project lifecycle. This structure challenges project managers and trains those who want to be cross-functional managers in other departments.

Scenario: During this project, your team encounters some bug fixes and a delay in the project timeline . As the project manager, it’s your responsibility to work with the IT department head to successfully handle all issues. In doing so, you discover a personal interest in IT—and a potential career opportunity in the future. 

Team retention

The matrix organization has a great track record from team member retention because when specialists are placed together, the product team stays strong. These team members work under functional department heads and are then assigned to project managers. Specialists often enjoy working together, and it can improve project performance. 

Scenario: During the keyword research app project, the project team consists of various IT, marketing, and finance specialists because these team members understand the ins and outs of creating an application for phone users. This team of specialists will likely stick together to work on many projects in the future.

Disadvantages of the matrix organization structure

Like the hierarchical reporting structure, the matrix organization also has disadvantages. Most of the disadvantages stem from this structure being complex. While complex designs can have benefits when they work, they also have the potential to cause conflict and make things messy.

Complex reporting style

The complexity of the matrix organization can be a disadvantage because teams may have trouble knowing who to report to and when. While the intention of the matrix is to benefit teams, it may complicate projects and muddy the overall process. 

Solution: The best way to prevent a reporting failure is to ensure every member of the matrix understands who to report to and how to do so. Using an intuitive project management platform that facilitates cross-team work can make the matrix structure less complex. 

Slow response time

The complexity of the matrix can lead to slow response times, which can delay projects. Slow response times come from the need to report information to multiple people. Having more people involved is a good thing, but the downside is that relaying information to more people takes time. 

Solution: Using a project management system will solve the issue of slow response times with the matrix structure. As a central source of truth, Asana can prevent duplicate work and increase visibility among teams and leadership. 

Conflicting guidance

Conflicting guidance occurs if the project manager and department head aren’t on the same page. While the matrix structure is meant to encourage teamwork, it may do the opposite depending on the personalities involved. 

Solution: To prevent conflicting guidance, establish a system that allows managers to interact directly with one another. Team members can avoid feeling like they’re caught in the middle if managers are aligned on project goals and stay on the same page.

Potential friction

The main difference between the matrix and hierarchical structure is that team members report to two managers in a matrix structure. This makes the matrix organization more complex and puts more responsibility on team members. Having two managers can give team members more feedback and guidance, but it can also result in friction.

Solution: To prevent potential friction, it’s essential for the department head and the project manager to communicate. It shouldn’t be the team’s role to choose between managers when conflict occurs. Whether in person or through virtual systems, managers can prevent friction by setting clear project objectives from day one and working together to create a successful product. 

Juggling priorities

It can be difficult for team members to juggle priorities in a matrix structure if managers don’t work together. If the department head believes their tasks are most important and the project manager thinks the same, the team may have trouble determining which manager’s guidance to prioritize. 

Solution: When team members have trouble prioritizing tasks because of miscommunication among managers, it’s up to the managers to discuss the tasks of the team and determine what should be done first. Most issues that have the potential to arise from the matrix structure can be solved with strong collaboration, communication, and clarity across teams. 

Improve the matrix structure with project management tools

Using project management tools is the best way to make the matrix structure work well. With project management, the project manager and the department head can align around project goals, plan work together, and create a clear line of communication. And when these pieces are in place, team members have the clarity they need to work efficiently and achieve your project objectives

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How to Make a Responsibility Assignment Matrix for a Project (Template Included)

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The most important resource you’ll employ to deliver the project is people. They have to fit into the schedule and maintain the project budget. Defining what their roles and responsibilities are when executing tasks and delivering on the project goals is an important part of controlling the project.

How can you coordinate all the people who are involved in a project so they know what they’re doing and don’t block others from doing what they are assigned? Using a responsibility assignment matrix can help. An assignment matrix gives your project a team that gets things done.

What is a Responsibility Assignment Matrix in Project Management?

A responsibility assignment matrix (RAM) is a project management chart used to identify and define the various people and organizations and outline each of their roles in working on tasks or delivering a part of the project.

Project managers use an assignment matrix to clarify what cross-functional teams do within the boundaries of the project and its numerous processes. Sometimes a responsibility assignment matrix is required when responding to a request for proposal (RFP).

The responsibility assignment matrix can also be called a RACI matrix, which stands for responsible, accountable, consulted and informed.

  • Responsible: Notes who is responsible for executing the task, which is then assigned to them.
  • Accountable: Notes who has decision-making authority and how that power is delegated throughout the project team.
  • Consulted: Notes who is able to offer insight into the task, from team members to stakeholders.
  • Informed: Notes who is updated on what in terms of progress and performance, as well as when and how this information is disseminated.

This creates a map of connections between activities and project team members. Depending on the size of the project, there can be several assignment matrices used for various project levels.

Why Create a Responsibility Assignment Matrix?

The assignment matrix identifies what everyone on the team is responsible for, which means not only what their duties are, but how they participate in the project. Some will have defined tasks, others will offer help with work, while there are some who are designated as decision-makers. These groups all have an identity and function within the project to help guide it towards a successful end.

Clear communication leads to more efficient projects. An assignment matrix facilitates better communication between team members and provides transparency by creating a system to make sure everyone is updated and always on the same page. Belaboring communications can bog down a project with too many pointless meetings and confusing interactions in which people try to understand what they’re supposed to be doing. Using the responsibility assignment matrix helps, but having project management software that connects teams in real-time is ideal.

ProjectManager manages project information by allowing teams to attach files directly to tasks, and our unlimited file storage keeps important project documents at your fingertips anywhere, anytime. Commenting on tasks can save time and tagging others in the project team creates a communication process that avoids the pitfalls of redundancies or unnecessary meetings.

Gantt chart screenshot with a team collaboration pop up

When Should a Responsibility Assignment Matrix Be Created?

The responsibility assignment matrix would be created at the start of the project. You’d want to have everyone on the project team aware of where they stand in terms of their involvement before they start executing tasks.

As much as its use is a preventative measure, it can be used prescriptively. If you’re deep into the project and things are not moving as planned, there could be communication gridlock. If team members are not in the loop, or misconstrue what they’re supposed to be doing, using a responsibility assignment matrix might untie up those knots in the communication channel.

If there’s a problem with leadership overruling suggestions on how to advance the project and this is seen as a problem, it’s likely that the roles and responsibilities of the project team need refining. The responsibility assignment matrix defines who has authority to make decisions and using it or revisiting can determine if the right people are in that position.

In fact, any of the definitions might need reexamining at any phase in the project. Perhaps tasks are falling behind schedule. This could be because team members aren’t aware of what tasks they own. Anytime a delay occurs, returning to the assignment matrix is a good first step, even if you went through the process as you should during the planning stage of the project.

How to Create a Responsibility Assignment Matrix

The actual making of a responsibility assignment matrix is not as difficult as getting everyone on board with what their roles and responsibilities are.

Therefore, you want to include your team in the process, get their input and eventually buy-in without spending too much time and energy on the process. Follow these steps to make sure everyone is in agreement and you’ll have a successful responsibility assignment.

  • Identify all the participants involved in the project, from team members to stakeholders and everyone in between.
  • List all deliverables associated with the project. Use a work breakdown structure to make sure you don’t miss any.
  • Meet with team members on how to execute the tasks to create the deliverables. Every task needs to be discussed in terms of the team’s responsibility and authority.
  • Draft the responsibility assignment matrix using a table with the project tasks listed on the left-hand column. Across the top add the name of everyone in the project.
  • Where the tasks meet the project team member, assign whether they’re responsible, accountable, consulted or informed.
  • When completed, share the responsibility assignment matrix with the project team and stakeholders and hold a meeting if necessary to make sure everyone understands their part in the project. If you’re working in a shared space, print out a copy and post it.

Free Responsibility Assignment Matrix Template

Using a RACI template is a shortcut that sets up your team and the project for success. ProjectManager is more than an award-winning software that organizes tasks, teams and projects to streamline work and boost productivity, it’s also the online hub for all things project management.

Among the hundreds of blog posts, guidebooks and tutorial videos are dozens of free templates that can help you through every phase of your project’s life cycle. Using our free RACI template will help you guide all the project teams better, allowing them to know where they stand in relation to the project and what their level of responsibility and accountability is.

Use it at the start of the project to avoid delays and untangle any communicative knots that are preventing the project from progressing as planned. To keep your project on track, download our free RACI template and get a head start on building a workable responsibility assignment matrix.

RACI Matrix Template for Excel

Best Practices

Using our free RACI template is a good start, but you have to make sure you fill it in correctly. A responsibility assignment matrix is only as good as the effort put into creating it. Here are some best practices to apply when you’re in the process of building your assignment matrix.

  • Involve the team: They’re the ones who will be executing the work. You want their input and buy-in to avoid any costly mistakes or time-consuming questions about what wasn’t made clear at the beginning of the project.
  • Identify every single task: Identify all the tasks required to reach your final deliverable. Once you have that thorough list make sure that there is only one person on the team who is accountable.
  • Update your RACI regularly: Make sure that each new one is clearly marked as the most current version and is distributed to everyone on the team. There will be times when you’ll want to revisit the responsibility assignment matrix or changes in personnel will require an edit.
  • Share responsibility viably: One person shouldn’t have to shoulder the bulk of the responsibilities for the project and you want to give authority throughout the project team and not just among the very top management team.
  • Optimize tasks: Managers can use the RACI matrix to see if too many team members have been assigned to a task. Maybe these workers could be spread out for greater productivity. There could be too many people listed as consulted, which slows down the process. The assignment matrix is endlessly useful.

How ProjectManager Helps You Manage Projects Better

ProjectManager is a cloud-based tool that connects everyone in real-time to facilitate planning, monitoring and reporting on the project. It works to give everyone on the project team a job and the knowledge as to where they have authority and when to consult others, as well as defining the reporting process.

Let’s look at the people who are responsible, for example, the team who execute the project. Once invited into the software, you can share the project plan, assign them tasks, add detailed direction, add a deadline and tag for priority and more. The teams can then collaborate by attaching files and images to the tasks and commenting in real-time to work better together.

A screenshot of the Team collaboration user interface in ProjectManager

Those who need to stay informed of the project can do so by also getting invited into the project and sharing plans and schedules with them. Stakeholders can stay updated with reporting features that can generate reports on project variance, cost, time and more with one click. Then share them as a PDF. Reports can even be quickly filtered to zero in on the data stakeholders are interested in.

a screenshot of the status report generation screen in ProjectManager

The responsibility assignment matrix can help you reallocate your resources when things aren’t progressing as planned. Use our software to get further insight. The resource management features include a workload chart that’s color-coded so it’s easy to see who has too many tasks and who can take on more work. Then you can simply reallocate those resources from the workload page to help your team work more productively.

color-coded workload chart

ProjectManager gets you organized, keeps your team focused on their tasks and stakeholders in the loop. Gain efficiencies throughout every aspect of your project’s life cycle with an online Gantt chart to schedule work and kanban boards, a visual workflow feature that provides transparency into production. All that and it’s on a collaborative platform to keep everyone connected. Try ProjectManager today for free.

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4 Matrix Organizational Structure Examples (+ Benefits and Templates)

November 22, 2022

If you’re struggling with managing multiple teams and projects, a matrix organization structure can make all the difference. In layman’s terms, the matrix organizational structure is just a way of relaying information between all team members across multiple departments. 

For instance, members of different teams report to project and functional managers (marketing, finance, production managers, and so on), who then report to the chief executive officer. 

This improves cross-team communication and eliminates the need for team members to align or realign whenever a new project kicks off. 

So if you want to know the following:

  • What a matrix organization structure is
  • The different types of matrix structures
  • Why it’s a better way of running projects
  • How to build your own matrix
  • Some critical examples from prominent companies 

Then you’ll love this in-depth guide. 

Ready to enter the matrix? Let’s get started.

What is a Matrix Organizational Structure?

How does a matrix organizational structure operate and what are the benefits, 1. philips example, 2. starbucks example, 3. engineering and marketing department, 4. advertising agency example.

In the classic, top-down organizational structure, the CEO stands at the very top while the COO (chief operating officer), CFO (chief financial officer), and department managers come next. 

In a horizontal structure, copywriters report to the creative director, who reports to the CMO, who then reports to the CEO. You get the point. Reporting is linear, and everyone from marketing, sales, design, and development, to finance and HR teams follow the same reporting structure.

The traditional top-down structure is less complex than the matrix organizational structure. For one, the matrix organization structure may involve team members reporting to both their department and functional manager and project managers that also report to their department managers.

That’s why the top-down organizational structure is tree-like while the matrix organizational structure has a rectangular shape. 

A matrix organizational structure example in ClickUp Whiteboard

It’s worth mentioning that the matrix organizational structure unites and balances out several types of organizational structures. It brings in project managers a new chain of command besides functional managers, which is why some like to name it the two-boss matrix. 

Working on large-scale projects where a diverse set of talent is included, project managers:

  • Manage talent across departments and create solid and diverse project teams,
  • Maximize the resources that are already at their disposal,
  • Help everyone realize how essential teamwork is, and encourage team members to collaborate, communicate, and deliver on time and within budget. 

Ultimately, this contributes to creating better copy, products, and customer experience. 🤝

Types of matrix organizational structures

Matrix organizational structures can be either weak, balanced, or strong, depending on how the power between project and functional managers is deployed. 

However, don’t be led by the names since a weak matrix is not necessarily worse than the strong one, which differs from project to project, from one company to another, and these roles are rather fluid. 

Project managers have very little authority and decision-making power in a weak matrix. This kind of matrix is named weak because functional managers are in charge of the project budget and timeline, and project managers’ authority is super limited.

In balanced matrix structures, team members report to department and project managers with equal power and authority. The balanced matrix could be the best one since it eliminates the potential clashes between leaders, keeps communication open, and makes it easy to get to successful project delivery. 

As you can already conclude, in a strong matrix, project managers have more authority than functional managers to allocate resources properly and plan budgets with a free hand.

Some people find the matrix structure either confusing or overwhelming simply because it typically involves several chains of commands and multiple reporting structures. The truth is, it’s way less complicated than it seems at first! 

If you create a thoughtful project plan , assign and manage assets most efficiently, and develop a communication plan, you’ll be good. 👌 

Team and cross-team collaboration and shared resource planning result in higher productivity rates within most matrix organizations. The matrix structure makes up for the weaknesses of the single-boss structure, and this duality of authorities can contribute to better products or services. 

Now, let’s take a look at some of the benefits of implementing a matrix organizational structure!

Fosters cross-departmental communication

Unlike the top-down-organizations, the matrix structure encourages communication between team members and their respective functions and project managers.

We know dealing with two (or sometimes even more) managers and reporting to them may sound a bit off. However, engaging with key decision-makers can actually facilitate the exchange of information and expertise and improve organization-wide relationships. 

 Scheduling appointments regularly is a great option to strengthen the coordination process, big time. 

Improves employee engagement

Being a part of multiple teams and reporting to multiple managers increases employee engagement . The reason for this is simple. It makes them feel like an active part of any project. Employees love when they can make a difference and contribute to getting the project from start to finish. 

Other than that, by recruiting internally, you will save some money you’d otherwise spend on overhead costs if you’d hire new staff every time you’d work on a new product or service. 

This also gives your employees a chance to break the monotony of their work routine, helps them expand their skill set, achieve goals at a faster pace , and deliver projects faster too. 

Allows leaders to set clear project goals

Reporting progress to department heads and project managers and reporting to senior management contributes to achieving greater clarity on objectives, solidifying project goals, and delivering faster. 

Strengthens teamwork

The matrix allows team members to establish dynamic connections with each other and stimulates the development of creative ideas, all of which lead to enhanced and seamless team collaboration. 

4 Matrix Organizational Structures Use-Cases and Examples

In this section, we’ll go through four use cases and examples of matrix organizations to see how other successful companies have implemented this approach. These examples were all created using the ClickUp Whiteboard feature, where you can start with a blank canvas or use one of ClickUp’s templates to help you get started quicker!

This example visually explains something we’ve already mentioned in one of the previous sections. The matrix organization has a rather triangular shape, while the top-down organization has a tree-like shape. 

Thus, in the first example, you can see that sales, finance, and IT teams report to commercial, finance, and technology managers, that then report to both the national organization and product division (PD). This explains those two chains of commands that were also mentioned several times throughout the article. 

The second example displays reporting to a single authority. Sales, finance, and IT teams report to commercial, finance, and technology managers, who report to the national organization that reports to the product division. 

Philip's matrix organizational structure example created in ClickUp Whiteboards

Here’s an example of how Starbucks applies the matrix organizational structure. We used the Whiteboard to visually represent the reporting structure the most popular coffeehouse applies to their business. ☕

Let’s imagine that these four geographic divisions (North America, Asia, Latin America, and EMEA) are project managers. 

So, we have senior VPs who report to executive VPs who report to group presidents, who then report to one of the aforementioned divisions. Finally, each division reports to the global entity, which then reports to the CEO. 

Matrix organization structure example in ClickUp Whiteboard

Again, the Whiteboard view came in handy, and we wanted to show how marketing departments can apply the matrix organization. In a nutshell – you can easily differentiate project managers from the content director, creative director, director of demand generation, and director of product marketing. 

Team members work together on tasks and report to project managers and the directors mentioned above. Project managers report to the director of the project manager, while the director of the project manager and other directors then report to the head of marketing (CMO), who reports to the CEO. 

We can apply this kind of organizational structure to other departments of any engineering company (finance, operations, etc.), and using call center software is also proving to be a valuable tip for enhancing communication channels.  

Marketing matrix organizational structure example created in ClickUp Whiteboard

Last but not least, here’s how an advertising agency can apply the matrix structure to their business. 

You can see that various team members (brand specialist, blog manager, video producer, etc.) report to department managers (marketing, production, creative, and content managers) and a project manager two.  

Project manager two reports to project manager one, who reports to the head of PM. Functional managers then report to the head of marketing, production, and editorial director, while both of the head of PM and the head of marketing, production, and editorial director report to the agency president. 

Agency matrix organizational structure example created in ClickUp Whiteboard via Allaeddine Djaidani

These are just a few matrix examples that you can use as inspiration; there are various ways to structure a balanced matrix organization. If you’d like to create your own matrix organization, you can easily do so in ClickUp’s Whiteboard feature, like I did to create the examples above.

You can start with a blank canvas and use the drag-and-drop feature to easily build your ideal organizational structures . And if you need help getting started or simply want to get a solid framework to start with, then turn to the Organizational Chart Whiteboard Template to give you a helping hand!

Your Turn to Create Your Own Matrix Organizational Structure 

We’ve cleared the air about the fab matrix organizational structure for you and tried to explain how you can make it work well when working on complex projects. 

You can optionally choose to embed your company’s chart on your website to enlighten customers about the modus operandi of your business. 

The idea of reporting to multiple leaders improves collaboration, makes employees more engaged, sparks creativity, eliminates overhead costs, and results in delivering better solutions.  However, to be able to implement the matrix structure, you also need to work with a tool as powerful as the structure itself–ClickUp!

Start using it today to get access to hundreds of features that’ll help your entire organization manage and deliver projects efficiently and tools to help you create an effective matrix organization. 🚀

Guest Writer:

Alladdine Djaidani

Alladdine Djaidani  is a digital marketer and the founder of  HustlerEthos.com

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Matrix Organizational Structure: Advantages & Disadvantages

Here is a guide to matrix organizational structure .

A matrix organizational structure is a company structure where the reporting ladder is in a matrix or grid instead of the traditional hierarchy. This structure means that workers simultaneously report to a functional manager and a product manager. This management system may help organizations develop new goods and services without reorganizing existing groups.

Matrix systems are a strategy for team management . These tactics share some similarities with employee engagement frameworks . You can gain more insight into this concept by reading books on project management .

matrix-organizational-structure

This article includes:

  • definition of matrix organizational structure
  • advantages of matrix organizational structure
  • disadvantages of matrix organizational structure

Let’s get started!

Definition of matrix organizational structure

This reporting structure is one way companies organize themselves to work effectively in complex situations. In this setup, employees report to more than one boss simultaneously. There are two main parts to this structure, which are functional and project-based. The functional side is like a traditional hierarchy where employees report to experts in their field. The project side involves teams from different areas working together on specific tasks.

The idea behind this structure is to make it easier for employees to share knowledge and skills across different parts of the organization, which can lead to better problem-solving and innovation. However, this organizational style can also create confusion about roles and conflicting priorities since folks have multiple bosses. To make this setup work, good communication and coordination are crucial. Companies often use a matrix structure when they need to be agile and collaborative in rapidly changing situations or complex projects.

Types of matrix organizational structure

This system has three forms, each based on how much authority the project manager has.

These types include:

Weak matrix

In a weak matrix, a project manager has limited authority and control over project resources and decision-making. Functional managers retain most of the power and authority, while the project manager’s role is more advisory or coordinative. The weak matrix structure often results in a situation where the project manager does not have the ability to make critical decisions or allocate resources independently. This structure may make it challenging for project managers to ensure success. This matrix structure typically favors the functional hierarchy, with the project manager playing a less influential role in managing projects.

Balanced matrix

Project managers and department heads have equal power in a balanced matrix, and team members report to both parties. Keeping the lines of communication open between the project’s various leaders is essential to progress. Under this framework, employees will work on both job obligations and special projects simultaneously.

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Strong matrix

Strong matrices allow project managers to control projects more than the department heads. This arrangement generates a strong organizational structure since the project manager has complete responsibility for the project. Although the departmental head can supervise the project, they do not have the final say on project direction. The strong matrix gives participants a direct path to the project manager while maintaining the functional aspect of the operation.

The advantages of matrix organizational structure

Some of the advantages of implementing grid organization include the following.

1. Cheaper to implement

Most firms find that using this structure is more cost-effective than establishing a specialized project team. This benefit does not apply to long-term commitments, but it is perfect for prototyping new goods or services. When employees from other departments can collaborate with a project manager to build new products and solutions, they can use the knowledge and skills of numerous specialties at once.

In many cases, teams created with a matrix system are stronger than those formed just using a functional approach due to the resulting diversity.

2. Convenient sharing of resources in different divisions

The structure’s capacity to share highly-skilled resources is one of its most important benefits. The structure is flexible enough to adapt to the demands of multiple ongoing projects and the many divisions within the firm. Therefore, the system’s efficiency will suffer if obstructions occur within communication channels. The company’s increased integration reduces the restrictions between groups and silos and promotes collaboration.

3. Improved internal communication

Communication becomes more manageable when a firm adopts a matrix system. Employees can shuttle freely between departments due to the lack of departmental barriers. This approach encourages workers to openly share their knowledge and skills to benefit the entire team.

New sharing and cooperation possibilities often arise because of this structure’s simplicity of communication. Despite occasional exceptions, this work often results in a more effective and efficient organization.

Check out this list of books on communication .

4. Better risk management

Matrix structures enhance risk management by uniting employees with diverse skills and perspectives from various departments. These cross-functional teams are better equipped to identify, assess, and navigate potential risks to project success. The dual reporting lines provide an additional layer of oversight, simplifying risk monitoring and management. The combination of specialized knowledge and collaboration helps organizations address challenges. This collaboration reduces the likelihood of costly setbacks.

5. Stronger competitive advantage

The mixed hierarchy can have a significant competitive edge, particularly in industries marked by rapid change and innovation. The flexibility lets organizations quickly respond to market shifts, emerging opportunities, and evolving customer demands. Firms can use the collective expertise of cross-functional teams. Thus, businesses can speed up the development and launch of new products or services, outpace competitors, and adapt to evolving industry dynamics. This adaptability and responsiveness can establish a company as an industry leader.

6. Professional growth for employees

With this organizational style, workers are more likely to pursue professional growth opportunities and progress in their careers. The structure opens the employees up to various projects rather than limiting them to the work of a single department or team. As a result, the organization can foster fresh perspectives, creativity, and problem-solving methods.

Working outside of one’s comfort zone provides an invaluable experience for the entire team. Experience increases the full scope of professional abilities. This benefit helps employees feel better about their work while increasing their value as workers. Greater job stability is one result of this benefit.

7. Less downtime with internal resources

With proper management, the matrix’s flexibility allows for more rest for employees. Employees may build their strengths instead of having to enhance their abilities or skills for effectiveness. This system leads to a natural increase in quality and reduces the time required to execute the project.

Although this advantage increases the likelihood of having one employee handle numerous tasks at once, it still makes better use of the abilities of the ordinary worker. There will be fewer times of idleness across the company since other employees can work on other tasks if they are not busy elsewhere.

8. More standardized procedures across the company

Every employee can work together when the resource pool is flexible. Results are more consistent across the board since employees follow standard operating procedures. The management demands the same outcomes from all employees, even if they work on separate projects. This situation means there is no uncertainty about who is responsible for a task. Standard procedures mean transitioning between projects is seamless since there is minimal learning.

There may be job security concerns with standardization if artificial intelligence can perform repetitious work. On the other hand, when you generate better results with less labor, you may pass the savings on to customers and gain a competitive edge.

9. Faster project delivery

In a matrix structure, projects tend to move more swiftly due to efficient resource use. Project managers have the flexibility to assemble cross-functional teams with the required expertise. This process expedites decision-making and reduces project timelines. Further, collaboration within matrix structures encourages open communication and knowledge sharing. This open dialogue streamlines project delivery by avoiding common bottlenecks and hurdles.

10. Better job security in the firm

This collaborative system provides better work stability, meaning the firm enjoys higher employee loyalty. Employees who work in a right-to-work environment do not need to worry that one individual’s impulses will affect their livelihood. Working in a company that offers a sense of job security can motivate employees to work more diligently, considering workers have a high stake in the success of each project. With this structure, leaders can expect the quality and quantity of work to improve with time.

Disadvantages of matrix organizational structure

Some of the drawbacks of this structure include the following.

1. Less effective without managers’ cooperation

In a matrix system, employees often answer to different higher-ups. With this strategy, most firms have two independent chains of command, which means that each supervisor must be on the same page with other parties to ensure maximum productivity. If superiors provide conflicting information to workers, then work quality and quantity drop.

When there is a power struggle between two project leaders, the whole team is affected, which can impact productivity.

2. Possible resistance to change

Transitioning to a matrix structure can face resistance, especially if employees are used to traditional hierarchies. This resistance often comes from concerns about unclear roles, power dynamics, and the complexity of reporting to multiple managers. Successfully putting a matrix structure into place requires a well-planned change management strategy. For instance, this strategy should cover clear communication about the reasons for the change, training programs to help employees adjust, and efforts to address concerns and gain support for the new structure. Overcoming resistance is crucial for a smooth transition and realizing the structure’s benefits.

3. High risk of discord

In a matrix organizational structure, there is a high risk of disagreements and confusion. This issue happens because employees report to two or more managers, which can lead to conflicting directions and disputes. It is also possible for managers to clash over resources and decision-making. To minimize these issues, clear communication, well-defined roles, and a reliable way to resolve conflicts are essential for the smooth operation of the matrix structure.

4. Higher organizational complexity

Traditional hierarchical models have been in use for millennia because they provide a straightforward framework for reporting. Every employee has one manager. Supervisors benefit from knowing exactly who their direct subordinates are and their day-to-day tasks.

There are various ways to take responsibility in a matrix organizational system, which alters this dynamic. There must be a high level of coordination between the project and functional management to guarantee that the organization’s goal and vision remain at the forefront.

5. Conflicting management directives

The purpose of a matrix format is to have two or more sets of managers concentrate on a certain area of the company. While this method reduces the need for multitasking, it is not necessarily more efficient. Different management directions from other lines of command might occasionally clash. Each individual and team has its unique competitiveness that might influence teamwork.

Therefore, the activities of the project and functional managers may generate issues for direct reports since workers do not know which adheres to the company’s guidelines. A lack of clarity in the C-Suite on how to handle this potential disadvantage may lead to significant deadlock in the business.

Additionally, the dual-reporting nature might be confusing for employees. Confusion might arise about a worker’s performance if more than one boss oversees the workforce. This uncertainty might cause some employees to question which boss is in charge. Therefore, most businesses demand that all relevant management staff get employee reports simultaneously.

6. Slow decision-making process

In a matrix structure, decision-making can become slow due to employees needing to consult multiple managers before reaching conclusions. This process can result in project delays and hinder the organization’s agility in responding to market changes. Effective communication and decision-making processes are vital to address this challenge.

7. A heavier workload for certain employees

Matrix formats may lead to a dramatic increase in the workload of the ordinary employee. A higher workload may lead to decreased work satisfaction, increased staff turnover, and increased stress and burnout. Due to their experience and expertise, team members often get tasks above and beyond their normal work obligations.

To prevent this problem, managers can review job assignments. It is critical to have the best and the brightest working on each project. However, there is a limit on what the worker can cover within the allotted daily work time. Overworking the best employees can drive them to seek employment elsewhere.

8. Lack of clarity

Having several supervisors for a single employee may not contribute to professional growth. The managers may ignore coaching responsibilities and eventually forget altogether. Two-boss systems may lead to a lack of clarity on who is accountable for evaluating the performance of individual employees.

When workers have spent time working as a cohesive unit, they are more effective as a whole. Disrupting this flow might make team members less productive. Workers who are unsure when they may return to their regular tasks may find themselves in uncertainty and conflict.

9. Problem with resource allocation

When everything goes according to plan, the system will place the best employees in critical positions. The reality is that managers often keep their most talented employees confined so they cannot work for other teams. Eventually, available employees have fewer qualifications and expertise, ultimately hurting the final product or service.

10. Hard to tell who is in charge

In the traditional chain of command, a worker reports to a direct supervisor. There is a new chain of command for every new supervisor appointed to a project in a matrix layout. It is difficult to figure out who is in control when there are several supervisors making demands on a worker’s time and attention. As a result, it may be challenging to determine which leader has the last word in making key choices.

A matrix organizational structure works better for a company’s huge, complicated projects. It makes sense to use this option when it is necessary to efficiently process a massive volume of information or quickly deploy specialized expertise. The conventional chain of command might not work well in such situations.

Companies need to analyze their motivations and requirements before deciding whether or not to employ a matrix structure. The advantages may be beneficial if the current processes fall short or there is an expectation of rapid growth. The costs and complexity of this essential decision may discourage some organizations.

Firms must consider the benefits and drawbacks of matrix management. The structure might not work for small company owners, partnerships, and single proprietors, yet major corporations needing to streamline their operations may find it helpful.

Next, check out this exploration of leadership vs. management and this list of manager books .

FAQ: Matrix organizational structure

Here are answers to questions about matrix organizational structure.

What is a matrix organizational structure?

In this company structure, the reporting ladder is in a matrix or grid instead of the traditional hierarchy.

What are the characteristics of a matrix organization?

The characteristics of a matrix organization include multiple chains of command, a collaboration between different departments, and sharing of skilled resources.

What are the advantages of matrix organizational structure?

Some advantages include better opportunities to learn new skills, more job security, and improved internal communication.

What are the disadvantages of matrix organizational structure?

Some of the disadvantages include a lack of clarity, a higher organizational complexity, and risks of conflict.

Author avatar

Author: Grace He

People & Culture Director at teambuilding.com. Grace is the Director of People & Culture at TeamBuilding. She studied Industrial and Labor Relations at Cornell University, Information Science at East China Normal University and earned an MBA at Washington State University.

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Matrix Organizational Structure 101: A Comprehensive Guide

Matrix organisational structure is one of the best HR practices. This blog will educate you and help you successfully navigate a matrix organisation, whether you're a manager or an employee.

matrix organization assignment

Wondering what sort of a structure works for your organisation? Is a matrix organistional structure the answer? We got you!

No business can thrive without some working formula, a structure so to say, of monitoring and allotting tasks.

For long, companies relied on the linear vertical structure of operation - where each employee in a department reported to their superior and then, the superior would take it to the chief executive officer or someone similar in the hierarchy of the company. 

No interaction was established nor expected between employees belonging to different departments. Soon, the inefficiency of such a protocol was realized for it impeded collaborative work within the business. 

Today, the vertical organizational structure in companies has been replaced by a less restrictive yet infinitely more complex “Matrix organizational structure”.

‍ This blog aims to shed light on this working structure and to familiarise the reader with its advantages, disadvantages and the ins and outs of how to successfully implement the matrix organizational structure in their office space.  ‍

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What is a Matrix Organization Structure?

A matrix organizational structure features an intersectional grid of the traditional vertical hierarchical flow of work and a collaborative horizontal flow of reporting. 

The hierarchical structure involves a classic flow of management in which employees report to a functional manager who then reports to the higher authority, in a tree-like representation.

A horizontal structure can be imagined as a sort of correspondence line between employees of multiple departments who report to additional project/product managers. 

The matrix organizational structure combines the best of both worlds in a grid, allowing for collaboration across departmental blocks in the company, thus, bringing synergy between different silos of the business to effectively carry out demanding projects. 

functional hierarchical organisation flow chart

The matrix organizational structure looks like a rectangular network connecting various points across a business, as illustrated in the following graphic. 

matrix organisation flow chart

This structure of business works out perfectly for companies aiming to efficiently accomplish projects in conjunction with their daily operations.

Employees can carry out their daily functional commitments in the company whilst also dedicating effort to ongoing projects by collaborating with other department workers. 

A sort of two-boss system is created wherein a single employee reports to their functional manager as well as the project manager for a specific project.

How Did the Matrix Organization Structure Come About?

The need for an interdisciplinary perspective for the execution of complicated projects was first felt in the 1960s within the US aerospace industry.

The complex mission to put man on the moon established the necessity of concomitant brain power and expertise from professionals across different industries. 

We can only imagine that astronomical projects of such magnitude could only be accomplished with the combined knowledge of chemists, astrophysicists, geologists, engineers and government officials.

So, there is no surprise that when aerospace firms needed to establish the intent and preparation behind their projects in front of government employees, they created specific organizational charts to showcase their project management teams. 

early matrix organisation structure example

This paved the way for what is today known as the “matrix organization structure”. Such a structure allows for the successful completion of large-scale, complicated projects that are beyond the grasp of a single department within an organization.

There is not only an augmented level of collaboration in this structure but also, a higher sense of accountability for the effective execution of designated responsibilities. 

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How Does The Matrix Organizational Structure Work?

Although it may seem unimaginably complex at first glance - almost resembling a spider’s web, the operational formula of a matrix organizational structure is rather straightforward. We shall explain the working by breaking down the structure into two lines that you must follow along. 

The vertical line of the matrix structure represents the typical departmental function in a company wherein a functional manager manages their team.

An example of this could be the Human Resources team which corresponds with the Human Resources Manager, who finally reports to the executive officer. 

Moving horizontally across the matrix we find the line of communication between employees of different verticals of the company who are managed by a single project manager.

For example, depending on the nature and demand of the project, the project manager could have members from the HR, Marketing, Finance and Production departments of the company.

This would in effect lead to two points of accountability for the members of a project as they would report to both the Functional Manager and the Project Manager. 

how a matrix structure work flowchart

Roles Within The Matrix Organizational Structure

1. managerial roles.

The managerial roles across the matrix structure are the primary focus of this model - while a functional manager forms part of the common model of working adopted by most companies, it is the flexibility of the role and responsibility of a project manager that sets this model above others.

The functional manager would oversee the smooth performance of duties by each employee within a functional department of the company, say the Sales department or the Finance department. 

The project manager on the other hand would bring together employees from different functional departments to yield high-productivity and out-of-the-box inputs for challenging problems in a collaborative effort.

A modern-day pharmaceutical company provides a great example of such interdisciplinary team effort wherein the Microbiology, Chemistry, R&D, QC and QA, and Manufacturing verticals all sit down to discuss analyses from their studies and past experiences and produce a medicinal solution for a plaguing disease such as in the case of the Covid pandemic. 

For a matrix model to function effectively, communication and essential distribution of authority between the two managers are crucial.

Now, by effective communication, we could be looking at weekly or daily meetings of the functional and project managers to discuss their team’s progress and the shortcomings to be addressed for a particular project.

By distribution of authority, we refer to the nature of the role of a project manager - the flexibility of their position suggests that in some cases, they could be a mere collaborator but in others, their authority might supersede that of the functional manager.

Hence, maintaining a delicate balance is rather important to avoid internal conflicts. 

2. Team Members

Coming to the team members in the grid, they will be expected to fulfil their individual functional responsibilities within a department and also to perform separate tasks assigned by the project manager.

So, an efficient and consistent channel of communication must be established between each of the managers and the team members to ensure excellent flow of work and redressal of complications. 

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Features of a Typical Matrix Organization (with examples)

Nothing goes on to explain a new concept better than live, working instances that have successfully applied the formulae.

In this section of the article, we will be elucidating the inner workings of typical matrix organizations through the case studies of two extremely well-known and established businesses.

These businesses are mega organizations with operative units spread out globally demanding an extremely efficient coordination and communication mechanism to ensure high productivity in meeting their goals. 

1. Starbucks

The first example of a matrix organization structure that we are going to look at is that of the American multinational coffeehouse company that is all the rave today - Starbucks. 

The company combines into an operational grid a functional hierarchy managed in a top-down manner and product-based/geographic divisions which can be viewed as the project managers.

Functional hierarchy

At the company’s headquarters, a system of vertical functional hierarchy is followed at the top of which lie the Chief Executive Officer and other C-level executives. We can expect there to be various functional departments including

Finance, Marketing and Human Resources. These departments come up with crucial policies and decisions specific to their divisions that are implemented organization-wide and overseen by the C-level executives. 

Product-based/geographic divisions

The corporation has regional divisions in its structure which aim to group together physical locations under the supervision of a single leader. This creates a two-boss system wherein each local manager at Starbucks reports to a regional head (for e.g., President of Asia operations) and a functional head (e.g., VP of Finance).

Additionally, there are product divisions to oversee the creative and technical aspects of the variety of products offered by the company (the secret menu is probably developed under a product division!). For a company like Starbucks, products become its focal point so having separate divisions for food items, coffee or merchandise is imperative for the expansion of its product catalog. 

In brief, there are senior VPs of functional departments reporting to executive VPs who then report to group presidents who come under geographic division heads. The geographic heads are in turn, accountable to the global entity which finally reports to the head of the jungle i.e., the CEO.

Here’s the matrix organizational structure chart for Starbucks (covering three geographical divisions - a similar chart is also applicable for the North America division) to give  you a visual representation: 

matrix organizational structure chart for Starbucks

The second case-study at hand is of the worldwide top footwear, apparel and equipment company Nike which has emerged invincible amidst stiff competition with other global brands. Today,

Nike operates in over 170 countries owing to its diversified management structure which has allowed the company to expand globally while catering to the varied local demands.

The company maintains a hierarchical ladder with the global HQ at the top, followed by regional headquarters and subsidiaries. Its management model is based on a matrix organizational structure at the global as well as sub-regional levels. 

We will take a look at the sub-regional matrix organizational structure where employees report to two authorities - one from the functional department and the second from the product division.

So, essentially, a functional manager and a project manager (a crucial feature of the matrix model). The multiple reporting lines represented by the following matrix organizational chart exemplify the smooth execution of duties and a network of accountability that backs the success of the company. 

matrix organizational structure chart for Nike

Different Types of Matrix Structures

The matrix organizational structure can be classified into three types, namely, the weak, balanced and strong matrix structures. Here, judgement about the efficiency of the structures must not be passed based on the nomenclature simply because the names are solely dependent on the nature of the distribution of authority and responsibility between the functional and the project managers. This distribution is rather fluid and may vary from project to project. 

The weak matrix structure implies that the assignment of authority is such that the functional manager’s power transcends that of the project manager. The project manager has the role of a facilitator or coordinator in this particular instance, with their authority limited to launching only minor project management initiatives. 

The strong matrix structure is the exact opposite - with greater power to allocate funds and resources, establish project timelines and distribute tasks, lying in the sole hands of the project manager.

Arguably, the balanced matrix structure warrants the equal distribution of power, thus, perfectly preventing the scale from tipping over to either side. The employees report to both the functional manager and the project manager with an equal perception of authority. Moreover, this structure maintains the horizontal line of power between the managers avoiding any power clashes, and allowing for open and effective communication to carry out the effective execution of the project demands in collaboration. 

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Pros and Cons of The Matrix Organization Structure

To assess whether instituting the matrix organization structure into your company is the right move, just looking at its modus operandi might not suffice. It is equally important to establish what benefits your company might receive from the reorganization and what challenges it is likely to face.

If the former outweighs the latter, then you might be ready to take on the matrix model. So, this section of the blog is meant to familiarize you with the pros and cons of a matrix organizational structure. 

For large companies with a global circulation of various products and services, the matrix structure is an absolute boon - allowing for the union of diverse professional areas to produce dynamic solutions. 

1. Collaboration across departments

One of the greatest benefits of the matrix organization structure is that it fosters interaction between various functional departments of the company. This is of prime importance when a project requires the perspectives of people from different professional backgrounds.

When brilliant minds that think in different directions are brought together, innovative and creative ideas are born which becomes necessary when a company is looking at expanding its limits with unfamiliar ventures. 

2. Sharing resources

The matrix structure allows for the utilization of resources, skills and technologies in a unified manner that might otherwise remain stocked within geographic/functional silos.

Essentially, the organization can make the best out of the resources available to them already through interdisciplinary cross-communication instead of outsourcing expertise and talent for a dynamic project. 

3. Flexibility through faster decisions

The matrix structure helps in improving and speeding-up decision-making in the organization by distributing authority among multiple stakeholders.

Reporting to department heads and project managers who then report to higher authorities allows for clarification of the objectives of the project, helps set clear goals and makes execution faster. 

4. Broadening of employees’ capabilities

As organizations emerge as global and confederated entities, it becomes imperative that the capabilities of the workforce stretch beyond their functional and/or regional boundaries.

The matrix structure fosters the development of new skill sets in the employees as they work with other team members and allows for the broadening of their thought horizons. 

5. Strengthened teamwork

The matrix is ideal for a company to grow in a dynamic work environment. As employees meet their coworkers beyond the boundaries of each of their work demands, communication and creativity flow seamlessly.

This leads to a fruitful exchange of ideas and strengthened teamwork in the organization. 

advantages ofmatrix organisational structure image

As bright and sunny as the pros of establishing a matrix organizational structure appear, there are some downsides and challenges that such a complex and integrated work environment bring to the table.

However, it must be noted that most of these challenges are preventable and treatable through extensive planning and anticipatory precautionary measures. 

1. Increased Ambiguity 

The matrix model is based on shared responsibility and distributed authority, which if not managed carefully, could lead to a blurry and unclear division in the roles of managers across the matrix. Therefore, there might be an inefficient level of accountability for work due to decreased confidence in leaders in their ability to get things done as resources become shared. 

2. More meetings and consequent costs

As communication and active collaboration by breaking through silo divisions is one of the primary goals of the matrix structure, it undoubtedly leads to a greater number of meetings. Meetings might be needed very frequently and involve more people than actually required because of the complex interconnectedness of the matrix structure. This would lead to greater costs being incurred by the company to arrange meetings more frequently. 

3. Conflicts over resources

As accountabilities and responsibilities overlap, conflicts over available resources are inevitable in a matrix organization. When bureaucratic roles increase, more approvals are needed to acquire basic resources in the company, this can lead to frustration and resource conflicts. 

4. Difficulty in the assessment of employee performance

In a matrix organization, employees usually are handling the workload for the projects in addition to their usual functional roles in the company. Thus, it might become a task to keep track of all the responsibilities shouldered by a specific team member and lead to dissatisfaction in the workforce. 

Disadvabtages-of-matrix-organisation-chart

How to Maximize Output and Productivity in Matrix Management: General tips 

A complex organizational structure like the matrix organization structure demands hard work and consistent moves to tackle the knots in the system. Here are some great tips to maximize output and productivity in a matrix management model:

1. People rotation within the grid

One of the greatest tips for any matrix organization is to rotate people around the matrix. By allowing employees to take on roles on the other side, not only would there be a fresher perspective across the board but also increase sensitivity in the team.

As long as the quality standards of the company remain untouched, creating explicit professional moves across the matrix can help grow the team and foster a positive outlook on the system. 

2. Maintaining a matrix structure = Strategic planning 

It is not an easy task to maintain a complex structure like a matrix in your organization if you are not prepared for extensive planning and commitment to make it work. The best trick in this regard is to ensure that yearly planning cycles accommodate discussions about the successes and shortcomings of the matrix structure in the previous year.

Moreover, subsequent strategies must be planned to tackle the problems faced by the company to ensure that each side of the matrix fits together. This would help avoid dissonance over the coming year. 

3. Defining clear roles and expectations from the managers

Harmony between the managerial roles is central to the successful working of a matrix structure. So, whenever designing a matrix structure for your organization, it is essential that a clear expectation is communicated to both the managers - functional and project.

This would avoid any conflicts over authority later on in the model. For e.g., for a certain project, the functional manager might be expected to look over the resources and finances while the project manager would be needed to supervise the intricacies involved and report on the project's progress. 

4. Maintaining an accountability check tool for the employees

Not only would this be beneficial in ensuring that a smooth pace of work is being maintained and nobody is lagging behind, but would also help in the performance evaluation of individuals.

For e.g., A weekly excel sheet can be maintained that employees must fill out with a summary of tasks that they have accomplished towards the project or pertaining to their functional roles. 

5. Take it in stride!

Another great piece of advice for matrix organizations is to be accepting of the faults in their system instead of shoving sand over them. Coming to terms with the holes within the matrix would open channels of communication and help resolve the problems. Remaining ignorant of the faults and only praising how well the matrix is looking on the surface is not going to be sustainable.

So, make it a point to communicate the pros and cons of the matrix organizational structure relative to your company and build a positive tolerance within your employee pool for it. Foster trust in your organization that they are being heard and their problems will be resolved. 

As Mr. Jeroen De Flander puts it “A matrix structure is not an excuse not to perform!” Therefore, do not let shortcomings of the structure come in the way of your organization’s outputs. Keep striving to make it work! 

Best Project Management Tools For Matrix Organizations

Project management tools are a great mechanism to centralize communication and exchange of files, meeting schedules and updates for a team or an organization. Having everything managed at the same location helps avoid unwanted confusion.

Undoubtedly, project management tools can help max out the positive outcomes of a matrix organization as well. Here are some project management software that will help your matrix structure thrive: 

podio how it works screenshot

One of the central pillars of a matrix organization is communication and collaboration across various professional and geographic divisions. 

Podio is unmatched in its capacity to offer a platform for project managers to notify the team about every tidbit related to the project. The manager can easily upload plans, meeting schedules and other important files for everyone to access in the same workspace.

It offers other features like scheduling meetings, and personal dashboards along with a social-media type feed to get everyone on board. It is compatible with other devices and just perfect for creating a streamlined flow of communication within the organization. 

Trello project in action

Trello is an easily customizable project management software that allows user to create their own platform interface to fit the needs of their current project. The flexibility of this software is great for any matrix organization with a fluid movement of roles across the grid.

‍ Trello presents users with a Kanban board which allows for effective communication of project progression and allows easy assignment of tasks and documents of need. 

The best part about Trello is that it easily integrates with other tools like GoogleDrive, Slack, DropBox, etc, and so, the team would have it all in one place without any fuss! 

Wrike resource management tool screenshot

A matrix organization would fall flat on the face without a proper resource management regime in place. In a matrix structure, resources are primarily shared across the board making the organization susceptible to under-utilization of some and over-burdening of others. 

A resource management tool like Wrike is a matrix organization’s best buddy. It provides real-time insight into the progress of a project - giving the project manager the opportunity to move things around in a timely manner. Thus, Wrike aids in quick redressal of team members’ queries, efficient distribution of tasks and maintenance of workload balance across the team. 

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FAQs about Matrix Organizational Structure

What companies use matrix organizational structure.

Matrix organization structure is best utilized by large companies that offer a variety of products and services at a global level. In such companies, it is imperative to complement the functional hierarchy with a horizontal flow either in the form of product divisions and/or geographical divisions. Product divisions allow organizations to focus on the research, development and financial considerations involved with the launch of innovative products. Geographical divisions within the corporation facilitate the implementation of company policies efficiently on local levels. Examples of companies incorporating the matrix organizational structure include multinational conglomerates like Starbucks, Phillips, Nike, Sony and Facebook. 

What is a balanced matrix organizational structure?

A balanced matrix structure is a middle ground between the weak and strong matrix structures with equal distribution of power between the functional managers and project managers. The employees report to both the functional manager and the project manager with an equal perception of authority. This structure is considered to be the best among the three as it helps avoid any power clashes between the two bosses in the model and allows open communication for the successful delivery of project objectives and goals. 

What is the difference between Matrix and Functional Organization?

While the Functional organization structure is a long-standing classical structure of management in companies, the Matrix organization is relatively newer yet offers greater flexibility and collaboration within the company. The functional organization structure is the more common, tried and trusted structure in long-established countries involving the distribution of employees based on different functional/professional areas such as Finance, Marketing, Sales, Research and Development, etc. On the converse, the matrix organization structure combines the vertical functional hierarchy with a horizontal flow of skills and information involving cross-communication and collaboration among employees across different functional divisions. 

matrix organization assignment

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How to Make Your Matrix Organization Really Work

Shifting the reporting structure to a matrix model has its challenges, but leaders can find success by focusing on four key elements.

  • Leading Change
  • Organizational Structure
  • Talent Management
  • Organizational Transformation

matrix organization assignment

Much has been written about why matrix organizations are needed and what they look like at a surface level. Far less advice is available about what it takes to make them work. This information gap sets many teams up for disappointment because matrix organizations flourish or fail based on attention to their design and dynamics.

Consider the case of Juan, a regional supply chain leader in a large health care system who was caught between competing agendas from multiple bosses in his organization. Juan reports to Brenda, his enterprise-level boss in the supply chain organization, but he also has a reporting relationship to Steve, a regional operations executive. (Note: All names have been changed for anonymity.)

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Brenda’s goals for Juan included implementing a new supplier network model with ambitious timelines. Meeting her goals would require a substantial time investment for Juan and his small team. Meanwhile, Steve was grappling with critical materials and staffing shortages and had asked Juan to optimize workforce and supply costs. Steve expected Juan to meet a tight schedule for opening a new clinical facility to help reach regional volume targets.

Brenda wanted Juan to avoid changes to the workforce or supply commitments until the new network model was approved by senior leadership. However, this would negatively impact Steve’s regional budget and goals.

This situation left Juan frustrated and uncertain about how to prioritize the trade-offs and frame solutions mutually beneficial to Brenda and Steve. Additionally, this made him worry about how his leaders would perceive his performance and ability to deliver on goals.

The challenges Juan, Brenda, and Steve faced are typical of those faced by leaders moving to a matrix organization at Atrium Health. Atrium Health is a nonprofit health care system based in Charlotte, North Carolina, with more than 75,000 employees and over $12 billion in annual revenues. Founded in 1940 as a single charitable hospital serving the local community in Charlotte, the system had grown mainly in North Carolina until 2018. At that time, Atrium Health’s leadership, recognizing that greater resources and scale were necessary to meet competitive challenges, initiated a series of mergers with other health care systems to create a larger system with operations in North and South Carolina, Georgia, and Alabama.

Atrium Health’s leadership understood early on that the organization’s legacy functional structure could not cope with the increased scale and geographical dispersion.

About the Authors

Vishal Bhalla is the chief experience officer at Atrium Health. Daniel Gandarilla is the chief talent officer at Atrium Health. Michael Watkins is the cofounder of advisory firm Genesis and a professor of leadership at the International Institute for Management Development (IMD).

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matrix organization assignment

Your Complete Guide to the Matrix Organizational Structure (With Examples)

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Your Complete Guide to the Matrix Organizational Structure (With Examples)

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The business world is constantly changing. Do you have what it takes to keep up? And how do you balance the priorities of different teams and projects?

Keeping your business processes efficient can be a tough call. But if you’re looking for ways to enhance project performance , the matrix organizational structure should be just what you need.

Matrix organizational structure allows managers to have more control over the project while still leveraging the skills and expertise of functional teams. By sharing resources across departments and functions, you can easily optimize resource utilization and improve decision-making and problem-solving.

As an innovative approach to organizing a company, the matrix organizational structure has gained popularity in recent years. But it’s not without its challenges. In this guide, we’ll explore what the matrix-based organizational structure is, its pros and cons, and how to implement it effectively.

Whether you’re a business owner considering a new organizational structure or an employee curious about how the matrix structure works, this guide will help you navigate the complex world of the matrix organization.

What is a matrix organizational structure

What is a matrix organizational structure?

In a matrix organizational structure, employees report to more than one manager. In this case, the traditional top-down hierarchy doesn’t work. Instead, as the name suggests, the reporting lines in the team are arranged in a matrix.

Think of a matrix organizational structure as a sports team that has both a head coach and assistant coaches. The head coach represents the functional manager, who oversees the team’s overall strategy, training, and development. Meanwhile, the assistant coaches represent project managers, who are responsible for leading individual projects or initiatives.

Each assistant coach works with a specific group of players to develop their skills. However, all coaches work together to ensure that the team is functioning as a cohesive unit and achieving its overall goals. Similarly, in a matrix organization, employees have both a functional manager and a project manager who work together to ensure that they’re developing the skills necessary to contribute to the organization’s success on both individual projects and overall goals.

History and origin a quick glance

Project management reporting levels (Image credit: PMI )

History and origin: a quick glance

The matrix organizational structure was first developed in the aerospace industry in the 1960s. Team leaders used this concept to address the complex challenges of managing large-scale projects, such as the development of military aircraft and space programs. The matrix structure helped to bring together specialists from different functional areas, such as engineering, manufacturing, and testing, to work collaboratively on a specific project.

Since its development in the 1960s, the matrix structure has become a widely used organizational design, particularly in large corporations that manage complex projects and initiatives.

How to make the matrix organizational structure work

How to make the matrix organizational structure work?

More and more teams steer away from the hierarchical organization to move more quickly and boost their flexibility. In fact, 73% of digitally maturing companies intentionally build a work environment where cross-functional teams can unlock their full potential.

We’ve handpicked tried-and-tested tips to help you make the matrix organizational structure work effectively.

Tip 1: Clearly define roles and responsibilities.

It’s crucial to define and communicate clear roles and responsibilities for each employee, including their reporting structure and the expectations for their work. This helps to avoid confusion or conflicts that can arise from having multiple managers.

Tip 2: Build a culture of collaboration.

A successful matrix structure depends on cross-functional collaboration and teamwork. Therefore, leaders should work to create a culture that encourages cooperation between departments and teams.

Tip 3: Provide training and development opportunities.

Employees in a matrix organization need to have the skills and knowledge to work across functional areas and adapt to changing priorities. That’s why offering training and development opportunities can help employees handle the demands of the matrix structure successfully.

Tip 4: Use technology to support communication.

Effective communication is the foundation of the matrix organization. Using collaboration tools and project management software, such as Teamly , can help you facilitate communication and coordination between employees and teams.

Tip 5: Establish clear decision-making processes.

Confusion? Conflicts around decision-making? You can’t avoid them in a matrix organizational structure. That’s why leaders should boost effective cross-team collaboration and establish clear processes for making decisions.

Who is the boss? Finding the balance of power in a matrix organization

Who is the boss? Finding the balance of power in a matrix organization

Will your matrix organizational structure be a success? It greatly depends on the balance of power between two roles: the functional manager and the project manager.

If the balance of power is too heavily weighted towards the functional manager, it can lead to conflicts between the functional and project teams. The reason is – the project manager may not have enough authority to make critical project decisions. Conversely, if the balance of power is too heavily weighted towards the project manager, it can lead to conflicts with the functional manager over resource allocation and training.

To make the matrix organizational structure work effectively, both managers need to have a shared understanding of their roles and responsibilities, including decision-making authority, resource allocation, and performance evaluation.

Types of matrix organizational structure

There are three main types of matrix organizational structure: weak, balanced, and strong.

Types of matrix organizational structure

Types of organizational structure (Image credit: ScienceDirect )

Depending on the type of matrix structure, the roles and authority of the functional manager and project manager vary.

Weak matrix

In a weak matrix structure, the functional manager holds more authority than the project manager. This implies that the project manager’s primary responsibility is to coordinate the project, while the functional manager has more control over the team members’ performance and development. This type of matrix structure can be beneficial for companies with limited resources and a low level of project complexity.

Balanced matrix

In a balanced matrix structure, the functional manager and project manager share equal authority. As such, both managers have joint responsibility for the project’s success, and employees may report to both managers. This type of matrix structure can be helpful in ensuring a fair balance between the functional and project manager’s roles.

Strong matrix

On the other hand, in a strong matrix structure, the project manager holds more authority than the functional manager. Consequently, the project manager has greater control over the project’s budget, resources, and staffing. The functional manager’s role is more advisory in nature. This type of matrix structure is most suitable for organizations with complex projects that demand a high level of project manager authority.

A quick example of a matrix organizational structure

As explained above, the matrix organizational structure is a hybrid structure that combines two types of organizational structures: functional and project-based.

Here’s an example of how a matrix organizational structure might work in a software development company.

A sample of a matrix organizational structure

A sample of a matrix organizational structure (Image credit: BCcampus )

As illustrated in the picture above, the CEO oversees three branches, each with its own manager: a business analyst manager responsible for supervising business analysts, a development manager responsible for overseeing developers, and a quality assurance manager responsible for supervising testers. Additionally, there are three product managers who each supervise a business analyst, a developer, and a tester for their respective products. This means that the business analysts, developers, and testers have to report to two different bosses in this setup.

To sum up, a matrix organizational structure allows a software development company to effectively manage software development projects. Teams are cross-functional, which makes them accountable to both their project team and their functional department. The reporting lines in this structure ensure that there is clear accountability and communication among all levels of the organization.

Advantages and disadvantages of the matrix organizational structure

Advantages and disadvantages of the matrix organizational structure

Each type of matrix structure has its own advantages and disadvantages, and you need to carefully consider your specific needs when selecting a matrix structure. To help you make a decision, let’s now explore the pros and cons of the matrix organizational structure.

Advantages of matrix organizational structure

The matrix organizational structure is a dynamic approach to business management that offers numerous advantages over traditional structures. From increased adaptability to employee development opportunities, here are some of the key benefits that make it an attractive option for businesses:

Adaptability and resilience to change

In a matrix structure, resources are spread across different departments and functions, making it easier to pivot and adapt to changing circumstances. Therefore, you can optimize your resource utilization and remain competitive in an ever-changing business environment.

Enhanced communication

The matrix structure encourages communication and collaboration across departments, allowing for more efficient decision-making and problem-solving. This can lead to improved overall team performance and better outcomes.

Use of field-specific expertise

The matrix structure is particularly effective for managing complex projects that require specialized skills and expertise. It enables project managers to have more control over the project while still leveraging the skills and expertise of functional teams.

Employee development opportunities

In a matrix structure, employees have the opportunity to work on different projects, collaborate with colleagues from different functional areas, and develop new skills and expertise. This can provide valuable opportunities for growth and development, leading to increased job satisfaction and engagement.

Increased job satisfaction 

The matrix structure can lead to increased employee satisfaction and engagement, as employees have more autonomy and opportunities for professional growth and development. Usually, this leads to a more positive and productive work environment, benefiting both employees and the organization as a whole.

Having said that, you should take note of the following: while the matrix organizational structure is a popular approach to business management, it isn’t without its drawbacks. In a moment, we’ll discuss the key cons that organizations should consider. But before we explore the disadvantages of matrix organizational structure, let’s see an example of a successful matrix structure.

An example of successful implementation of matrix organizational structure

Philips Electronics is one of the earliest and most well-known examples of a company that successfully implemented the matrix structure. As a result, the company achieved improved financial performance and increased competitiveness.

In the 1970s, Philips underwent a major restructuring, adopting a matrix structure in order to improve its competitiveness and streamline its operations.

Under the new structure, Philips was organized into four main product divisions, each with its own profit and loss responsibility and a number of shared service organizations that provided support to the product divisions. The matrix structure allowed for greater collaboration between different departments and facilitated faster decision-making.

Philips uses the matrix structure to bring together various functional teams to work on specific projects. For example, the company’s Consumer Health division uses a matrix structure to bring together teams responsible for different product categories, such as oral healthcare, mother and child care, and respiratory care. This allows Philips to leverage the expertise of different teams and functions to create innovative products and solutions.

Furthermore, Philips uses the matrix structure to manage its research and development efforts. The company’s Research division is organized around four key areas of focus: healthcare, lighting, consumer lifestyle, and emerging businesses. Researchers in each of these areas collaborate with functional teams from across the company to develop new products and technologies.

The success of Philips’ matrix structure was attributed to a number of factors, including strong leadership, effective communication, and a clear definition of roles and responsibilities. The company also invested heavily in training and development programs to help employees adapt to the new structure and collaborate effectively across different departments.

Disadvantages of matrix organizational structure

The matrix structure has its drawbacks you should be aware of:

Complexities in team management 

The matrix structure is complex and can be challenging to manage, especially in large organizations. It requires clear communication, well-defined roles and responsibilities, and a culture of collaboration and teamwork. If these elements aren’t in place, the structure can become a burden rather than a benefit.

Conflicting priorities

In the matrix structure, employees may have to report to multiple managers with different priorities and interests. This can result in conflicting priorities, making it challenging for employees to prioritize their work and create a cohesive team. As a result, it can be challenging to align goals and objectives across the organization.

Ambiguity in roles and responsibilities

The entire team may face confusion and a lack of accountability. Employees may be unsure of what they need to accomplish. Rather quickly, the matrix structure may start hindering productivity and performance.

Slow decision-making

The matrix structure can sometimes lead to slow decision-making, as decisions may need approvals from multiple managers. This can create bottlenecks and delay project completion.

Increased cost

The matrix structure can be more expensive than other organizational structures as it requires additional resources for coordination and communication. This can put a strain on budgets and resources.

In summary, while the matrix organizational structure has several advantages, it also has some potential drawbacks that organizations need to consider before adopting it.

An example of a failure to implement a matrix organizational structure

One example of a company that shifted to a matrix organizational structure and experienced significant challenges is Cisco Systems. In the late 1990s, Cisco Systems adopted a matrix organizational structure in an effort to better align its product development with customer needs and to improve collaboration between its engineering and sales teams.

However, the implementation of the matrix structure proved to be more challenging than expected. The company struggled to define clear roles and responsibilities, leading to confusion and conflicts between employees. The dual reporting structure also led to slower decision-making, as decisions often had to be approved by multiple managers.

Furthermore, the matrix structure led to increased bureaucracy and overhead costs, as additional resources were required to coordinate and communicate between departments. This led to increased frustration among employees and contributed to a decline in morale.

As a result, in 2001, Cisco Systems abandoned the matrix structure and returned to a more traditional functional structure. While the matrix structure did provide some benefits, the challenges that the company experienced outweighed these benefits and ultimately led to its failure.

How to build your own matrix organizational structure

How to build your own matrix organizational structure

Building a matrix organizational structure involves several steps. Here are the major considerations to keep in mind:

Step 1: Chart your course

Define your objectives: What do you want to achieve with your matrix structure? Whether it’s increasing innovation or reducing duplication of effort, defining your objectives is the first step towards success.

Step 2: Choose your units

Identify the business units that will form the foundation of your matrix structure. Will you group them by product line, geography, or some other factor?

Step 3: Define who reports to whom

Determine the reporting lines for each business unit. In a matrix structure, employees typically report to both a functional manager and a business unit manager.

Step 4: Be clear about responsibilities

Make sure employees know their roles and responsibilities. In a matrix structure, employees may have multiple managers and need to work across different departments, so it’s essential to establish clear guidelines.

Step 5: Build a cooperative environment

Establish communication channels to ensure that employees can effectively collaborate across different departments. This could include regular team meetings, cross-functional projects, or other initiatives.

Step 6: Equip your team

Provide training and support to help employees adapt to the new structure and collaborate effectively. This could include training in project management, communication skills, or other relevant areas.

Step 7: Keep your hand on the pulse

Monitor the effectiveness of the matrix structure and make adjustments as needed. Be ready to modify reporting lines, revise roles and responsibilities, or make other changes to keep your structure working smoothly.

With these steps, you’ll be well on your way to building a successful matrix organizational structure that’ll improve collaboration, boost innovation, and drive your business forward!

What tools to use to build your own matrix organizational structure

What tools to use to build your own matrix organizational structure?

There are several tools and software that can help you build a matrix organizational structure.

Org chart software: Visual tools can help you create visual representations of your matrix structure. These tools often include templates and drag-and-drop features, making it easy to build and modify your structure.

Project management software , such as Teamly , can help you manage tasks and projects across different departments and teams. These tools often include features for assigning tasks, setting deadlines, and tracking progress. By the way, Teamly also includes communication features to help you facilitate collaboration with anyone, anywhere.

Analytics software: Analytics software can help you track key performance metrics, spot areas for improvement, and optimize your matrix structure over time.

Ultimately, the specific tools and software that you choose will depend on your organization’s needs and context. Remember to carefully evaluate your options and choose tools that are well-suited to your particular situation.

Key takeaways

The matrix organizational structure may not be the perfect fit for every organization. Why? Because the way a matrix structure works can make managers feel confused and pulled in different directions.

However, the matrix organizational structure is a powerful tool that can help you optimize your resources, enhance collaboration, and improve project outcomes. By determining reporting lines, defining responsibilities, and establishing communication channels, you can successfully implement a matrix structure and reap its many benefits.

What’s more, with the right software tools, everyone can easily work together and find solutions that help the whole organization reach its goals.

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What is a matrix organization?

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Introduction to matrix organizations.

Understanding the essence of a matrix organization requires delving into its unique inter-departmental dynamics. In this article, we’ll explore the foundational concepts that give the matrix its unique identity, and why it has emerged as an essential model in the business world.

Brief overview of organizational structures

Organizations have evolved over time, adopting various structures to meet their operational needs. From strict hierarchies to flat configurations, the choice of structure profoundly impacts communication, decision-making, and overall efficiency.

The rise of the matrix structure

As businesses grew more global and complex, there emerged a need for an organizational model that could blend functional expertise with product or project focus. Enter the matrix structure, an adaptable design that optimizes both vertical and horizontal flows of authority and communication.

Check out Miro's Matrix Org Chart Template

Key components of a matrix organization.

A matrix organization isn’t just a blend of various departments. It’s a meticulously crafted structure built on core components. In this segment, we'll decode these vital elements that drive a matrix.

Dual reporting relationships

In a matrix, individuals report to both functional managers and product or project managers. This dual reporting system fosters collaboration but also demands adept navigation of potential role conflicts.

Flexible team dynamics

Team compositions in a matrix can be fluid, changing based on project needs. This adaptability ensures the right skills are harnessed at the right time.

Horizontal and vertical flows of information

Information in a matrix flows both ways - top-down (hierarchical) and side-to-side (across functions or projects). This ensures a holistic dissemination and gathering of data.

Variations: Weak vs. strong matrix organizations

The strength of a matrix defines its operational dynamics and power distribution. Here, we differentiate between the two primary variations and discuss finding the right balance.

Characteristics of a weak matrix

A weak matrix leans more towards the functional side. While there's a project manager, their authority is limited, making it appear closer to a functional hierarchy.

Characteristics of a strong matrix

In a strong matrix, the project or product manager holds more sway. They possess substantial authority over budgeting, staffing, and administration, making it more project-centric.

Determining the right balance for your organization

Selecting between a weak or strong matrix hinges on your organizational priorities. Is project success pivotal? Or is functional expertise the cornerstone? Answering such questions will guide the choice.

Comparing matrix to other organizational structures

Every organizational model offers a unique perspective on operations and roles. This section seeks to position the matrix in relation to others, elucidating its distinct attributes.

Matrix vs. Hierarchical

While hierarchical structures revolve around top-down authority, a matrix promotes lateral collaboration, breaking down silos that can exist in traditional hierarchies.

Matrix vs. Flat (or Horizontal)

Flat organizations minimize middle management, fostering a culture of equality. Matrix organizations, while promoting collaboration, still retain multiple managerial levels.

Matrix vs. Networked

Networked structures focus on outsourcing and leveraging partnerships. The matrix, in contrast, centers on internal cross-functional collaboration.

Benefits of adopting a matrix structure

Embracing the matrix brings forth advantages tailored to a dynamic business landscape. From fostering collaboration to optimizing resources, the benefits are transformative.

Enhanced collaboration and communication

By design, matrix organizations promote interaction across diverse teams, ensuring insights are shared and tapped from all quarters.

Resource allocation and utilization

With its dual focus, the matrix optimizes resource allocation, ensuring departments and projects have what they need when they need it.

Adaptability in a dynamic business environment

In an ever-shifting business landscape, a matrix organization's ability to recalibrate teams and focus quickly is invaluable.

Challenges in a matrix organization

Despite its merits, the matrix presents unique challenges. From potential role conflicts to decision-making bottlenecks, it's vital to be cognizant of these pitfalls.

Potential for role confusion

With dual reporting lines, employees might grapple with conflicting directives, necessitating clear communication channels.

Decision-making bottlenecks

Matrix structures, if not managed efficiently, can lead to delays in decision-making, given the multiple stakeholders involved.

Navigating power dynamics

The balance of power between functional and project managers can sometimes lead to turf wars, underscoring the need for defined roles and responsibilities.

Conclusion on matrix organizations

Choosing an organizational structure is paramount, with broad implications for operations, culture, and growth. As we’ve traversed the multifaceted realm of the matrix organization, the salient takeaway is its unique blend of adaptability and structure.

However, its success hinges on diligent implementation, continuous assessment, and fostering an ethos of collaboration. Businesses must introspect, evaluating their unique needs and challenges, to confirm if the matrix structure is their pathway to sustained growth and innovation.

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Matrix Organizational Structure: Balancing Complexity and Efficiency

Learn how the matrix organizational structure can help you balance complexity and efficiency in your company. Get insights on implementation and benefits.

matrix organization assignment

A traditional hierarchy structure in business is dead.

The rigid operation is slowing down businesses and not allowing for Agile management.

Enter the matrix organization structure. This structure provides many benefits to organizations working on cross-functional projects, including flexibility.

In this article, we'll explore the world of matrix organizational structures. We'll review their advantages and disadvantages and provide tips on managing employees.

Discover if a matrix organization structure fits your business.

What is a matrix organizational structure?

A  matrix organizational structure  is a combination of different organizational structures. It facilitates efficient collaboration and resource allocation in large-scale projects.

Unlike hierarchical management structures, the matrix structure emphasizes cross-functional teamwork.

In a matrix structure, project teams bring together individuals with diverse expertise. Individuals come from various fields when assembling a project team. Team members could be from engineering, finance, IT, and product management, for example.

These team members have dual chains of command:

  • They're accountable to both their functional managers (who oversee technical skills and development).
  • And the project manager (who supervises their contribution to the project).

The matrix structure supports the delivery of  goals and objectives . It allows for using specialized knowledge and facilitates communication. It also enables teams to adapt to changing project requirements.

It's important to note that the  matrix structure is project-based . Once a project finishes, teams move to new projects.

Benefits and disadvantages of a matrix structure

The benefits of a matrix organizational structure include the following:

  • Enhanced collaboration:  The matrix structure brings together individuals with different skill sets. It fosters collaboration and cross-functional communication skills.
  • Flexibility and adaptability:  It allows for adjustments because of its dynamic nature. This flexibility enables effective resource usage and adaptability to evolving market conditions.
  • Efficient resource allocation:  The matrix structure taps into a wider talent pool. It assigns resources based on importance, leading to improved efficiency and project outcomes.

The matrix structure also has some potential disadvantages, including:

  • Role confusion:  Role ambiguity due to various project leaders and managerial roles.
  • Conflict over priorities:  A matrix organization could lead to employees having competing priorities. Disputes can arise over resource allocation, conflicting deadlines, and differing objectives.

Who can use a matrix organizational structure?

A matrix suits businesses with complex projects where several departments need to collaborate.

‎Industries and businesses, like the ones below, often use a matrix structure:

  • Large construction projects  often involve various disciplines like architecture, engineering, and project management.
  • IT projects  need collaboration between developers, testers, designers, and business analysts. A matrix structure is beneficial for efficient resource allocation and coordination.
  • Healthcare organizations  need support for interdisciplinary teams, enabling everyone to work together.
  • Remote teams  need efficient communication, decision-making, and resource allocation across geographical boundaries.

How does the matrix structure affect employee behavior?

In a matrix structure, cross-functional collaboration and shared accountability shape employee behavior. This fosters collaboration, synergy, and diversity. Furthermore, employees share knowledge, solve problems, and drive innovation.

With dual reporting to managers, roles are clearer, and conflict resolution is quick. Employees learn to balance priorities, improve time management, and adapt.

To manage employee behavior in a matrix structure, it's essential to:

  • Establish open communication channels.
  • Foster a collaborative team culture.
  • Set shared goals and expectations.
  • Recognize and reward contributions across functions.

Matrix organizational structure implementation process

Implementing a matrix organizational structure involves several key steps. These ensure its successful adoption and integration within the organization.

Below, let’s dive into a quick guide for implementing the matrix structure:

1. Assess the need for a matrix structure

Before switching to a matrix structure, assess the needs of the organization. Consider project complexity, resource availability, and the need for cross-functional collaboration.

Also, check whether a matrix structure aligns with the organization's goals and culture. And, determine whether a matrix is the right fit. If so, proceed.

2. Identify roles and responsibilities

In a matrix structure, it's crucial to assign clear roles and responsibilities to the team.

Choose key positions based on expertise and align them with objectives. Correct alignment provides a streamlined workflow, clarity, and efficient collaboration.

You also encourage your team to take ownership of their roles and contribute to success.

3. Develop a communication plan

Effective communication lies at the heart of a successful matrix structure.

Develop a communication plan that outlines how information flows across teams and divisions.

Establish channels for regular updates, such as:

  • Team meetings
  • Progress reports
  • Shared document-sharing platforms

Ensure the team understands open communication and fosters a culture of collaboration.

Doing this enables effective decision-making, problem-solving, and team alignment. All of which are essential for this framework to succeed.

4. Allocate resources

Effective resource allocation promotes productivity, prevents bottlenecks, and maximizes resource use.

You must identify the necessary resources and distribute them among project teams.

Consider team members' expertise and availability to ensure the resources match specific tasks.

Track and adjust resource allocation as project needs evolve. With a flexible resource strategy, you can maintain productivity and drive success.

5. Provide training

Adequate training will ensure that your team fulfills their roles.

Offer ample training programs that address the specific needs of each team member. These programs can include technical training,  Agile management methodologies , and cross-functional collaboration skills.

Tailor training to accommodate different learning styles. Try to provide ongoing support and feedback for continuous development.

Encourage knowledge sharing and create opportunities for employees to learn from one another. A good idea is through mentorship programs or collaborative projects.

Investing in training empowers employees, enhances capabilities, and drives success in project execution.

6. Evaluate performance

Next, assess individual and team performance.

Establish clear performance metrics aligned with  project goals  and objectives. Then, conduct timely and constructive feedback sessions. Use them to recognize achievements, identify areas for improvement, and guide professional growth.

Be transparent and fair in evaluating and checking functional and project contributions.

Use performance evaluations as a basis for:

  • Recognizing and rewarding high performers
  • Addressing performance gaps
  • Making informed decisions about resource allocation and team composition

7. Identify potential challenges

Identifying potential challenges in a matrix organizational structure requires a proactive approach. Start by promoting open communication channels and encouraging feedback from team members. Listen to their concerns and observations to uncover any underlying issues.

Assess team dynamics, looking for conflict, role ambiguity, or power struggles. Track project progress and performance indicators to identify bottlenecks or resource constraints. Conduct reviews to gauge employee satisfaction, engagement, and project alignment.

Furthermore, keep an eye out for signs of:

  • Communication breakdown
  • Misalignment of goals
  • Insufficient collaboration

When to choose a different organizational structure?

The matrix structure offers several advantages in the right circumstances. But, there are times when opting for a different approach may be more appropriate.

If the project is small and straightforward, a simpler structure will suffice. A matrix structure thrives in complex projects that need cross-functional collaboration. Simple structures are functional and divisional.

A lack of collaboration across teams indicates the need for a different structure. They need clear boundaries and minimal requirements for interdepartmental coordination.

The need to deploy and share specialized expertise is a great reason to use matrix. The experts train and grow in a function, but deploy where needed for special projects. If those resources are in high demand, the matrix assignments need to be agile rather than fixed.

Limited resources can pose challenges in any organization, no matter the structure. A matrix that’s nimble may work better than a project-based or team-based structure.

Project-based or team-based structures may work better when the skill mix is stable. They may also work best when the project types are repeatable.

Finally, the organization's culture and management style play a crucial role. The matrix may not be the best choice in some circumstances. For example, if the culture doesn’t support shared accountability and open communication.

Three matrix organizational structure types

When implementing a matrix organizational structure, there are three primary types to consider. Each type has its own purpose, pros, and cons.

Strong matrix organizational structure

In a strong matrix structure, project managers have considerable authority and power. They’re responsible for the following:

  • Making decisions
  • Allocating resources
  • Overseeing the management of the project

Functional managers play a supporting role, providing expertise and guidance.

‎This structure works well for complex projects with tight deadlines. It requires a high level of collaboration between functional teams.

Construction, aerospace, and defense industries often use a strong matrix structure. Yet it can lead to power struggles and conflicts over authority.

Balanced matrix organizational structure

The balanced matrix structure strikes a balance between project managers and functional managers. Both parties share power and authority, and decision-making is a collaborative effort.

‎This structure emphasizes cooperation, teamwork, and effective communication. It allows for flexibility and efficient resource allocation.

IT companies, software development, and research organizations often use this approach. Clear communication channels prevent role confusion and conflicts.

Weak matrix organizational structure

In a weak matrix structure, functional managers retain authority. Project managers act more as coordinators, overseeing project progress and facilitating collaboration.

‎This structure provides a clear reporting line and stability within functional departments.

Marketing campaigns, product launches, and small-scale events usually adopt a weak matrix structure. However, it may result in inefficient resource allocation and slower decision-making processes.

How Motion can help run a matrix organization

Applying a matrix organizational structure requires effective tools and strategies. Motion is a powerful productivity platform offering useful features for running a matrix.

Motion's intelligent scheduling enables teams to navigate the complexity of a matrix structure.

It can plan your team's day based on variables such as:

  • Resource availability
  • Dependencies
  • Task priority

This capability helps matrixed teams stay on track and meet project milestones.

Coordinating meetings across time zones can be a major challenge with any structure. Motion simplifies this by providing features like time zone conversion and availability tracking. With Motion, teams can  schedule meetings  that accommodate participants from various locations.

Its collaboration tools facilitate seamless communication and information sharing. Shared task lists, file sharing, and real-time update features keep everyone connected.

‎By leveraging Motion's capabilities, businesses can enhance productivity, streamline communication, and manage teams.

Key takeaways and next steps

A matrix organizational structure can offer several benefits to business and project managers. These include greater flexibility, enhanced communication and collaboration, and improved resource allocation.

But a matrix organization might find challenges, too. For example, role confusion, power struggles, and higher administration costs.

The nature of your business should guide your choices about organizational structure.

Following the steps described is essential if you choose a matrix structure.

It's important to recognize that no organizational structure is bulletproof. Regardless of your organizational structure, Motion can help you carry it out.

Sign up for Motion for a free  7-day trial .

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matrix organization assignment

Revisiting the matrix organization

Matrix organizations have been around for decades, stimulating vigorous debate between supporters and detractors for nearly as long. 1 1. For a classic critique, see Tom Peters, “ Beyond the matrix organization ,” McKinsey Quarterly , September 1979. They remain prevalent at the large number of companies that need to bring functional centers of excellence together with business-specific people and processes. Eighty-four percent of respondents to a recent Gallup survey, for example, were at least slightly matrixed.

About the research

The findings of the study on matrixed employees are based on a Gallup panel web survey, completed by 3,956 full-time employees aged 18 and older, that was administered between April 8 and April 27, 2015. The Gallup panel is a probability-based longitudinal group of US adults selected through random-digit-dial (RDD) phone interviews over landlines and cell phones. Address-based sampling methods are also used to recruit panel members. The Gallup panel is not an opt-in panel, and members are not given incentives for participating.

Our sample for this study, which used Current Population Survey figures, was weighted to be demographically representative of the US adult population. For results based on this sample, the maximum margin of sampling error is plus or minus two percentage points at the 95 percent confidence level. Margins of error are higher for subsamples. In addition to sampling error, the wording of questions and practical difficulties in conducting surveys can introduce error and bias into the findings of public-opinion polls. The survey responses were matched with those of a US workforce panel survey administered in November 2014 to study the engagement and other work-related factors of matrixed employees. Separately, Gallup’s meta-analysis of the relationship between employee engagement and business outcomes included more than 49,000 business units across 49 industries.

The results of the organizational studies are based on subsets of McKinsey’s global database for the Organizational Health Index (OHI). This index is a survey-based assessment of organizational health, defined as the ability to perform over the long term. That kind of performance is based on three capabilities: aligning around strategies, executing them, and adapting when necessary. 1 1. Organizational health is operationally defined by scores on nine organizational outcomes: direction, leadership, culture and climate, accountability, capabilities, coordination and control, innovation and learning, motivation, and external orientation. Unlike employee engagement, they are assessed by survey questions about the organization’s effectiveness in these areas rather than their impact on employees. The index includes data from more than two million respondents and over 2,000 unique surveys. Organizations in the top quartile for health collectively outpace organizations in the bottom quartile in total returns to shareholders (TRS): they earned three times the annual TRS of bottom-quartile organizations over the nine-year period of the study. 2 2. See Aaron De Smet, Bill Schaninger, and Matthew Smith, “ The hidden value of organizational health—and how to capture it ,” McKinsey Quarterly , April 2014.

The study focusing on the accountability practices of organizations was conducted using data from 254 unique companies and 781,224 respondents, collected in 2014 and 2015. This study determined the rank order of practices structurally related to organizational-health outcomes. The order of the practices was based on the magnitude and significance of the standardized betas produced by regressing the outcome on the direct practices. To determine the rank order of the related practices, we first regressed the outcome on the direct practices and then (using a stepwise regression) entered the remaining practices. Practices that explained a minimum incremental 1 percent of the variance were labeled related practices. Their rank order (like our treatment of direct practices) was based on the incremental amount of variance explained.

That survey, covering nearly 4,000 workers in the United States, highlights some benefits for employees in matrices, particularly in areas related to collaboration. At the same time, the survey suggests that these employees feel less clear about what’s expected of them than their nonmatrixed counterparts do. This problem has consequences: Gallup research indicates that clarity of expectations is a foundation for building an engaged workplace that performs at high levels. Furthermore, according to McKinsey’s Organizational Health Index (OHI), clear and accountable roles are among the most important drivers of organizational health. Taken together, the Gallup and McKinsey findings underscore how important it is for executives and line managers to address the role ambiguity that’s all too common in matrix organizations. (For more on the research behind these two studies, see sidebar, “About the research.”)

Ubiquitous and unexceptional

Eighty-four percent of the US employees Gallup surveyed were matrixed to some extent. Forty-nine percent served on multiple teams some days (we categorized them as slightly matrixed), and 18 percent served on multiple teams every workday but with different people, though mostly reporting to the same manager (matrixed). The remaining 17 percent reported to different managers in their work with different teams (supermatrixed).

Most employees in matrixed organizations, according to the survey, aren’t terribly engaged with their jobs. (Gallup defines employee engagement as involvement in and enthusiasm for work.) These figures are consistent with what Gallup has found in the workplace at large over a decade of study. They are alarming, given the relationship between worker engagement and vital business outcomes, such as productivity, profitability, and customer perceptions of service quality. 2 2. James K. Harter et al., The relationship between engagement at work and organizational outcomes , Gallup, February 2013, gallup.com. The survey does suggest a modestly positive relationship between the four categories of organization and employee engagement, which rises slightly across them (exhibit).

Collaboration and clarity

Beneath the surface, we found some areas (particularly collaboration) where matrixed organizations performed better than less matrixed ones and others (related to role clarity) where they did worse. The differences in engagement at more and less matrixed organizations suggest advantages and disadvantages that may cancel one another out.

A key area of strength for matrixed organizations lies in collaboration—a heartening discovery, since cross-company teamwork is one of the chief aims of many matrices. We asked employees of slightly matrixed, matrixed, and supermatrixed organizations about the benefits of being on different teams. Supermatrixed employees were generally about twice as likely as slightly matrixed ones to say that their organizations not only helped them collaborate more effectively with coworkers, do their best work, and serve customers well but also stimulated bottom-up innovation. Supermatrixed employees were also somewhat more likely than those in the other categories to say they had received recognition or praise during the past seven days, that their opinions counted, and that their fellow employees were committed to doing quality work. These are key elements in the overall engagement of employees and suggest that relationships and collaboration among employees in matrixed organizations and their peers and superiors really are better.

On the other hand, only a minority of the supermatrixed employees strongly agreed with the statement, “I know what is expected of me at work,” compared with 60 percent of the nonmatrixed. This reflects a common complaint about matrixed organizations—that the structure gives rise to a lack of clarity about responsibilities, expectations, and who reports to whom. Workers in the three matrixed groups were more likely than nonmatrixed ones to say that they need clear direction from project leaders and communication between their managers and project leaders to prioritize their work most effectively.

Also, employees in the matrixed categories were more likely than their nonmatrixed counterparts to say they spent their days responding to coworkers’ requests and attending internal meetings. Such responses are not surprising in an environment where employees receive instructions and feedback from multiple managers and work with a range of people to complete projects. These are also probably factors in the critics’ assertions that the matrix structure can slow decision making, blur lines of communication, stifle productivity, and hinder organizational responsiveness and agility. 3 3. For more, see Billie Nordmeyer, “Disadvantages of organizations with the matrix approach,” Houston Chronicle , chron.com; and Eric Krell, “Managing the matrix,” HR Magazine , Society for Human Resource Management, April 1, 2011, shrm.org.

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The link to organizational health.

Interestingly, role clarity and related accountability practices emerge as among the most important drivers of organizational health, and ultimately performance, in McKinsey research based on the Organizational Health Index (OHI). McKinsey has consistently found that improving role clarity improves accountability, an outcome that is a critical component of the overall health-index score. In fact, organizations with high accountability scores have a 76 percent probability of achieving top-quartile organizational health—more than triple the expected rate. What’s more, the independent effects of role clarity are so powerful that they affect OHI scores directly, one of only four management practices (among 37) that do. 4 4. Since the impact of these practices transcends geography, industry sector, and company size, we call them power practices. Besides role clarity, personal ownership (another accountability practice), strategic clarity, and competitive insights are also in this select group. Overall, we assessed the 37 management practices through empirically derived survey items that were independent of the outcomes they predicted. We assessed the independent effect of role clarity after statistically controlling for shared or overlapping effects among the 37 practices.

These findings are consistent with work by McKinsey’s Suzanne Heywood and others showing that organizations can mitigate the complexity associated with matrices through clear accountability and targets for individuals. 5 5. See Suzanne Heywood, Jessica Spungin, and David Turnbull, “Cracking the complexity code,” McKinsey Quarterly , 2007 Number 2; and Suzanne Heywood and Julian Birkinshaw, “ Putting organizational complexity in its place ,” McKinsey Quarterly , May 2010. Further reinforcing these findings is the academic literature suggesting that higher levels of the ownership mentality predict higher levels of collaboration, organizational commitment, and corporate citizenship, as well as reduced levels of behavior that deviate from workplace norms. 6 6. James B. Avey, Bruce J. Avolio, Craig D. Crossley, and Fred Luthans, “Psychological ownership: Theoretical extensions, measurement, and relation to work outcomes,” Journal of Organizational Behavior , 2009, Volume 30, Number 2, pp. 173–91; doi 10.1002/job.583.

The Gallup survey does suggest that role clarity takes a hit in matrixed organizations. Yet it also indicates that super-matrixed employees were more likely to have received recognition or praise in the previous seven days and to believe that their opinions counted. McKinsey research suggests that these features of the employee experience in matrixed companies have a positive impact on organizational health: two management practices—recognition and employee involvement in direction setting—are important drivers of two of the OHI’s outcomes—motivation and direction—which, along with accountability, are meaningful components of the overall OHI score.

Priorities for matrixed managers

Given the importance of role clarity and accountability to organizational health and, ultimately, performance, addressing the role ambiguity that pervades matrixed companies is a critical priority for their leaders, who should help employees by continually setting clear expectations aligned with the direction of the business. This clarity should cascade into frequent conversations between managers and their direct reports about the specific role each person plays in advancing the company’s objectives. Consultative (as opposed to authoritarian) leadership practices can contribute meaningfully to accountability, according to McKinsey’s OHI research.

It is also imperative to maintain day-to-day lines of communication to root out and dispel ambiguity and ensure that everyone is consistently on the same page. This is true at the organizational as well as the team level: Gallup research shows that managers should not save critical conversations for once-a-year performance reviews—engagement flourishes when employees receive regular, actionable feedback on their progress.

Read our latest thinking on matrix organizations

Last, the matrix structure is notorious for frequently obscuring lines of accountability, so leaders and managers should ensure that all employees understand whom they answer to and the duties for which they are responsible. The importance of regular discussions to reclarify expectations as work demands change is compounded in matrix organizations. And highly engaged employees thrive in a system where everyone is accountable for his or her work.

Michael Bazigos, head of organizational science at McKinsey, is based in McKinsey’s New York office. Jim Harter is the chief scientist of workplace management and well-being for Gallup’s Workplace Management Practice in Omaha, Nebraska.

The authors wish to thank Gallup’s Sangeeta Agrawal, Annamarie Mann, and Susan Sorenson, as well as McKinsey’s Lili Duan, Dominik Deja, Dinora Fitzgerald, and Yuan Tian, for their contributions to this article.

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6 Advantages and Disadvantages of a Matrix Organizational Structure

matrix organization assignment

BY ChartHop

matrix organization assignment

It’s easy to dismiss your company’s organizational structure as something that just “falls into place,” but getting it right can positively impact your operations and your people. 

For example, a strong organizational structure provides clarity around roles and responsibilities, promotes collaboration, and equips employees with a sense of security about where they fit in the big picture. As a result, finding the right organizational structure for your needs requires significant attention.

While there’s no shortage of structure options, a matrix organizational structure offers companies an alternative to the traditional top-down hierarchy. 

What is a Matrix Organizational Structure?

A matrix organizational structure is a cross-team effort to bring different roles together and create a grid-like reporting structure instead of a traditional hierarchy. This approach represents how work actually gets done, since the day-to-day of employees is rarely limited to interaction only within their functional group (e.g. Marketing, Sales, Finance).

Notably, a matrix organizational structure requires a different management style, with both functional and divisional management.

A functional manager represents the traditional vertical structure based on department or job function. Examples of this role are marketing managers, sales managers, and human resource managers.

A divisional manager , on the other hand, oversees a cross-functional team with representatives from each department. In this structure, a marketing specialist reports to their functional marketing manager as well as their divisional manager. Divisions may be based on business unit, geography, project, or anything else.

example of a matrix structure organization

A basic matrix structure with functional and divisional managers. [ Source ]

What is an example of a matrix structure organization? At the simplest level, an example of an organization using a matrix structure would be one that has set functional teams (e.g. Marketing, Sales, Customer Success) as well as more divisional teams with members from different functional areas that work together on specific initiatives. Nike is one famous example of a matrix structure organization , as the company has functional teams like HR and Merchandising as well as divisional teams based on both product and geographic region.

What are the pros and cons of a matrix structure? Matrix organizational structures offer companies and their employees tangible advantages to the way they work, such as shared knowledge, more informed decisions, and better morale. However, a matrix structure also has some disadvantages to be aware of, like lack of clarity, potential conflict, and slower processes.

3 Advantages of a Matrix Organizational Structure

You may be a startup seeking the best organizational structure for your new company. Or your business may have just completed an acquisition and you’re redesigning your systems and structures. Or maybe you find your traditional organizational model isn’t meeting your needs. 

No matter your size or current situation, a matrix organizational structure offers countless advantages that can benefit your teams’ daily work. 

1. Flexibility Between Departments Results in Shared Knowledge 

Matrix organizations excel at bringing together the right people with the right skills. Think of it as the business version of the 1992 Dream Team : Experts from every functional area of a company come together to address a specific challenge, project, or goal.

Because you bring together a group of people to tackle a specific project, assignments are never permanent . This kind of flexibility results in:

  • Employee Skill Development: In the matrix structure, employees can move between projects or teams as needed. Doing so allows them to share their knowledge, expertise, and skills with a larger number of people than in traditional structures. Therefore, people are always learning new skills and considering different viewpoints, leading to continuous employee development and better results. 
  • Alignment Across Departments: You will reinforce alignment across departments with employees moving in and out of project teams. What’s more, your people will share their experiences within the company, and any potential misalignment will surface quickly.
  • Integration of HR and DEIB: Your People and DEIB teams should be at the figurative table for all large decisions, but sometimes that doesn’t happen. A matrix organizational structure prioritizes having the right stakeholders working on each project, including at least one employee with expertise in diversity, equity, inclusion, and belonging. Having all of these viewpoints at the table leads to a stronger end result and helps maintain company values . 

Consider the following examples of matrix structure organizations that put this shared knowledge to work. Starbucks focuses their teams geographically to understand and meet the needs of customers in different regions around the world, while other businesses organize their teams by specific strategic goals , such as improving the customer experience or driving business growth. 

Then there’s Spotify, who dubbed their own version of the matrix structure “ The Spotify Model .” As shown below, Tribes – made up of specialists and those passionate about a specific goal – team up to focus on a project. This structure gives their teams more autonomy in how they work and removes the barriers of formal processes. By doing so, Spotify believes its teams can work faster and better deliver on product and service-oriented goals.   

Discover the Spotify org structure model

Project and functional elements of the Spotify model, an agile approach to a matrix organizational structure.

2. Open Communication Leads to Better-Informed Decisions

In a traditional functional structure, communication flows from the top-down. Oftentimes, these communications stay within their own department. It works, but different perspectives, stakeholders, or skill sets may be missing from the equation.

Alternatively, the cross-functional nature of matrix teams means leaders and teammates can more freely share what they know since everyone has to communicate with both functional teams and divisional teams. Having all of these perspectives allows leaders to make more informed decisions . 

Consider the example of Sean, a customer success representative, who is on a project team tasked with identifying and correcting bugs within his company’s software. Sean reports to – and shares information with – both the project manager and the VP of Customer Success. Let’s say Sean shares details about this specific project with the VP of Customer Success, who then uses that information to develop a communication strategy for all customer success representatives to more easily share important information about bug fixes with customers. In this instance, the matrix model better positions the company for success by including wrap-around services and support to the project at hand.

3. Cross-Collaboration Boosts Employee Engagement and Morale

In a matrix organizational structure, employees move between projects or teams as needed. This naturally leads to your people sharing knowledge, expertise, and skills. Besides aligning departments, this cross-collaboration results in:

  • Higher Employee Engagement: Employee engagement leads to a slew of benefits , such as increased productivity and decreased turnover. And with a potential 32.6 million Americans working remotely by 2025 , it’s important to create a culture that promotes teamwork and cross-functionality so people feel connected, no matter where they’re located. 
  • Consistent Employee Growth: When your people habitually switch teams, they are not only exposed to new areas of expertise, but also consistently create new working relationships. These soft skills are important; in fact, 73% of business leaders believe they’re more important than job-specific skills. 
  • Increased Team Performance and Profitability: A team of people with different areas of expertise and perspectives sets your project up for success. Furthermore, it helps employees feel valued for their knowledge and skills, and when that happens they’re more likely to feel connected and perform better, leading to a 21% increase in profitability . 

3 Disadvantages of a Matrix Organizational Structure 

Of course a matrix organizational structure is not without its challenges (warning: they all involve the role of the manager). Companies that recognize these challenges upfront and plan to address them can help minimize the negative impact.

1. Overlapping Teams = Lack of Clarity Around Roles and Responsibilities

A complex reporting structure can cause confusion around roles and responsibilities. For example, managers may go back and forth on who is responsible for the professional development of individual employees.

Team members can also experience confusion. While moving to new teams may offer employees exciting challenges to tackle, this shift also presents a new set of work dynamics, such as workload distribution, task ownership, and knowledge sharing. Pair that with an employee’s commitment to their functional department, and it’s easy to see how employees may exist in a near-constant state of stress when it comes to their primary responsibilities .

Thus, clear roles and responsibilities are crucial. McKinsey’s Organizational Health Index argues that clear, accountable roles are a top driver of overall organizational health. High role clarity is also linked to greater performance, engagement, and satisfaction .

Never fear – companies can navigate role complexity and ambiguity by establishing clear accountability. For example, org chart software allows leadership and employees alike to visualize their reporting structure. Moreover, the right platform can even deliver drill-down capabilities that allow employees to view manager or team member profiles, which include their title, skill sets, and responsibilities.

an org chart with employee profiles helps people stay connected

ChartHop’s org chart takes you directly to employee’s profile pages, giving greater visibility into your team’s makeup and structure. 

2. Multiple Managers = Potential Conflict 

Functional and project managers are bound to have conflicting goals or priorities, and that conflict trickles down to team dynamics.

A regional sales manager, for example, might have very clear sales growth goals for an upcoming quarter. However, a project manager might not prioritize those goals in their team’s current project. As they engage in discussions over where to direct efforts, the team is left in limbo, unable to move forward until a resolution is reached. 

Conflict can also arise through challenges for authority and deciding which manager has the final say on a decision. Say a project team built a new software feature or a customer engagement campaign. Which manager has final say on the execution? The project manager might view it as one of their responsibilities, but maybe the director of product or a customer success manager believes the decision is theirs.

In order to mitigate this potential issue and effectively support your organization’s goals, your managers must strike a balance. One way to do so is by implementing training and education programs to ensure managers receive the tools and knowledge to navigate the complexities of a matrix structure.

For example, AGCO , an agricultural machinery company, supports its matrix structure by offering specialized training that emphasizes communication between managers. Additionally, all managers take a course on the complexities of the matrix structure. This training covers required management and leadership skills to help coordinate decision-making processes and develop problem solving skills.

Ultimately, if you choose to use a matrix structure, you should establish expectations and clear manager roles to reduce any conflict among people and teams. 

3. More Information = Slower Decision-Making 

Too many cooks in the kitchen can result in slower decision-making. This is because multiple managers weighing in on a task or issue can mean a longer time to resolution or execution, especially if your managers disagree on the best course of action.

As mentioned above, the lack of clarity regarding authority, or overlapping authority, can delay decision-making efforts . While managers may go back and forth over a desire to own the decision, it’s also likely managers do not wish to own a decision for fear of potential fallout. Either would delay execution.

Additionally, the complex nature of a matrix organization means it might take longer for teams to reach consensus regarding next steps. With information moving freely between teams, it can be difficult to ensure everyone is on the same page about the current state of a project.

You can prevent these kinds of roadblocks by adopting clear decision-making processes and frameworks . When managers and teams are on the same page about how to approach a decision, the team can move from the decision to implementation phase at a faster pace. Establishing who owns the final decision or the decision-making process before the work begins can save the team from major delays toward the end of their work or project.

Is a Matrix Organizational Structure Right For You?

Matrix organizational structures have taken a backseat to other approaches in the last decade. Yet, as more companies adopt distributed workforce practices, collaborative, transparent, and flexible structures will play a key role in success.

Knowing that a matrix structure’s flexibility supports agile teams, promotes engagement, and values cross-collaboration, it’s time to decide if your organization needs improvement in these areas. If so, transitioning to a matrix structure may be a strong move in the right direction.

Interested in other changes your People team can make to help your organization thrive? Our webinar dives into a first-hand look at advice from People leaders.

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Understanding Organizational Structures

Organizational structure aligns and relates parts of an organization, so it can achieve its maximum performance. The structure chosen affects an organization's success in carrying out its strategy and objectives. Leadership should understand the characteristics, benefits and limitations of various organizational structures to assist in this strategic alignment.

Overview Background Business Case Key Elements of Organizational Structures Types of Organizational Structures

Vertical structures (functional and divisional)

Matrix organizational structures, open boundary structures (hollow, modular virtual and learning).

The Impact of Growth Stages on Organizational Structure Metrics Communications and Technology Global Issues Legal Issues

This article addresses the following topics related to organizational structure:

  • The case for aligning organizational structure with the enterprise's business strategy.
  • Key elements of organizational structure.
  • Types of organizational structures and the possible benefits and limitations of each.
  • The impact of an organization's stage of development on its structure.
  • Communications, technology, metrics, global and legal issues.

Organizational structure is the method by which work flows through an organization. It allows groups to work together within their individual functions to manage tasks. Traditional organizational structures tend to be more formalized—with employees grouped by function (such as finance or operations), region or product line. Less traditional structures are more loosely woven and flexible, with the ability to respond quickly to changing business environments.

Organizational structures have evolved since the 1800s. In the Industrial Revolution, individuals were organized to add parts to the manufacture of the product moving down the assembly line. Frederick Taylor's scientific management theory optimized the way tasks were performed, so workers performed only one task in the most efficient way. In the 20th century, General Motors pioneered a revolutionary organizational design in which each major division made its own cars.

Today, organizational structures are changing swiftly—from virtual organizations to other flexible structures. As companies continue to evolve and increase their global presence, future organizations may embody a fluid, free-forming organization, member ownership and an entrepreneurial approach among all members. See  Inside Day 1: How Amazon Uses Agile Team Structures and Adaptive Practices to Innovate on Behalf of Customers .

Business Case

A hallmark of a well-aligned organization is its ability to adapt and realign as needed. To ensure long-term viability, an organization must adjust its structure to fit new economic realities without diminishing core capabilities and competitive differentiation. Organizational realignment involves closing the structural gaps impeding organizational performance.

Problems created by a misaligned organizational structure

Rapid reorganization of business units, divisions or functions can lead to ineffective, misaligned organizational structures that do not support the business. Poorly conceived reorganizations may create significant problems, including the following:

  • Structural gaps in roles, work processes, accountabilities and critical information flows can occur when companies eliminate middle management levels without eliminating the work, forcing employees to take on additional responsibilities.
  • Diminished capacity, capability and agility issues can arise when a) lower-level employees who step in when middle management is eliminated are ill-equipped to perform the required duties and b) when higher-level executives must take on more tactical responsibilities, minimizing the value of their leadership skills.
  • Disorganization and improper staffing can affect a company's cost structure, cash flow and ability to deliver goods or services. Agile organizations can rapidly deploy people to address shifting business needs. With resources cut to the bone, however, most organizations' staff members can focus only on their immediate responsibilities, leaving little time, energy or desire to work outside their current job scope. Ultimately, diminished capacity and lagging response times affect an organization's ability to remain competitive.
  • Declining workforce engagement can reduce retention, decrease customer loyalty and limit organizational performance and stakeholder value.

The importance of aligning the structure with the business strategy

The key to profitable performance is the extent to which four business elements are aligned:

Leadership. The individuals responsible for developing and deploying the strategy and monitoring results.

Organization. The structure, processes and operations by which the strategy is deployed.

Jobs. The necessary roles and responsibilities.

People. The experience, skills and competencies needed to execute the strategy.

An understanding of the interdependencies of these business elements and the need for them to adapt to change quickly and strategically are essential for success in the high-performance organization. When these four elements are in sync, outstanding performance is more likely.

Achieving alignment and sustaining organizational capacity requires time and critical thinking. Organizations must identify outcomes the new structure or process is intended to produce. This typically requires recalibrating the following:

  • Which work is mission-critical, can be scaled back or should be eliminated.
  • Existing role requirements, while identifying necessary new or modified roles.
  • Key metrics and accountabilities.
  • Critical information flows.
  • Decision-making authority by organization level.

See  Meeting the Challenges of Developing Collaborative Teams for Future Success.

Key Elements of Organizational Structures

Five elements create an organizational structure: job design, departmentation, delegation, span of control and chain of command. These elements comprise an organizational chart and create the organizational structure itself. "Departmentation" refers to the way an organization structures its jobs to coordinate work. "Span of control" means the number of individuals who report to a manager. "Chain of command" refers to a line of authority.

The company's strategy of managerial centralization or decentralization also influences organizational structures. "Centralization," the degree to which decision-making authority is restricted to higher levels of management, typically leads to a pyramid structure. Centralization is generally recommended when conflicting goals and strategies among operating units create a need for a uniform policy. "Decentralization," the degree to which lower levels of the hierarchy have decision-making authority, typically leads to a leaner, flatter organization. Decentralization is recommended when conflicting strategies, uncertainty or complexity require local adaptability and decision-making.

Types of Organizational Structures

Organizational structures have evolved from rigid, vertically integrated, hierarchical, autocratic structures to relatively boundary-less, empowered, networked organizations designed to respond quickly to customer needs with customized products and services.

Today, organizations are usually structured vertically, vertically and horizontally, or with open boundaries. Specific types of structures within each of these categories are the following:

  • Vertical — functional and divisional.
  • Vertical and horizontal — matrix.
  • Boundary-less (also referred to as "open boundary")—modular, virtual and cellular.

See  What are commonly-used organization structures?

Two main types of vertical structure exist, functional and divisional. The functional structure divides work and employees by specialization. It is a hierarchical, usually vertically integrated, structure. It emphasizes standardization in organization and processes for specialized employees in relatively narrow jobs.

This traditional type of organization forms departments such as production, sales, research and development, accounting, HR, and marketing. Each department has a separate function and specializes in that area. For example, all HR professionals are part of the same function and report to a senior leader of HR. The same reporting process would be true for other functions, such as finance or operations.

In functional structures, employees report directly to managers within their functional areas who in turn report to a chief officer of the organization. Management from above must centrally coordinate the specialized departments. 

A functional organizational chart might look something like this: 

A functional organizational structure chart with the president at the top and then one line below showing different departments

Advantages of a functional structure include the following:

  • The organization develops experts in its respective areas.
  • Individuals perform only tasks in which they are most proficient.
  • This form is logical and easy to understand.

Disadvantages center on coordination or lack thereof:

  • People are in specialized "silos" and often fail to coordinate or communicate with other departments.
  • Cross-functional activity is more difficult to promote.
  • The structure tends to be resistant to change.

This structure works best for organizations that remain centralized (i.e., a majority of the decision-making occurs at higher levels of the organization) because there are few shared concerns or objectives between functional areas (e.g., marketing, production, purchasing, IT). Given the centralized decision-making, the organization can take advantage of economies of scale in that there are likely centralized purchasing functions.

An appropriate management system to coordinate the departments is essential. The management system may be a special leader, like a vice president, a computer system or some other format.

Also a vertical arrangement, a divisional structure most often divides work and employees by output, although a divisional structure could be divided by another variable such as market or region. For example, a business that sells men's, women's and children's clothing through retail, e-commerce and catalog sales in the Northeast, Southeast and Southwest could be using a divisional structure in one of three ways:

  • Product—men's wear, women's wear and children's clothing.
  • Market—retail store, e-commerce and catalog.
  • Region—Northeast, Southeast and Southwest.

A divisional organizational structure might look like this:

A divisional organizational structure with the president at the top and product divisions below followed by departments

The advantages of this type of structure are the following:

  • It provides more focus and flexibility on each division's core competency.
  • It allows the divisions to focus on producing specialized products while also using knowledge gained from related divisions.
  • It allows for more coordination than the functional structure.
  • Decision-making authority pushed to lower levels of the organization enables faster, customized decisions.

The disadvantages of this structure include the following:

  • It can result in a loss of efficiency and a duplication of effort because each division needs to acquire the same resources.
  • Each division often has its own research and development, marketing, and other units that could otherwise be helping each other.
  • Employees with similar technical career paths have less interaction.
  • Divisions may be competing for the same customers.
  • Each division often buys similar supplies in smaller quantities and may pay more per item.

This type of structure is helpful when the product base expands in quantity or complexity. But when competition among divisions becomes significant, the organization is not adapting quickly enough, or when economies of scale are lacking, the organization may require a more sophisticated matrix structure.

A matrix structure combines the functional and divisional structures to create a dual-command situation. In a matrix structure, an employee reports to two managers who are jointly responsible for the employee's performance. Typically, one manager works in an administrative function, such as finance, HR, information technology, sales or marketing, and the other works in a business unit related to a product, service, customer or geography.

A typical matrix organizational structure might look like this:

A matrix organizational chart with the president at the top, and departments listed below and product managers on the left axis

Advantages of the matrix structure include the following:

  • It creates a functional and divisional partnership and focuses on the work more than on the people.
  • It minimizes costs by sharing key people.
  • It creates a better balance between time of completion and cost.
  • It provides a better overview of a product that is manufactured in several areas or sold by various subsidiaries in different markets.

Disadvantages of matrix organizations include the following:

  • Responsibilities may be unclear, thus complicating governance and control.
  • Reporting to more than one manager at a time can be confusing for the employee and supervisors.
  • The dual chain of command requires cooperation between two direct supervisors to determine an employee's work priorities, work assignments and performance standards.
  • When the function leader and the product leader make conflicting demands on the employee, the employee's stress level increases, and performance may decrease.
  • Employees spend more time in meetings and coordinating with other employees.

These disadvantages can be exacerbated if the matrix goes beyond two-dimensional (e.g., employees report to two managers) to multidimensional (e.g., employees report to three or more managers).

Matrix structures are common in heavily project-driven organizations, such as construction companies. These structures have grown out of project structures in which employees from different functions formed teams until completing a project, and then reverted to their own functions. In a matrix organization, each project manager reports directly to the vice president and the general manager. Each project is, in essence, a mini profit center, and therefore, general managers usually make business decisions.

The matrix-structured organization also provides greater visibility, stronger governance and more control in large, complex companies. It is also well suited for development of business areas and coordination of complex processes with strong dependencies.

Matrix structures pose difficult challenges for professionals charged with ensuring equity and fairness across the organization. Managers working in matrix structures should be prepared to intervene via communication and training if the structure compromises these objectives. Furthermore, leadership should monitor relationships between managers who share direct reports. These relationships between an employee's managers are crucial to the success of a matrix structure.

More recent trends in structural forms remove the traditional boundaries of an organization. Typical internal and external barriers and organizational boxes are eliminated, and all organizational units are effectively and flexibly connected. Teams replace departments, and the organization and suppliers work as closely together as parts of one company. The hierarchy is flat; status and rank are minimal. Everyone—including top management, managers and employees—participates in the decision-making process. The use of 360-degree feedback performance appraisals is common as well.

Advantages of boundary-less organizations include the following:

  • Ability to leverage all employees' talents.
  • Faster response to market changes.
  • Enhanced cooperation and information sharing among functions, divisions and staff.

Disadvantages include the following:

  • Difficulty in overcoming silos inside the organization.
  • Lack of strong leadership and common vision.
  • Time-consuming processes.
  • The possibility of employees being adversely affected by efficiency efforts.
  • The possibility of organizations abandoning change if restructuring does not improve effectiveness quickly.

Boundary-less organizational structures can be created in varied forms, including hollow, modular and virtual organizations.

Hollow organizations. Hollow structures divide work and employees by core and noncore competencies. Hollow structures are an outsourcing model in which the organization maintains its core processes internally but outsources noncore processes. Hollow structures are most effective when the industry is price competitive and choices for outsourcing exist. An example of a hollow structure is a sports organization that has its HR functions (e.g., payroll and benefits) handled by outside organizations.

Advantages of this type of structure include the following:

  • Minimizing overhead.
  • Enabling the organization to focus on its core product and eliminating the need to develop expertise in noncore functions.

Disadvantages include:

  • Loss of control over functions that affect employees regularly.
  • Restriction by certain industries (e.g., health care) on the extent of outsourcing.
  • Lack of competitive outsourcing options.

Modular organizations. Modular structures differ from hollow organizations in that components of a product are outsourced. Modular structures may keep a core part of the product in-house and outsource noncore portions of the product. Networks are added or subtracted as needs change. For a modular structure to be an option, the product must be able to be broken into chunks. For example, computer manufacturer Dell buys parts from various suppliers and assembles them at one central location. Suppliers at one end and customers at the other become part of the organization; the organization shares information and innovations with all. Customization of products and services results from flexibility, creativity, teamwork and responsiveness. Business decisions are made at corporate, divisional, project and individual team member levels.

Advantages include the following:

  • Minimizing the specialization and specialists needed.
  • Enabling the company to outsource parts supply and coordinate the assembly of quality products.

Disadvantages include concerns about the actions of suppliers outside the control of the core management company. Risk occurs if the partner organization removes itself form the quality check on the end product or if the outsourced organization uses a second outsourced organization. Examples of supplier concerns include the following:

  • Suppliers, or subcontractors, must have access to—and safeguard—most, if not all, of the core company's data and trade secrets.
  • Suppliers could suddenly raise prices on or cease production of key parts.
  • Knowing where one organization ends and another begins may become difficult.

Virtual organizations. A virtual organization (sometimes called a network structure) is cooperation among companies, institutions or individuals delivering a product or service under a common business understanding. Organizations form partnerships with others—often competitors—that complement each other. The collaborating units present themselves as a unified organization.

The advantages of virtual structures include the following:

  • Contributions from each part of the unit.
  • Elimination of physical boundaries.
  • Responsiveness to a rapidly changing environment.
  • Lower or nonexistent organizational overhead.
  • Allows companies to be more flexible and agile.
  • Give more power to all employees to collaborate, take initiative, and make decisions.
  • Helps employees and stakeholders understand workflows and processes.

The disadvantages of virtual organizations include the following:

  • Potential lack of trust between organizations.
  • Potential lack of organizational identification among employees.
  • Need for increased communication.
  • Can quickly become overly complex when dealing with lots of offsite processes.
  • Can make it more difficult for employees to know who has final say.

Virtual structures are collaborative and created to respond to an exceptional and often temporary marketing opportunity. An example of a virtual structure is an environmental conservancy in which multiple organizations supply a virtual organization with employees to save, for example, a historic site, possibly with the intent of economic gain for the partners.

Understanding the organizational environment is crucial in open boundary models. For example, some industries cannot outsource noncore processes due to government regulation. (For example, health insurance organizations may be unable to outsource Medicare processes). Or, in some cases, outsourcing may have to be negotiated with a union.

The key to effective boundary-less organizations is placing adaptable employees at all levels. Management must give up traditional autocratic control to coach employees toward creativity and the achievement of organizational goals. Employees must apply initiative and creativity to benefit the organization, and reward systems should recognize such employees.

Learning organizations. A learning organization is one whose design actively seeks to acquire knowledge and change behavior as a result of the newly acquired knowledge. In learning organizations, experimenting, learning new things, and reflecting on new knowledge are the norms. At the same time, there are many procedures and systems in place that facilitate learning at all organization levels.

The advantages of learning organizations include the following:

  • Open communication and information sharing.
  • Innovativeness
  • Ability to adapt to rapid change.
  • Strong organizational performance.
  • Competitive advantage.

The disadvantages of learning organizations include the following:

  • Power difference is ignored.
  • Process of implementing will be complicated and take longer.
  • Fear of employee participation in organizational decisions.
  • Breaking of existing organizational rules.

The Impact of Growth Stages on Organizational Structure

Organizations typically mature in a consistent and predictable manner. As they move through various stages of growth, they must address various problems. This process creates the need for different structures, management skills and priorities.

The four stages of development in an organization's life cycle include the following:

The beginning stage of development is characterized by an inconsistent growth rate, a simple structure and informal systems. At this stage the organization is typically highly centralized. "Dotcom" companies are a good example of startup companies.

The expansion stage is evidenced by rapid, positive growth and the emergence of formal systems. Organizations at this stage typically focus on centralization with limited delegation.

Consolidation

The consolidation stage is characterized by slower growth, departmentalization, formalized systems and moderate centralization.

Diversification

The diversification stage occurs when older, larger organizations experience rapid growth, bureaucracy and decentralization.

As an organization grows or passes from one stage of development to another, carefully planned and well-conceived changes in practices and strategies may be necessary to maximize effectiveness. There are no guarantees that an organization will make it from one stage to the next. In fact, a key opportunity for leadership is to recognize indicators that suggest an organization is in a risky or unhealthy stage and to make appropriate structural adjustments.

The art of organizational design is assessing the environment's essential aspects and their meaning for the organization's future. Translating those characteristics into the right structure is critical to increasing efficiency and controlling costs. When selecting the best structure for the organization, company leaders should examine and evaluate current key structural dimensions and contextual factors. See  How do I determine which HR metrics to measure and report?

Structural dimensions

Leaders can develop an understanding of the organization's internal environment through measurement and analysis of its structural dimensions. Key dimensions, which are usually measured through a survey, include:

Specialization. The extent to which an organization's activities are divided into specialized roles.

Standardization. The degree to which an organization operates under standard rules or procedures.

Formalization. The extent to which instructions and procedures are documented.

Centralization. The degree to which leaders at the top of the management hierarchy have authority to make certain decisions.

Configuration. The shape of the organization's role structure, which includes:

  • Chain of command. The number of vertical levels or layers on the organizational chart.
  • Span of control. The number of direct reports per manager or the number of horizontal levels or layers on the organizational chart.

Contextual factors

A review of contextual factors will provide a better understanding of the external environment and the relationship between the internal and external environment. Some of the significant contextual factors to consider in this review include:

Origin and history. Was the organization privately founded? What changes have occurred in ownership or location?

Ownership and control. Is the organization private or public? Is control divided among a few individuals or many?

Size. How many employees does the organization have? What are its net assets? What is its market position?

Location. How many operating sites does the organization maintain?

Productsand services. What types of goods and services does the organization manufacture and provide?

Technology. Are the organization's work processes effectively integrated?

Interdependence. What is the degree to which the organization depends on customers, suppliers, trade unions or other related entities?

After examining the structural dimensions and contextual factors and developing an understanding of the connection between an organization's structure and strategy, organization leaders can consider alternative structures. They may use diagnostic models and tools to guide the design process.

Communications and Technology

The last few years have seen an unprecedented expansion and improvement of online communication. Software has pushed the boundaries of workplace communication beyond e-mail into collaborative social media platforms and innovative intranets. The decline in traditional communication methods and the dramatic increase in cyber communication has had a major impact on the workplace and is leading to restructuring.

As organizations continue to restructure to remain competitive, communications can drive the transition to an effective new organizational structure. Research suggests that companies can positively affect their credibility with employees through various organizational communication programs.

In establishing internal communication channels, leadership must be aware of the advantages and shortcomings of communication technologies and match them to the organization's needs, strategic goals and structure. Employers should also be cognizant of, and be prepared to deal with, the common communication challenges in various organizational structures. For example, communications technology has enabled organizations to create virtual workplaces and teams. In a virtual team, members from various geographical locations work together on a task, communicating via e-mail, instant messaging, teleconferencing, videoconferencing and web-based workspaces. Although virtual teams have significant advantages—most notably reduced travel costs and flexibility in staffing and work schedules—they also pose challenges. Virtual teams often find coordinating team logistics and mastering new technologies difficult. Communication is also a major challenge because of the absence of visual (body language) and verbal (intonation) clues. Research suggests that organizations can overcome these challenges through effective support and training.

Global Issues

Organizational structures often need to change as companies expand around the globe. An organization's leaders should plan carefully before opening offices in another country.

Many issues arise when an employer plans to open an international branch, hire international workers and formulate a globalized strategy. Among the questions that must be answered are:

  • How do human resource legal requirements and practices vary from country to country?
  • Should HR officials at headquarters do the work, or should a company open HR offices in the other country?
  • Should an organization hire consultants to handle local hiring and personnel services?

Unless employers have a sound HR strategy ready before leaping into another country, they could fail.

When an organization opens international offices, HR professionals and other business leaders should be able to communicate as effectively with workers across the globe as around the corner. That can be a challenge. Having a robust intranet and using videoconferencing are alternatives to face-to-face communication.

As rapid changes in technology affect global communication, employees must be aware of linguistic, cultural, religious and social differences among colleagues and business contacts. The organization should train all employees (not just managers and CEOs who travel) in cultural literacy.

Moreover, employers should be aware that language difficulties, time‐and‐distance challenges, the absence of face‐to‐face contact, and, above all, the barriers posed by cultural differences and personal communication styles make global virtual work far more complex than local structures. These practices can enhance global virtual team relationships:

  • Using online chats, video- and audioconferencing in addition to one-on-one conversations and e-mail.
  • Posting profiles of team members that outline their expertise and roles in the organization.
  • Being sensitive to the level of engagement team members are likely to deliver if they must meet at inconvenient hours across multiple time zones.

Legal Issues

Regardless of the type of structure, employers must ensure compliance with legal requirements in the countries where their organizations operate. Some of those requirements will be quite extensive (for example, public companies must ensure compliance with the Sarbanes-Oxley Act, and most organizations must ensure compliance with the Fair Labor Standards Act and its related state laws). When organizational structures change, or if the chain of command is weak or fails to keep up-to-date with changes in the business, a company may have compliance problems because the structure has not been evaluated with regard to these laws. Imagine, for example, a restructuring that reduces the number of direct reports for an entire layer of management, which perhaps leads to those individuals no longer being exempt.

As an organization moves internationally, laws in the host countries must also be evaluated and a plan put in place for compliance before the expansion occurs. Employers must anticipate and plan for laws affecting all aspects of the employee experience, including hiring, benefits, leaves and termination.

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What is a matrix organization? Definition and example

A Matrix Organization has a complicated structure in which the reporting relationships are set up as a matrix – a grid – instead of the traditional vertical hierarchy.

Employees in a matrix organization generally report to both a product or project manager as well as a functional manager (department head). The structure facilitates the horizontal flow of information and skills.

Within this framework, employees benefit from a broader perspective on the business, gaining insights from multiple supervisors which can lead to more innovative problem-solving approaches.

In a matrix organization, the traditional departments seen in * functional structures combine with project teams.

* Functional structure refers to basing a department according to functional areas, such as marketing, IT, research & development (R&D), finance, etc.

Matrix_Organization_Structure

Matrix is one of several different organizational structures that employers may adopt.

The dynamic nature of a matrix organization facilitates a fluid and flexible response to market changes, allowing for rapid reallocation of resources and adaptation of management roles.

In a matrix organization you have 2+ bosses

In a matrix organization structure, all the company’s engineers may be working in one engineering department, reporting to the engineering manager. However, some of those engineers might be assigned different projects, and also report to a project manager.

They only do this – also report to the project manager – while they are working on that project. Sometimes, the engineer might have to work under several different managers in order to get his or her job completed.

Philips, a Dutch technology company headquartered in Amsterdam, set up matrix management in the 1970s with its managers reporting to both a product division manager as well as a geographical manager. The grid system soon caught on, and several other large multinationals, including Texas Instruments, Hughes Aircraft, General Motors and Caterpillar Tractor started doing the same – setting up reporting along both project and functional lines.

Matrix organization success

Organizations may fall somewhere in between the pure matrix and the fully functional. Even basically fundamentally functional organizations sometimes create a special team to handle a crucial project.

In today’s world of business, matrix organizations are considerably more common than they used to be forty years ago. Most large complex organizations exist today at some level of matrix management, especially those with several business units and global operations.

Example of a matrix organization

Imagine you work in an advertising agency as a video producer. You will probably have to report to the media department manager, your functional chain of command boss – the head of your department.

However, you will probably also have to report to somebody who is in charge of a specific project for a client – the project manager – he or she is your boss in the project chain of command.

The functional manager is responsible for all the technical performance of each employee in his or her department, which in this case is video production.

The project manager, on the other hand, is responsible to the overall performance of the product team. He or she is the project’s boss as far as the client is concerned.

Matrix organization quote: Edward Whiteacre Jr

Advantages of a matrix organization

Supporters of matrix management argue that in this structure, team members are able to share information more readily across task boundaries, which counters the ‘silo’ limitation of functional management. ‘Silo’ refers to the isolated company department, where all reporting and sharing of information occurs only within that department.

In a matrix structure, reporting and information sharing goes beyond a department’s boundaries, which allows for specialization that can both increase depth of knowledge and assign people according to project needs.

The advantages of having a matrix organization are listed as follows:

  • Resources are used more efficiently, where equipment and experts are shared across projects.
  • Projects and products are formally coordinated across functional departments.
  • Information flows in several different directions within the whole organization, rather than circulating in isolation inside each department (‘silo’ syndrome).
  • The company’s employees are in touch with many people inside and outside their department. This helps with sharing information, which in turn speeds up many processes, including decision-making.
  • Employees must work autonomously and organize themselves creatively, according to each boss they have to report to. This may boost motivation and decision-making.
  • Individuals have the opportunity to use particular skills within a variety of contexts.
  • Several departments have less need to meet regularly. This saves money and can improve coordination.
  • Projects are usually more cost-effective if human and material resources are shared across departments.

Disadvantages of a matrix organization

  • Project team members may have divided loyalties because they have to report to two or more line mangers.
  • This kind of scenario – reporting to two or more different bosses – can put team members under considerable pressure.
  • Given the complex nature of matrix structures, the line of accountability for project teams may not be very clear.
  • It can be hard to coordinate properly. Unless it is well set up and executed, there is a risk of chaos.
  • Matrix team members usually need time to get used to functioning effectively in this kind of structure.
  • As there is much more to do and remember, matrix team members may neglect their functional duties.

In most cases, the matrix structure does not replace a traditional functional structure – it sits alongside it.

The matrix structure can enhance the professional development of employees by exposing them to diverse managerial styles and cross-functional experiences.

When did the matrix organization emerge?

It is hard to trace the exact origins of the matrix management concept. Some say it started in the 1970s with Philips, as mentioned earlier. According to Britannica.com , the term first appeared in the 1960s in the aerospace industry.

Aerospace companies that wanted government contracts had to develop charts that showed the structure of the project management team that would be in charge of a contract. The chart explained how this team was related to the overall management structure of the company.

Instead of reconfiguring their management systems completely in order to meet the client’s (government’s) requirements, companies decided to create horizontal project units that existed alongside the functional structures – the vertical hierarchies that were already in place.

This approach killed two birds with one stone: 1. It fulfilled the goal of the client – a transparent set of resources led by a group manager. 2. The company did not have to change the fundamental functional structure of the whole organization.

Vocabulary and examples

There are many terms in Business English that contain the words, “matrix organization,” such as “matrix organization dynamics.” We call them compound nouns. A compound noun is a term that consists of two or more words. Let’s take a look at some of them, their meanings, and how we can use them in a sentence:

Matrix Organization Dynamics

The study of forces and factors that affect the flow of authority and information within a matrix organization. Example: “The matrix organization dynamics at the firm allow for both flexibility and functional expertise to coexist.”

Matrix Organization Chart

A visual representation of the complex reporting structure within a matrix organization. Example: “Her name appears twice on the matrix organization chart, indicating her roles in both product development and marketing.”

Matrix Organization Strategy

The overall plan for balancing various operational dimensions within a matrix organization. Example: “Their matrix organization strategy focuses on maximizing cross-departmental collaboration.”

Matrix Organization Leadership

The guidance provided by managers who oversee the dual reporting functions in a matrix organization. Example: “Matrix organization leadership requires a nuanced approach to effectively manage dual-reporting employees.”

Matrix Organization Efficiency

The measure of how effectively a matrix organization utilizes resources and personnel. Example: “The consultant’s report highlighted the matrix organization efficiency, particularly in project execution.”

Matrix Organization Model

The theoretical framework that outlines the structure and function of a matrix organization. Example: “The new startup adopted a matrix organization model to stay agile in the fast-paced tech industry.”

Matrix Organization Conflict

The type of disagreement or confrontation that arises from the dual reporting system in a matrix organization. Example: “They conducted a workshop to address matrix organization conflict and improve team cohesion.”

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Matrix Organizational Structure: Examples, Advantages, and Disadvantages

Fahad Usmani, PMP

September 1, 2022

matrix organizational structure

I am sure that you might have heard of the matrix organizational structure , which is the most popular organizational structure adopted by medium to large organizations. They like this type of organizational structure as it provides the flexibility required to run their operations.

This flexibility makes the matrix structure attractive, as projectized and functional organizations are rigid by nature. 

A functional structure’s rigidity makes changing workflow or procedure difficult. Organizations using functional structures face challenges with in-house projects. Since projects are temporary, businesses cannot keep project management staff permanently.

A projectized organization has a temporary structure. However, if the business has many projects, it will need some permanent staff to manage administrative, finance, legal issues, etc. Put simply; they need some permanent staff to take care of regular activities. An all-temporary staff will not suffice.

This is where a matrix organizational structure comes in—it has the best of both worlds. It allows organizations to choose the structure to suit their requirements, providing them with an efficient and flexible structure.

Projectized and functional structures represent two extreme points of a string, while the matrix organizational structure is balanced. It is a mix of two or more types of organizational structures.

This combination helps organizations achieve higher efficiency, readiness, and market adaptation. They can respond faster to customer demand with less product launch time. This structure is suitable for organizations operating in a dynamic environment.

However, a matrix structure is not suitable for a fixed business environment. For example, organizations with production operations don’t typically require changes to their processes, so they should adopt a functional structure.

Matrix Organizational Structure

Matrix Organization Chart

According to the PMBOK Guide, the matrix organization is a combination of the projectized and the functional structures.

In a matrix organizational structure, the authority of a functional manager flows downwards, while the influence of the project manager flows horizontally. Hence, it is called a matrix organizational structure.

Employees may report to several managers in an organization with a matrix structure.

For example, let us say you are an engineer working in a functional department. Your organization starts a project and needs an engineer to assist the project manager. You may be assigned to the project for a short period or be called whenever they need your services. You will report to two bosses.

The matrix structure is a composite of the projectized and functional structure . The appeal of this structure is that the knowledge, skills, or talent of an employee can be shared.

Functional managers will look after the functional part of the project. They may decide on the staff assignments. The project manager will have authority over the administration of the project. For example, the project manager will carry out the work, follow up on the schedule, evaluate performance, etc.

Working in a matrix organization is challenging. Your role will be complex because you have many bosses. Firm work priorities, a clear reporting system, and defined responsibilities are important to avoid confusion and provide a better work environment in a matrix organization.

Large and multi-project businesses take advantage of the matrix organizational structure so they can move employees whenever and wherever their services are needed. The matrix structure has the flexibility of maximizing the organization’s talent by viewing employees as shared resources.

Types of Matrix Organizational Structure

You can classify the matrix structure into three categories:

  • Strong Matrix Structure
  • Balanced Matrix Structure
  • Weak Matrix Structure

Strong Matrix Organizational Structure

Strong Matrix Organization chart

In strong matrix organizations, the project managers have full authority and a full-time role. They control the budget, and a full-time project management team will report to them. In this way, a strong matrix structure shares characteristics with a projectized organization.

The functional manager has a minimal role in a strong matrix organization.

Balanced Matrix Organizational Structure

Balanced Matrix Organization chart

In balanced matrix organizations, project and functional managers share authority. The project manager has a full-time role, while the project management staff will be part-time. Here, both managers control the budget.

Weak Matrix Organizational Structure

Weak Matrix Organization chart

In weak matrix organizations, project managers have limited authority. Their role is part-time, and no administrative staff report to them. Their position is similar to a coordinator or an expediter . In a weak matrix structure, the functional manager controls the project budget.

A weak matrix organizational structure shares characteristics of a functional organizational structure.

Advantages of a Matrix Organizational Structure

The following are a few advantages of a matrix organizational structure:

  • Highly skilled and capable resources can be shared. This allows open communication and knowledge sharing within the organization.
  • The matrix structure is dynamic, allowing employees to communicate across department boundaries and creating a pleasant, cooperative work environment that helps to integrate the organization.
  • Employees can enhance their skills and knowledge by taking part in different projects. The matrix structure provides a fertile environment to learn and grow.
  • Employees are skilled in functional departments. Project teams can access these capable employees whenever their services are needed.
  • Because of job security, employees will be faithful and perform well, meaning the efficiency of a matrix organization is higher.
  • Resource usage is optimal. You have access to experts from your organization, and you can share equipment between projects. Negotiation works smoothly in matrix organizations.

Disadvantages of a Matrix Organizational Structure

The following are a few disadvantages of a matrix organizational structure:

  • Employees may have to report to two managers, which adds confusion and may cause conflict. This especially happens in a balanced matrix organization where both bosses have equal authority.
  • An authority conflict may arise between the project manager and the functional manager.
  • Employees may be confused about their roles and responsibilities. Work priorities can cause conflict among employees if they are not well defined. This happens when employees are assigned a new task different from what they expected.
  • There can be competition for scarce resources, which may cause hostility and impair work.
  • It is perceived that matrix organizations have more managers than required, which increases overhead costs.
  • The workload tends to be high in a matrix organization. Employees have their regular work along with the additional project-related work, which can exhaust them. Employees may ignore their regular responsibilities if they are overtaxed.
  • A matrix structure is expensive to maintain. Organizations have to spend more to keep resources, even when they are not busy, as some are needed only for a short duration.

Example of Matrix Organizational Structure

In 1970, Philips started using the matrix structure for the first time. The company’s managers were reporting to their production head and geographical managers. It became so successful that other multinational organizations such as General Motors, Hughes Aircraft, and Caterpillar Tractors adopted the same structure.

How to Overcome the Disadvantages of a Matrix Organizational Structure

Some disadvantages of a matrix structure can be countered in the following ways:

  • Organizations should foster close cooperation between the project manager and the functional manager to avoid confusion and conflict.
  • Communication should be well defined, and it should occur in all directions. This is important to gain support from executives, managers, supervisors, and employees.
  • Organizations must clearly communicate their vision, objectives, and goals to their employees.
  • Power distribution between the project and the functional manager should be balanced properly. Any imbalance may impact the effectiveness of operations.
  • Any conflict between the project manager and the functional manager must be resolved as quickly as possible and in private.
  • Roles and responsibilities should be clear and communicated to employees to avoid confusion.

Big organizations have dynamic environments. They need to respond quickly to customer requirements and market demand, so a matrix structure is suited to them. This allows for better resource utilization and provides experts when needed. The matrix organizational structure tries to blend the best of both worlds since power-sharing between the project and functional managers changes according to the matrix. Though matrix structure adds complexity, the benefits far outweigh it.

I hope this blog post has increased your understanding of the matrix organizational structure. 

Are you working in an organization with a matrix structure? Please share your work experience through the comments section.

This is an important topic from a PMP exam point of view, and you may see a few questions about it in your exam; therefore, make sure to review this post and feel free to discuss it further in the comments. 

Reference: Alternative Organizational Structures 1976 and “Is the Matrix Fad a Fast-Fading Flower?” 1984, Bob Youker.

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I am Mohammad Fahad Usmani, B.E. PMP, PMI-RMP. I have been blogging on project management topics since 2011. To date, thousands of professionals have passed the PMP exam using my resources.

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One Comment

MGD: The matrix structure exactly describes how our organization’s project management function is deployed. I would say that we have a weak matrix structure in that we have virtually no authority over our associates who execute the technology components of our projects. Rather, our authority is more of a moral authority, in that following the plan and executing to the project requirements are within the scope and context of our organization’s stated mission and core values. So, it’s up to us as project managers to encourage and enlist cooperation from our comrades rather than compel and require their attention and efforts. That, after all, is leadership, the art of influencing others so as to obtain their willing cooperation toward the accomplishment of a goal or mission.

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What Is a RACI Matrix?

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A RACI matrix is a document that clarifies which individuals or groups are responsible for a project’s successful completion, and the roles that each will play throughout the project. The acronym RACI stands for the different responsibility types: Responsible, Accountable, Consulted, and Informed.

Successful project management depends on a team-wide understanding of roles and responsibilities. Using a RACI matrix to assign and define each role is a great way to keep a project on track and positioned for success. When designed correctly, the RACI matrix is a way for a project manager to help ensure the success of the project before it’s even begun.

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How Does a RACI Chart Help Project Managers?

Project managers use RACI charts to keep track of team roles and relay those responsibilities to the larger team. The matrix defines clear roles and responsibilities for individual team members across the various phases of the project, breaking each role down into four types of designation: those who are Responsible and Accountable for project deliverables, those who should be Consulted as work begins, and stakeholders who need to be Informed of ongoing progress, roadblocks, and updates. 

Read more about project phases

RACI Matrix Definitions 

Responsible.

The individual(s) with responsibility for the task or deliverable is typically responsible for developing and completing the project deliverables themselves. The responsible parties are typically hands-on team members that make direct contributions toward the completion of the project. The responsible team is comprised of the project’s “doers”, working hands-on to ensure that each deliverable is completed. 

Some examples of responsible parties are:

  • Project Managers
  • Business Analysts
  • Graphic Designers
  • Copywriters

Accountable

Accountable parties ensure accountability to project deadlines, and ultimately, accountability to project completion. This group frequently also falls under the informed category.

Some examples of accountable parties are:

  • Product Owners
  • Signature Authorities
  • Business Owners
  • Key Stakeholders

Consulted individuals’ opinions are crucial, and their feedback needs to be considered at every step of the game. These individuals provide guidance that is often a prerequisite to other project tasks, for example, providing legal guidance on a project throughout the process. If you are working on new product development or expansion, this could essentially be the entire organization.

Some examples of consulted parties are:

  • Legal Experts
  • Information Security and Cybersecurity Experts
  • Compliance Consultants

Informed persons are those that need to stay in the loop of communication throughout the project. These individuals do not have to be consulted or be a part of the decision-making, but they should be made aware of all project updates. Typically, this party are business owners or stakeholders that are more interested in viewing the project at a 30,000-foot view.  Keep this group on your cc list for awareness of topics, decisions, and progress – that includes making them part of the initial project kickoff and project demos as optional attendees. This group often also falls under the accountable group.

Some examples of informed parties are:

  • Project Committee Members
  • External Stakeholders

Why Are RACI Roles Important?

RACI roles provide a sense of organization and clarity for teams that are looking to divide roles and keep team members accountable for their contributions. Considering that 27% of projects go over budget, for reasons like scope creep and lack of defined roles, RACI roles help position a project for success and avoid common pitfalls. 

Moreover, RACI roles help ensure that communication between all roles is ongoing. When you consider that nearly half of all project spending is at risk of being wasted due to a lack of effective team-based communication , it becomes all that more important to prioritize. Ultimately, teams who prioritize communication and well-defined roles are better off, and RACI roles help teams achieve that goal faster – while providing accountability for each team member’s unique contributions to the success of the project. 

Read More: Top 10 Main Causes of Project Failure

How to Create a RACI Matrix 

If you’re looking to implement a RACI matrix as part of your team’s project planning process, take these steps to create a RACI matrix.

Ensure that you have a thorough understanding of the project and its demands before outlining any further steps by communicating with key stakeholders and decision-makers.

Determine the list of key activities and deliverables from the director of program management or other leadership. 

Determine who is needed to be a part of the project or initiative.

Determine the project roles and responsible job titles and persons for each activity and deliverable.

Hold review sessions with key members of the team for alignment, and if you haven’t already, host a kickoff meeting with the entirety of the team and key stakeholders to unveil the matrix, address questions, and more. 

If the project has already started, it’s not too late to implement a RACI matrix.

  • Outline the story. Using research from multiple sources, do a, b, c, and d.
  • Utilize steps 2 and 3 (shown above). Ensure the right groups are assigned and engaged. 
  • Hold a review session. Ensure that the team acknowledges and discusses the plan and the roles assigned.

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Colorful table RACI matrix with definitions of RACI roles.

Our FREE Downloadable RACI Matrix Template

Who creates the raci matrix.

The RACI matrix — sometimes called RACI model, RACI diagram, or simply just RAC — is created by the project manager at the start of the project as a key part of establishing the initial human resources planning for the project. Because miscommunication is a common threat to any project, RACI charts are a great asset to teams dealing with any type of project, from very simple projects to extremely complex ones. 

FAQ: How do I Implement a RACI matrix?

Implementing a RACI matrix takes more than just a few emails and sporadic conversations – it takes consistent communication and planning. You should host a kickoff meeting to introduce the matrix to the team and make a plan to continue meeting at predetermined times throughout the project lifecycle. 

Here are a few more tips to keep in mind as you implement your RACI matrix within the team dynamic:

  • Get everyone prepared. Send the document around to the meeting distribution as read-ahead material, requesting feedback if there are any major concerns. 
  • Roll out each role for the team . During the meeting, conduct a review of the tasks and responsible parties. Do not rush through this review, but rather ensure enough time in your project kickoff for this important aspect. (Be certain to clarify the definitions of RACI to avoid ambiguity.)
  • Consider changes and update accordingly. After the meeting, send out the notes documenting acceptance or updates to the RACI. In addition to sending out the notes, request any corrections within a reasonable yet defined timeframe. Clarify that if no changes are requested, each person is acknowledging their role and committing to the project tasks as outlined.
  • Stay in touch. Consider a quick review with the entire team each quarter or every six months for longer projects to ensure it remains up-to-date and not simply another document in the repository but a relied-upon artifact.

FAQ: What are RACI matrix best practices?

As you implement the raci matrix….

  • Encourage teamwork and foster collaboration whenever possible.
  • Don’t fear updates – make changes and adjustments as needed (but be sure to communicate those changes clearly to all parties).
  • Earlier is better. Roll out your matrix plan to the team BEFORE you plan to implement it for the best results. 
  • Have a clear-cut understanding of the project scope and how each role connects to the overall project goal.

For “Responsible” Parties:

  • Make sure your project’s definition of Responsible is clear on who holds the “decider” role for the project or project phase’s completion, and what the dimensions of that responsibility will be.
  • Ensure that all parties are aware of their role and responsibilities within the matrix.

For “Accountable” Parties: 

  • When multiple Accountable team members must exist, use your definitions to make clear which individual is accountable for a given project element, and how that individual needs to interact with other Accountable team members.
  • Ensure that there is only one “Accountable” party assigned per task.
  • Be sure that the Accountable party has the authority and power to oversee the task as the accountable party.

For Consulted and Informed Parties: 

  • Consulted parties are often high-level decision-makers with heavy schedules. Make sure you’re clear on their availability ahead of time.
  • Similar to Consulted parties, Informed parties are often less hands-on and have less understanding of day-to-day project operations. As the project goes on, make sure to keep detailed notes to keep the Informed party up-to-date on key information. 
  • Understand the ways that these parties like to communicate and create a plan to reach them early – whether that’s over phone calls, emails, video calls, or from within your project management system’s collaboration tools.
  • Knowing the difference between who needs to be consulted versus informed can be a challenge if there is ambiguity about project roles. Consider what aspects of the project different team members need to know to do their jobs, and then bake those into your definitions.

RACI Matrix Pros & Cons

Free raci matrix templates.

A number of project management software solutions include a native RACI matrix template. Here are just a few we’ve found:

Colorful RACI Chart Template

We love this template from Smartsheet because it’s colorful, thorough, and includes room for every party involved in the project. 

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Pastel Colored RACI Matrix Template

This template from the Academy to Innovate HR is a great choice for project managers who want to organize their team roles with an easy-on-the-eyes chart that evolves beyond the simple spreadsheet. 

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Simple RACI Chart from Clickup

These RACI templates from Clickup have enough variety to fit any of your project needs, but are simple enough for even beginner PMs to use.

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Detailed RACI Matrix Template

This template is a great starter template for anyone looking to explore RACI charts in their project management strategy. As an added bonus – it comes with the RACI definitions already built in!

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Excel-Based RACI Chart Template

Are you an Excel or Google Sheets user looking to take advantage of the RACI matrix? An Excel-formatted template from Project Management Docs can be just the solution for you. This template is a great template for users who want a chart that comes in a pre-formatted structure.

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19 Advantages and Disadvantages of Matrix Organizational Structure

A matrix organizational structure is an organizational-based foundation where the reporting relationships get set up as a grid. That means the traditional hierarchy disappears in the chain-of-command. Instead of reporting to a single supervisor or manager, employees have dual-reporting duties. There is usually a product and a functional manager that oversees productivity each day.

Most large companies use the matrix organizational structure because of the efficiencies that it produces. Brands like Texas Instruments and Caterpillar require its supervisors to report along project and functional lines to ensure productivity levels remain high.

Then the project and functional managers report to the C-Suite in some way. Some companies might create a line to a specific executive who then reports to the CEO, the President, or the Board of Directors.

The aerospace industry in the United States was the first to implement this approach to professional reporting in the 1950s. It was able to manage projects with greater size and complexity as expertise needs expanded beyond a single discipline, so more companies began to implement this approach.

Every organization should review these matrix organizational structure advantages and disadvantages to see if this approach might offer usefulness.

List of the Advantages of the Matrix Organizational Structure

1. This structure makes it easier to share resources in different divisions. One of the most significant advantages of the matrix organizational structure is its ability to share highly-skilled resources. It can shift between the needs of the various projects under development and the company’s functional units. That means communication lines must stay open naturally since obstruction can impact the efficiency of the system. That means there are fewer boundaries between groups, fewer silos, and more collaboration because the business has more integration.

2. It strengthens job security within the organization. Teams remain loyal within the matrix organizational structure because it offers a more stable work environment. Employees don’t need to worry about the whims of a single individual impacting their livelihood, especially if they are employed in a right-to-work environment. That means a stronger atmosphere of job security can lead to people wanting to work harder because they have direct investments in the outcome of each project.

When people feel like the rug isn’t going to get pulled out from underneath them when they finish a project, it is easier for them to invest. That means the quality and quantity of the work that teams produce gets better over time when using this structure.

3. The matrix organizational structure improves internal communication. When the matrix organizational structure gets implemented in the modern organization, then communication is simplified. The departmental walls that create competition in other companies disappear, making it easier for workers to move freely between different units. The goal of this method is to have each person share their experiences and expertise freely so that everyone benefits from their perspective.

The ease of communication that exists with this structure almost always leads to new sharing and collaboration opportunities. Although some exceptions can happen, this work typically leads to a stronger and better organization.

4. It encourages more employee development. The matrix organizational structure encourages employees to continue their career development process. It exposes them to multiple project types instead of confining them to specific departments or team silos. That means a diverse approach to thinking and creativity develops within the company.

Everyone gains valuable experiences by working outside of their traditional boundaries. That means the entirety of their professional skillset begins to experience growth. This advantage works to increase personal job satisfaction while also helping workers to become more valuable as an employee to promote more job security.

5. Companies gain more flexibility with this structure. Instead of pulling from individualized resource pools, the matrix organizational structure lets a company use the entire business to find the talent it needs. You can ask anyone from any department a question about a project. It means you can always select the best person for a job internally than trying to hire someone new in an unpredictable hiring climate. If someone from customer service has marketing skills that you need, then you can pull them into the work until it gets done – and then send them back to their regular job duties.

6. Less downtime occurs for internal resources. The matrix organizational structure creates enough flexibility within the employee pool to create more moments of downtime when correctly managed. Instead of forcing people into roles that require them to improve their talents or skills to be productive, each person can focus on their strengths instead. That means the quality of the work naturally improves while the time spent on each project can do down.

Although this advantage creates the risk of having one person juggling multiple projects simultaneously, it still uses the average worker’s skills more efficiently. You’ll have fewer moments of downtime across the organization because other workers can pick up the slack if they aren’t doing anything else.

7. It allows for consistent methods to get used across the organization. When there is flexibility in the resource pool with a matrix organizational structure in place, then everyone gets more consistency because each person must work in a similar way. It eliminates the confusion of responsibility because the managers expect the same results from each worker, even if they have an assignment on different projects. This advantage makes it easier to transition between projects because the learning curve decreases.

This standardization can create some issues with job security if artificial intelligence can take over repetitive tasks. When you can achieve this outcome, the work gets better with less labor, and that means the cost savings can get passed along to consumers to create a competitive advantage.

8. Several variations of the matrix organizational structure allow for individualization. Companies can implement one of three variations of the matrix organizational structure. You can have a weak, balanced, or strong approach when forming teams. The first option requires the project manager to communicate with the functional side of the chain-of-command for each respective team member, and then employees report to their functional manager only for specific projects.

If a company takes a balanced approach, then team members report to both managers. This structure requires employees to work on their job duties and a project assignment. Workers in a strong matrix are similar to a dedicated team, giving members a clear line of reporting to the project manager while keeping the functional side in the look.

9. It can be cheaper to implement the matrix organizational structure. Most companies find that it is cheaper to implement the matrix organizational structure than it is to establish a dedicated project team. This advantage doesn’t apply to long-term commitments, but it is ideal when developing new products or services. Allowing workers from different functions to work under a project manager to create something unique creates new opportunities to draw upon the expertise of multiple disciplines simultaneously.

The diversity that develops from the matrix organizational structure often makes the teams created in this format stronger than those that are purely functional in their overall approach.

List of the Disadvantages of the Matrix Organizational Structure

1. Both managers must be on the same page for it to be an effective structure. Employees in the matrix organizational structure are typically accountable to more than one direct supervisor. Most companies institute two separate chains of command to manage their needs with this approach, which means each supervisor must be on the same page with everyone else to ensure productivity levels remain maximized. If a worker receives conflicting messages from their bosses, then the end result is a reduction of quality and quantity in their work.

When two bosses are at odds with each other, then the project members get caught in the middle of the conflict. It is an issue that can cause all work to grind to a halt.

2. Some employees might play managers against each other. Discord in the management ranks means there is less supervision that happens during a project. Some workers like to create discord between their two managers because that gives them more freedom to operate independently. This issue can occur sometimes because the employee feels like their supervisors micromanage their duties, but it usually happens when a personal agenda is in play.

If the managers can get on the same page to understand what is happening, then the removal of a potentially problematic team member supports higher productivity levels. This disadvantage gets missed far too often, unfortunately.

3. This structure increases the organizational complexity of the company. The traditional hierarchy model was used for centuries because it creates a simple foundation for reporting. Each person under that basic system has one boss to who they report directly. Supervisors benefit because they have a clear idea about who their direct reports are and what their responsibilities will be each day.

Shifting to a matrix organizational structure changes this dynamic because it creates multiple paths of responsibility. That means there must be a high degree of cooperation between the project and functional management to ensure the mission and vision of the organization remain a priority.

4. The matrix organizational structure can cause management directives to conflict. When using the matrix organizational structure, the goal is to have two or more managerial sets focus on a specific area of the business. That approach eliminates the need to multitask, but it doesn’t always result in greater efficiencies. The separate chains of command can sometimes have differing managerial directives that come into conflict with each other. Although the spirit of cooperation is the desired result, the competitive nature of each person and team can come into play.

That means the actions of the project and functional managers might create problems for their direct reports because employees don’t know which side is following company directives. If there is confusion in the C-Suite regarding how to approach this potential disadvantage, then it can create a massive level of gridlock within the organization.

5. Some workers might experience reporting confusion. Although the matrix organizational structure improves communication within a company, the dual-reporting structure can also create some confusion for some workers. If there is more than one boss supervising a worker’s performance, then the details that get moved up the chain-of-command can get jumbled quickly.

This disadvantage of the matrix organizational structure can also make some workers question who is in charge. That’s why most companies require employee reports to be given to all relevant management personnel simultaneously.

6. It can result in a heavier workload for some people. It is entirely possible for the workloads of the average worker to grow exponentially in the matrix organizational structure. This disadvantage can lead to lower levels of job satisfaction, higher employee churn, and issues with burnout. It occurs because team members often get tasked with additional responsibilities because of their identified expertise that goes beyond their regular job duties.

Managers can work to avoid this issue by examining work assignments in advance. Although having your best and brightest on each project is an important outcome, people can only do so much in the time they’re allotted for work each day. Overloading the most talented workers consistently is a recipe that usually leads to them searching for a new place to work.

7. The matrix organizational structure can be costly to implement. The matrix organizational structure can represent an additional significant expense for some companies. It requires them to retain more experienced managers since there are multiple chains of command to manage, along with new department heads, project managers, and other specific roles that the business needs.

Since labor is the primary expense for most companies, using this structure can cause the payroll to balloon rapidly. It can even cause some organizations to keep talent that they don’t use consistently so that they don’t lose someone to the competition. If there isn’t enough work to keep everyone busy, then money can get wasted quickly.

8. It doesn’t work well for long-term projects. If a project is going to be a long-term effort, then the matrix organizational structure may provide too much flexibility for a company. It may be a better choice in this circumstance to create a dedicated team with a permanent assignment.

This option is also an issue when the skills of a specific employee are critical to the mission or vision of the organization for a specific function. Sharing the expertise of this individual may reduce their overall effectiveness and lead to a downgrade of their functionality.

9. The structure can result in a lack of clarity. When you have multiple managers in place for individual workers, then there might not be any determination on that person’s professional development. Coaching duties might get passed back and forth until everyone decides that it is a matter not worth pursuing. This issue with a matrix organizational structure can lead to a loss of clarity on who becomes responsible for each employee’s performance evaluation.

People also work better together when they have spent time as a functional team. Disrupting that process can create enough discomfort where individual productivity goes down. If a worker doesn’t have clarity on whey they can return to their usual duties, then the outcome may be riddled with confusion and conflict.

10. Project managers can act as trainers within an organization. A project manager can act as a trainer internally for anyone who wants to become a functional manager one day. It creates a structured environment where the developed best practices can receive a daily review. Workers are usually their time more efficiently, and no one must wait for their next assignment since they can return to their functional tasks immediately.

That means the project managers can provide leadership support and training by example to the workers who come under their assignment umbrella. It is an advantage that can improve the chains of command while reducing the costs of operating an independent training unit within the company.

The matrix organizational structure helps a company manage large, complex projects. It makes sense to use this option when there is a need to efficiently process a massive volume of information or deploy specialized expertise quickly. The traditional chain-of-command isn’t always well-suited to those purposes.

Companies must identify their motives and needs to implement this structure to determine if it is the correct path to choose. The advantages may be beneficial if the current processes are falling short or there is an expectation of rapid growth soon. Then the disadvantages of cost and complexity might be enough to push some businesses away from this foundational choice.

These matrix organizational structure advantages and disadvantages must get taken into consideration at the local level. It isn’t usually the best option for small business owners, partnerships, or sole proprietors, but it could be a viable solution for large companies that need to build more efficiencies into their systems.

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What is Matrix Organisation?

A matrix organisation is a unique way of structuring an organisation where employees have dual reporting lines. It combines functional departments, like marketing or engineering, with project teams. This setup allows employees to work under a functional manager for their career development and expertise, while also having a project manager who oversees their work on specific projects. The idea behind a matrix organisation is to make the best use of both specialised skills and project collaboration. It helps allocate resources efficiently and enables flexible staffing based on project needs. However, it can sometimes create challenges like confusion about roles and conflicts between managers. To make it work, clear communication, defined roles, and effective project management practices are essential.

Matrix Organisation

Features of Matrix Organisation

A matrix organisation has some unique features that make it different from other types of organisations. Some of these features are:

1. Dual Reporting Lines: In a matrix organisation, employees have two bosses. They report to a functional manager who focuses on their career growth and expertise in a specific department. They also report to a project manager who oversees their work on a particular project.

2. Functional Departments: Matrix organisations have different departments like marketing, finance, or engineering. Each department has its area of expertise and supports employees in their respective fields.

3. Project Teams: Matrix organisations create teams that bring together people from different departments to work on specific projects. These teams have members with various skills and knowledge to contribute.

4. Efficient Resource Allocation: A key benefit of a matrix organisation is that resources can be shared across different projects. This helps the organisation make the best use of employee skills and expertise, leading to better productivity.

5. Flexibility and Adaptability: Matrix organisations are well-suited for changing and complex situations. They can quickly adjust resources based on project needs, allowing them to respond effectively to new opportunities or challenges.

6. Collaboration: The matrix structure encourages collaboration and communication between different departments. People with different expertise work together on projects, sharing knowledge and finding innovative solutions.

7. Dual Focus: In a matrix organisation, employees have to balance their responsibilities in both their functional roles and project work. They contribute to the success of their department and the projects they are involved in, making a broader impact on the organisation.

8. Complex Reporting Relationships: Since employees have two bosses, there can be some complexities in reporting and accountability. To make it work smoothly, clear communication, well-defined roles, and effective coordination are important.

Suitability of Matrix Organisation

The suitability of a matrix organisation depends on various factors and circumstances within a company. While a matrix structure has its benefits, it may not be the right fit for every situation. Some considerations for determining if a matrix organisation is suitable are:

1. Complex Projects: Matrix organisations work well for complex projects that require diverse skills from different areas. When projects involve collaboration across departments, a matrix structure can help coordinate resources effectively.

2. Dynamic Environments: Matrix organisations are suitable for fast-changing industries or markets. Their flexibility allows organisations to quickly adapt to new priorities, challenges, and opportunities.

3. Collaboration between Departments: If interdepartmental collaboration is important, a matrix organisation can be beneficial. It promotes teamwork, breaks down barriers between departments, and encourages knowledge-sharing.

4. Balance of Functional and Project Focus: A matrix structure is suitable when both functional expertise and project work are equally important. Employees can contribute to projects while still fulfilling their functional roles.

5. Organisational Culture and Leadership Support: The existing culture and support from leaders play a role in the suitability of a matrix structure. If the company values collaboration, teamwork, and open communication, a matrix organisation is more likely to succeed.

6. Employee Development Opportunities: Matrix organisations offer employees, the opportunity to develop a broader skill set and gain cross-functional experience. This is suitable when employee growth and development are important.

Advantages of Matrix Organisation

Advantages and Disadvantages of Matrix Organisation

A matrix organisation offers several advantages that can benefit both employees and the overall performance of the organisation. Some of these advantages are as follows:

1. Efficient Resource Use: In a matrix organisation, resources like skills and knowledge can be shared across different projects. This helps the organisation make the best use of its employees’ expertise, leading to increased productivity and efficiency.

2. Collaboration and Communication: The matrix structure encourages teamwork and communication between different departments and project teams. This allows for the exchange of ideas, expertise, and best practices, leading to better problem-solving and overall performance.

3. Flexibility and Adaptability: Matrix organisations can quickly adjust resources based on project needs. This flexibility allows them to respond to changes in priorities, market demands, or new opportunities, keeping the organisation agile and competitive.

4. Integrated Approach: By working in both functional departments and project teams, employees develop a broader understanding of the organisation’s goals. This integrated approach helps align individual efforts with overall objectives, resulting in better outcomes.

5. Learning Opportunities: In a matrix organisation, employees get exposure to different projects and areas of expertise. This provides valuable learning opportunities and allows them to develop new skills, enhancing their career growth.

6. Customer Focus: Matrix organisations assemble teams to work on projects, ensuring that customer needs are considered from various perspectives. This customer-centric approach leads to improved product development and customer satisfaction.

7. Better Decision-Making: Collaboration among team members from different backgrounds leads to well-informed decisions. The diverse perspectives result in more creative and effective decision-making processes.

Disadvantages of Matrix Organisation

While a matrix organisation has its advantages, it also has certain drawbacks to consider. Some of these disadvantages are as follows:

1. Complexity and Confusion: In a matrix organisation, it can be confusing for employees to understand their roles and responsibilities due to having multiple bosses. This can lead to misunderstandings and inefficiencies in their work.

2. Power Struggles and Conflicts: The dual reporting lines in a matrix organisation can create conflicts between functional and project managers. Disagreements over priorities and decision-making authority can cause tensions and hinder progress.

3. Communication Challenges: Communication becomes more complicated in a matrix organisation. Coordinating efforts, aligning goals, and ensuring effective communication between different teams and departments can be difficult and time-consuming.

4. Accountability Issues: With multiple managers, employees may struggle to determine who they are accountable to. This can result in a diffusion of responsibility and a lack of clear ownership.

5. Resource Overload and Burnout: Employees in a matrix organisation may be assigned to multiple projects simultaneously, leading to heavy workloads and increased stress. Without proper resource management, burnout becomes a risk.

6. Slow Decision-Making: The collaborative nature of a matrix organisation can slow down decision-making. The need for consensus and coordination among various stakeholders can cause delays and can hinder the organisation’s ability to respond quickly.

7. Implementation Challenges: Transitioning to a matrix organisation requires significant effort, time, and resources. Restructuring departments, establishing new reporting lines, and providing adequate support and training to employees can be costly and complex.

8. Dilution of Functional Expertise: In a matrix organisation, employees split their time between functional roles and project work. This can lead to a decrease in their focus and depth of expertise in specific areas.

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How to Make a Responsibility Assignment Matrix: Excel RACI Template

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What is a responsibility assignment matrix?

How to create a responsibility assignment matrix in excel, free raci template for excel, how to manage raci roles in your teamgantt plan.

A responsibility assignment matrix (RAM) is a tool used in project management to clarify team and stakeholder roles for each project step. It paves the way for smooth collaboration by ensuring everyone knows what they need to do, who they need to talk to, and who has the final say on key decisions and deliverables.

RACI—which stands for Responsible , Accountable , Consulted , Informed —is the most popular framework used for assigning roles and responsibilities on projects. Here’s a quick breakdown of RACI categories in basic terms:

  • Responsible : Who completes the work?
  • Accountable : Who makes decisions? 
  • Consulted : Who provides expertise?
  • Informed : Who needs status updates?

Of course, RACI isn’t the only responsibility assignment matrix out there. These RACI alternatives provide a small sample of other approaches you might come across in project management.

  • RASCI (or RASIC) matrix : This RACI alternative adds one extra role into the responsibility assignment mix. In the RASCI model, the S stands for Supportive . While this role covers anyone who will lend the Responsible person a hand with the work, a Supportive team member isn’t responsible for the outcome.
  • DACI matrix : DACI stands for Driver , Approver , Contributor , Informed and is used to outline decision-making roles and responsibilities for projects. In this framework, the project manager or leader typically serves as the Driver guiding the team to a decision.‍
  • RAPID responsibility matrix : RAPID stands for Recommend , Agree , Perform , Input , Decide and is another decision-making framework used to define authority vs accountability. The Recommend role kicks things off by suggesting an action, while the Decide role has the ultimate say in how things move forward. ‍
  • CARS : CARS stands for Communicate , Approver , Responsible , Support . In this model, Communicate combines RACI’s Consulted and Informed roles into a single assignment. Someone with the Communicate role lends their expertise and needs to be kept up-to-date on progress. The Approver is the main decision-maker who calls the shots.

Lots of people use spreadsheets to make a responsibility assignment matrix for their projects, so let’s walk through the basic steps of building one in Excel, using the RACI framework as our model.

Looking for an online solution? See how TeamGantt's RACI feature integrates into your project plan.

1. List project tasks and deliverables in column A

First, make a list of all the work that needs to be done for your project down the left side of your matrix. Enter each project task, milestone, or decision in column A of your Excel worksheet. 

Feel free to group tasks by project phase like we’ve done in the screenshot below. That way, your RACI matrix is easy to scan and read.

Excel RACI Matrix Step 1 - List project tasks and deliverables

2. Add team members or project roles across row 1

Starting with column B, label each column header with the name of a team member and/or project role. 

Include the people who will execute and review work for the project, as well as any subject matter experts or stakeholders you may need to consult or keep in the loop along the way.

Excel RACI Matrix Step 2 - Add project role and team member names

3. Insert a new worksheet for roles and definitions

Click Insert > Insert Sheet from the Home ribbon at the top of your Excel workbook.

Excel RACI Matrix Step 3a - Insert new sheet for roles and definitions

Go to your new worksheet, and list each letter of the RACI acronym in column A. Then enter the corresponding role for each letter in column B. We also included RACI definitions in column C as a handy reference for anyone who might need a refresher.

Excel RACI Matrix Step 3b - Enter roles and definitions

You’ll use this worksheet to populate a drop-down list on the main RACI matrix tab to make it easier to assign roles quickly.

4. Add a drop-down list of roles to your matrix

Now, go back to your main worksheet, and click into the first open cell in your matrix.

On the ribbon, click Data > Data validation to insert a drop-down list with RACI roles.

Excel RACI Matrix Step 4a - Click Data Validation

On the Settings tab, choose List under the Allow menu.

Excel RACI Matrix Step 4b - Select allow list setting

Click into the Source field, then highlight the data range with your options from the RACI Roles & Definitions worksheet you set up in Step 3. We highlighted cells A2-A5 in our example.

Excel RACI Matrix Step 4c - Select data source

Verify your Data validation settings are correct, then hit Enter to add the drop-down list to your selected cell.

Excel RACI Matrix Step 4d - Confirm data validation settings

Copy and paste that cell to apply the drop-down list to other cells in your RACI matrix worksheet.

5. Color-code assignments with conditional formatting

Click Conditional Formatting > New Rule on the Home tab. Select Classic > Format only cells that contain > Specific text > containing . Enter the letter R in the text box, then choose Custom Format , and apply a background color (and any other styles you want). 

Repeat this step for each additional letter in the acronym.

Excel RACI Matrix Step 5 - Color-code responsibility assignments with conditional formatting

6. Assign a RACI value to everyone on every task

You’re almost there! Now go down the list of tasks on your responsibility assignment matrix, and assign a role to every person who will be involved in that project step or deliverable.

Excel RACI Matrix Step 6 - Assign a role to everyone on every task

Want to build a responsibility assignment matrix of your own, but don't want to start from scratch? Download our ready-made Excel template for free. This blank RACI template is fully editable, so you can customize it for any project you manage. 

We added drop-downs for assigning RACI roles more easily and included a RACI chart example tab as reference in case you need a little extra guidance.

Download: RACI matrix template for Excel

Free RACI Template for Excel by TeamGantt

You can easily upload your final matrix to your TeamGantt project . But if you don’t want to worry about outdated spreadsheets that get forgotten once work begins, why not assign RACI roles directly to your plan?

Here’s how to use TeamGantt’s online RACI feature for your next project.

Assigning RACI roles and responsibilities to TeamGantt tasks

  • Open your project, and toggle to the RACI tab. This will display all your project tasks in a list format (rows). On the right side of the matrix, you’ll see a column for each person currently invited to the project with cells for each task in the project. 
  • Click the cell below each person who needs to be assigned a role on a task, and choose one of the RACI options from the drop-down.

Screenshot of TeamGantt's built-in RACI matrix for assigning task responsibilities

Viewing RACI matrix assignments for your project

There are 2 simple ways to view RACI assignments in TeamGantt:

  • From the Gantt tab : If someone is assigned to a task and has a RACI role on that task, the RACI value will appear in parentheses next to that person’s name on the gantt chart. Just be aware that you won’t see RACI assignments for people who haven’t been assigned to a specific task in Gantt view.

Screenshot of RACI roles in a TeamGantt timeline

  • From the RACI tab : To access your project’s full RACI matrix, simply toggle to the RACI tab for that project. You’ll find RACI assignments for every person playing a role—whether or not they’re the one responsible for doing the work.

Screenshot of the RACI tab in a TeamGantt project

Provide clear visibility into every aspect of your plan

TeamGantt makes mapping task roles and responsibilities simple by integrating the RACI model into your project plan. Not only does that save you time and paperwork, but it also ensures everyone always has easy access to responsibility assignments online. 

Create a project plan your whole team can contribute to and collaborate on. And because everything happens online, you can stay on top of deadlines and keep up with project progress in real time.

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IMAGES

  1. Matrix Organization Structure PowerPoint Template & Slides

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  3. Matrix Organizational Structure : A Detailed Guide [New]

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  4. Matrix Organizational Structure in Project Management– A Complete Guide

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  5. What Is a Matrix Organization and How Does It Work? • Asana

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  6. 12 RACI Matrix Presentation Charts Templates with Project

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  1. Lesson 8 -- (2.1) Matrix Operations

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COMMENTS

  1. What is a matrix organization and how does it work?

    July 7th, 2023 6 min read Jump to section Summary A matrix organization is a company structure where teams report to multiple leaders. The matrix design keeps open communication between teams and can help companies create more innovative products and services.

  2. Matrix Organizational Structure: Pros and Cons for Using It

    The matrix organizational structure is a combination of two or more different kinds of organizational structures, such as project management or functional management.

  3. How to Make a Responsibility Assignment Matrix (Template Included)

    A responsibility assignment matrix (RAM) is a project management chart used to identify and define the various people and organizations and outline each of their roles in working on tasks or delivering a part of the project.

  4. The Matrix Organization

    A matrix organization is defined as one in which there is dual or multiple managerial accountability and responsibility. However, the term matrix means quite different things to different people and in different industries (1) (5).

  5. 4 Matrix Organizational Structure Examples (+Templates)

    November 22, 2022 8min read Table of Contents What is a Matrix Organizational Structure? How Does a Matrix Organizational Structure Operate and What Are the Benefits? 4 Matrix Organizational Structures Use-Cases and Examples 1. Philips example 2. Starbucks example 3. Engineering and marketing department

  6. Matrix Organizational Structure: Advantages & Disadvantages

    A matrix organizational structure is a company structure where the reporting ladder is in a matrix or grid instead of the traditional hierarchy. This structure means that workers simultaneously report to a functional manager and a product manager.

  7. Matrix Organizational Structure 101: A Comprehensive Guide

    Roles Within The Matrix Organizational Structure ‍ 1. Managerial roles ‍ The managerial roles across the matrix structure are the primary focus of this model - while a functional manager forms part of the common model of working adopted by most companies, it is the flexibility of the role and responsibility of a project manager that sets this model above others.

  8. How to Make Your Matrix Organization Really Work

    Shifting the reporting structure to a matrix model has its challenges, but leaders can find success by focusing on four key elements. Much has been written about why matrix organizations are needed and what they look like at a surface level. Far less advice is available about what it takes to make them work. This information gap sets many teams ...

  9. Matrix Organizational Structure Guide with Examples

    An example of successful implementation of matrix organizational structure. Philips Electronics is one of the earliest and most well-known examples of a company that successfully implemented the matrix structure. As a result, the company achieved improved financial performance and increased competitiveness.

  10. What is a Matrix Organization and How Does It Work?

    Choosing an organizational structure is paramount, with broad implications for operations, culture, and growth. As we've traversed the multifaceted realm of the matrix organization, the salient takeaway is its unique blend of adaptability and structure. However, its success hinges on diligent implementation, continuous assessment, and ...

  11. Matrix Organizational Structure: Complexity and Efficiency

    at Motion Jun 13, 2023 A traditional hierarchy structure in business is dead. The rigid operation is slowing down businesses and not allowing for Agile management. Enter the matrix organization structure. This structure provides many benefits to organizations working on cross-functional projects, including flexibility.

  12. Making the most of the matrix organization

    Matrix organizations have been around for decades, stimulating vigorous debate between supporters and detractors for nearly as long. 1," They remain prevalent at the large number of companies that need to bring functional centers of excellence together with business-specific people and processes.

  13. 8 Skills You Need To Lead Successfully In A Matrix Organization

    The matrix organizational structure, first coined from the US space program in the mid-1900s, is a classic example of such a shift. Matrix environments exist when teams have more than one...

  14. 6 Advantages and Disadvantages of a Matrix Organizational Structure

    Because you bring together a group of people to tackle a specific project, assignments are never permanent. This kind of flexibility results in: Employee Skill Development: In the matrix structure, employees can move between projects or teams as needed.

  15. Understanding Organizational Structures

    Five elements create an organizational structure: job design, departmentation, delegation, span of control and chain of command. These elements comprise an organizational chart and create the ...

  16. What is a matrix organization? Definition and example

    Definition and example A Matrix Organization has a complicated structure in which the reporting relationships are set up as a matrix - a grid - instead of the traditional vertical hierarchy. Employees in a matrix organization generally report to both a product or project manager as well as a functional manager (department head).

  17. Matrix Organizational Structure: Examples, Advantages, and Disadvantages

    September 1, 2022 I am sure that you might have heard of the matrix organizational structure, which is the most popular organizational structure adopted by medium to large organizations. They like this type of organizational structure as it provides the flexibility required to run their operations.

  18. Responsibility assignment matrix

    Responsibility assignment matrix. In business and project management, a responsibility assignment matrix [1] ( RAM ), also known as RACI matrix [2] ( / ˈreɪsi /) or linear responsibility chart [3] ( LRC ), is a model that describes the participation by various roles in completing tasks or deliverables [4] for a project or business process.

  19. RACI Matrix: Responsibility Assignment Matrix Guide for 2024

    The matrix defines clear roles and responsibilities for individual team members across the various phases of the project, breaking each role down into four types of designation: those who are Responsible and Accountable for project deliverables, those who should be Consulted as work begins, and stakeholders who need to be Informed of ongoing pro...

  20. 19 Advantages and Disadvantages of Matrix Organizational Structure

    A matrix organizational structure is an organizational-based foundation where the reporting relationships get set up as a grid. That means the traditional hierarchy disappears in the chain-of-command. Instead of reporting to a single supervisor or manager, employees have dual-reporting duties.

  21. 7 Organizational Structure Types (With Examples)

    What Is an Organizational Structure? 4 Common Types of Organizational Structures 3 Alternative Organizational Structures How To Choose the Best Organizational Structure Frequently Asked...

  22. Matrix Organisation: Meaning, Features, Suitability, Advantages and

    3. Project Teams: Matrix organisations create teams that bring together people from different departments to work on specific projects.These teams have members with various skills and knowledge to contribute. 4. Efficient Resource Allocation: A key benefit of a matrix organisation is that resources can be shared across different projects. This helps the organisation make the best use of ...

  23. Responsibility Assignment Matrix with Excel RACI Template

    A responsibility assignment matrix (RAM) is a tool used in project management to clarify team and stakeholder roles for each project step. It paves the way for smooth collaboration by ensuring everyone knows what they need to do, who they need to talk to, and who has the final say on key decisions and deliverables.

  24. Manage your Microsoft 365 subscription or Office product

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