An organizational structure that facilitates the horizontal flow of skills and information. It is used mainly in the management of large projects or product development processes, drawing employees from different functional disciplines for assignment to a team without removing them from their respective positions.
Employees in a matrix organization report on day-to-day performance to the project or product manager whose authority flows sideways (horizontally) across departmental boundaries. They also continue to report on their overall performance to the head of their department whose authority flows downwards (vertically) within his or her department. ...view middle of the document...
So, the authority flows downwards and across. Therefore, it is called "Matrix Organisation".
An example of matrix organisation is shown in the following diagram:-
Features of Matrix Organisation
The pecularities or characteristics or features of a matrix organisation are:-
Hybrid Structure : Matrix organisation is a hybrid structure. This is so, because it is a combination of two or more organisation structures. It combines functional organisation with a project organisation. Therefore, it has the merits and demerits of both these organisation structures.
Functional Manager : The Functional Manager has authority over the technical (functional) aspects of the project.
The responsibilities of functional manager are:-
He decides how to do the work.
He distributes the project work among his subordinates.
He looks after the operational aspects.
Project Manager : The Project manager has authority over the administrative aspects of the project. He has full authority over the financial and physical resources which he can use for completing the project.
The responsibilities of project manager are:-
He decides what to do.
He is responsible for scheduling the project work.
He co-ordinates the activities of the different functional members.
He evaluates the project performance.
Problem of Unity of Command : In a matrix organisation, there is a problem of the unity of command. This is so, because the subordinates receive orders from two bosses viz., the Project Manager and the Functional Manager. This will result in confusion, disorder, indiscipline, inefficiency, etc. All this will reduce the productivity and profitability of the project.
Specialisation : In a Matrix organisation, there is a specialisation. The project manager concentrates on the administrative aspects of the project while the functional manager concentrates on the technical aspects of the project.
Suitability : Matrix organisation is suitable for multi-project organisations. It is mainly used by large construction companies, that construct huge residential and commercial projects in different places at the same time. Each project is looked after (handled) by a project manager. He is supported by many functional managers and employees of the company.
Advantages of Matrix Organisation
The benefits or merits or advantages of a matrix organisation are:-
Sound Decisions : In a Matrix Organisation, all decisions are taken by experts. Therefore, the decision are very good.
Development of Skills :
It helps the employees to widen their skills. Marketing people can learn about finance,...