Matrix Organizations - Revision history

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	''Article developed by Linda Zviedre''		''Article developed by Linda Zviedre''

	The article offers the reader an insight into an organizational structure that allows cross-functional collaboration for better resource allocation. Matrix structure is relevant for project, program, and portfolio managers, however, matrix organizations are mostly associated with different projects and the structure helps defining the boundaries between the authority of managers, budget allocation, as well as initiating a smooth information flow.		The article offers the reader an insight into a concept called matrix organization - an organizational structure that allows cross-functional collaboration for better resource allocation. Matrix structure is relevant for project, program, and portfolio managers, however, matrix organizations are mostly associated with different projects and the structure helps defining the boundaries between the authority of managers, budget allocation, as well as initiating a smooth information flow.

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	''Article developed by Linda Zviedre''		''Article developed by Linda Zviedre''

	The article offers the reader an insight into an organizational structure that allows cross-functional collaboration for better resource allocation. Matrix structure is relevant for project, program, and portfolio managers, however, matrix organizations are mostly associated with different projects and the structure helps ~~definining~~ the boundaries between the authority of managers, budget allocation, as well as initiating a smooth information flow.		The article offers the reader an insight into an organizational structure that allows cross-functional collaboration for better resource allocation. Matrix structure is relevant for project, program, and portfolio managers, however, matrix organizations are mostly associated with different projects and the structure helps defining the boundaries between the authority of managers, budget allocation, as well as initiating a smooth information flow.

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	The management of matrix organizations obliges the teams to co-operate and communicate both within the project team and functional organization. An overview of the matrix structure types and project characteristics is illustrated in Figure 2 <ref name = "PMBOK"/>.		The management of matrix organizations obliges the teams to co-operate and communicate both within the project team and functional organization. An overview of the matrix structure types and project characteristics is illustrated in Figure 2 <ref name = "PMBOK"/>.

	[[File:Matrix-characteristics.png\|~~frame~~\|Figure 2. An overview of project characteristics in matrix organizations. Adapted from Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide) <ref name = "PMBOK"/>.]]		[[File:Matrix-characteristics.png\|thumb\|600px\|Figure 2. An overview of project characteristics in matrix organizations. Adapted from Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide) <ref name = "PMBOK"/>.]]

	From three types of matrix organizations, the ''weak matrix'' has low project manager’s authority, and mostly the authority comes from functional management. Resource availability is low and the project’s budget holder is the functional manager. The project manager’s role and their administrative staff are part-time. The staff reports to their functional manager (for example, IT Team A reports to the IT functional department manager).		From three types of matrix organizations, the ''weak matrix'' has low project manager’s authority, and mostly the authority comes from functional management. Resource availability is low and the project’s budget holder is the functional manager. The project manager’s role and their administrative staff are part-time. The staff reports to their functional manager (for example, IT Team A reports to the IT functional department manager).

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Overview of matrix types and characteristics

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	==Overview of matrix types and characteristics==		==Overview of matrix types and characteristics==

	~~Matrix~~ management obliges the teams to co-operate and communicate both within the project team and functional organization. An overview of the matrix types and project characteristics is illustrated in Figure 2 <ref name = "PMBOK"/>.		The management of matrix organizations obliges the teams to co-operate and communicate both within the project team and functional organization. An overview of the matrix structure types and project characteristics is illustrated in Figure 2 <ref name = "PMBOK"/>.

	[[File:Matrix-characteristics.png\|frame\|Figure 2. An overview of project characteristics in matrix organizations. Adapted from Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide) <ref name = "PMBOK"/>.]]		[[File:Matrix-characteristics.png\|frame\|Figure 2. An overview of project characteristics in matrix organizations. Adapted from Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide) <ref name = "PMBOK"/>.]]

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	[[File:MatrixOrganizations.png\|thumb\|500px\| Figure 1. A general organization with a matrix structure. Adapted from Moodley et al. (2015) <ref> Moodley, D., Sutherland, M., & Pretorius, P. (2016). Comparing the power and influence of functional managers with that of project managers in matrix organisations: The challenge in duality of command. South African Journal of Economic and Management Sciences, 19(1), 103–117. https://doi.org/10.4102/sajems.v19i1.1308 </ref>]]

	==Abstract==		==Abstract==

	An organization can be defined as a group of people who work together in an organized way for a shared purpose <ref> Cambridge Dictionary. (n.d.). Citation. In Cambridge English Dictionary. Retrieved February 11, 2022 from https://dictionary.cambridge.org/dictionary/english/organization. </ref>. The way an organization is structured can affect the number of resources available for the organization as well as how different projects are carried out <ref name = "PMBOK">Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Fifth Edition ed., Pennsylvania: Project Management Institute, Inc., 2013. </ref>. At the beginning of the 20th century, many organizations obtained their ways of working, either by structuring their work with a larger focus on projects (projectized structure) or groups with similar roles and expertise (functional structure). In the 1960s aerospace organizations saw a need of adopting a new approach that would combine the knowledge from various industries, and the third approach, called matrix organization, was found.		An organization can be defined as a group of people who work together in an organized way for a shared purpose <ref> Cambridge Dictionary. (n.d.). Citation. In Cambridge English Dictionary. Retrieved February 11, 2022 from https://dictionary.cambridge.org/dictionary/english/organization. </ref>. The way an organization is structured can affect the number of resources available for the organization as well as how different projects are carried out <ref name = "PMBOK">Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Fifth Edition ed., Pennsylvania: Project Management Institute, Inc., 2013. </ref>. At the beginning of the 20th century, many organizations obtained their ways of working, either by structuring their work with a larger focus on projects (projectized structure) or groups with similar roles and expertise (functional structure). In the 1960s aerospace organizations saw a need of adopting a new approach that would combine the knowledge from various industries, and the third approach, called matrix organization, was found.

			[[File:MatrixOrganizations.png\|thumb\|400px\| Figure 1. A general organization with a matrix structure. Adapted from Moodley et al. (2015) <ref> Moodley, D., Sutherland, M., & Pretorius, P. (2016). Comparing the power and influence of functional managers with that of project managers in matrix organisations: The challenge in duality of command. South African Journal of Economic and Management Sciences, 19(1), 103–117. https://doi.org/10.4102/sajems.v19i1.1308 </ref>]]

	Project Management Institute defines Matrix Organization as ''any organizational structure in which the project manager shares responsibility with the functional managers for assigning priorities and for directing the work of persons assigned to the project'' <ref name = "PMBOK"/>. This means that in matrix organizations there are generally two managers to report to, and the managers must collaborate for better resource allocation, as well as knowledge-sharing. Matrix organizational structure is commonly applied when an organization is focusing on projects and technical support across different functions and fields is needed <ref name = "Kuprenas"> Kuprenas, John A. Implementation and performance of a matrix organization structure. International Journal of Project Management 21 (2003), p.51-62 </ref>. An illustration of an organization with a matrix structure is shown in Figure 1.		Project Management Institute defines Matrix Organization as ''any organizational structure in which the project manager shares responsibility with the functional managers for assigning priorities and for directing the work of persons assigned to the project'' <ref name = "PMBOK"/>. This means that in matrix organizations there are generally two managers to report to, and the managers must collaborate for better resource allocation, as well as knowledge-sharing. Matrix organizational structure is commonly applied when an organization is focusing on projects and technical support across different functions and fields is needed <ref name = "Kuprenas"> Kuprenas, John A. Implementation and performance of a matrix organization structure. International Journal of Project Management 21 (2003), p.51-62 </ref>. An illustration of an organization with a matrix structure is shown in Figure 1.

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	[[File:MatrixOrganizations.png\|thumb\|500px\| Figure 1. A general organization with matrix structure. Adapted from Moodley et al. (2015) <ref> Moodley, D., Sutherland, M., & Pretorius, P. (2016). Comparing the power and influence of functional managers with that of project managers in matrix organisations: The challenge in duality of command. South African Journal of Economic and Management Sciences, 19(1), 103–117. https://doi.org/10.4102/sajems.v19i1.1308 </ref>]]		''Article developed by Linda Zviedre''

			The article offers the reader an insight into an organizational structure that allows cross-functional collaboration for better resource allocation. Matrix structure is relevant for project, program, and portfolio managers, however, matrix organizations are mostly associated with different projects and the structure helps definining the boundaries between the authority of managers, budget allocation, as well as initiating a smooth information flow.



			[[File:MatrixOrganizations.png\|thumb\|500px\| Figure 1. A general organization with a matrix structure. Adapted from Moodley et al. (2015) <ref> Moodley, D., Sutherland, M., & Pretorius, P. (2016). Comparing the power and influence of functional managers with that of project managers in matrix organisations: The challenge in duality of command. South African Journal of Economic and Management Sciences, 19(1), 103–117. https://doi.org/10.4102/sajems.v19i1.1308 </ref>]]

	==Abstract==		==Abstract==

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	==Strengths and weaknesses of matrix organizations==		==Strengths and weaknesses of matrix organizations==

	There are contradicting opinions on the different strengths and weaknesses of matrix organizations. Research suggests that different authors can see the same characteristic of a matrix organization both as a strength and a weakness <ref name = "PL"> Goś, K. (2015). The Key Advantages and Disadvantages of Matrix Organizational Structures. Studia i Materiały Wydziału Zarządzania UW, 2015(2), 66–83. https://doi.org/10.7172/1733-9758.2015.19.5 </ref>. The main advantages associated with the matrix organizational structure include efficiency, both in terms of resource allocation and information flow. Staff can be fully sourced to a project and also contribute to other parts of the organization, such as their functional department or other projects. The information flow is more transparent, allowing the organization to share the knowledge and see the progress of each functional team. Matrix organizations are also possessing stronger project characteristics, since the structure allows for better project management practices <ref name = "SW"> Cristóbal, J. S., Fernández, V., & Diaz, E. (2018). An analysis of the main project organizational structures: Advantages, disadvantages, and factors affecting their selection. Procedia Computer Science, 138, 791–798. https://doi.org/10.1016/j.procs.2018.10.103 </ref>.		There are contradicting opinions on the different strengths and weaknesses of matrix organizations. Research suggests that different authors can see the same characteristic of a matrix organization both as a strength and a weakness <ref name = "PL"> Goś, K. (2015). The Key Advantages and Disadvantages of Matrix Organizational Structures. Studia i Materiały Wydziału Zarządzania UW, 2015(2), 66–83. https://doi.org/10.7172/1733-9758.2015.19.5 </ref>. The main advantages associated with the matrix organizational structure include efficiency, both in terms of resource allocation and information flow. Staff can be fully sourced to a project and also contribute to other parts of the organization, such as their functional department or other projects. The information flow is more transparent, allowing the organization to share the knowledge and see the progress of each functional team. Matrix organizations are also possessing stronger project characteristics, since the structure allows for better project management practices <ref name = "SW"> Cristóbal, J. S., Fernández, V., & Diaz, E. (2018). An analysis of the main project organizational structures: Advantages, disadvantages, and factors affecting their selection. Procedia Computer Science, 138, 791–798. https://doi.org/10.1016/j.procs.2018.10.103 </ref>. Lastly, the project manager has a great responsibility in managing their team which requires them to be trained to work in cross-functional teams. Matrix structure offers the project manager not only large responsibility for the budget and tasks but also the staff that works for the project with them. It is an opportunity to learn more about managing different teams and collaborating across functions.

	Because matrix organizations involve a lot of planning around administrative changes and staff resource allocation, the main disadvantage is the high administrative costs. However, if the matrix organization is mature, the additional overhead costs even out due to an increase in efficiency <ref> C.J. Middleton, “How to Set Up a Project Organization,” HBR March–April 1967, p. 73. </ref>. Another disadvantage of matrix organization is connected to the conflicts that can potentially arise in such a setup. Because matrix organizations involve a line and project reporting manager, it can potentially cause a conflict if the expectations and conflict management are not clearly defined <ref name = "SW"/>. This essentially means that staff must understand how the managers work together as well as how the reporting must be executed. If there are no clear guidelines and objectives in how conflicts are mitigated, the organization can face difficulties managing the staff and their progress. Lastly, staff in matrix organizations can also work on several projects at the same time, causing a disadvantage in understanding who the employee must report to. This means that an employee spends fewer resources on one project, at the same time being excessively utilized in several projects at the same time.		Because matrix organizations involve a lot of planning around administrative changes and staff resource allocation, the main disadvantage is the high administrative costs. However, if the matrix organization is mature, the additional overhead costs even out due to an increase in efficiency <ref> C.J. Middleton, “How to Set Up a Project Organization,” HBR March–April 1967, p. 73. </ref>. Another disadvantage of matrix organization is connected to the conflicts that can potentially arise in such a setup. Because matrix organizations involve a line and project reporting manager, it can potentially cause a conflict if the expectations and conflict management are not clearly defined <ref name = "SW"/>. This essentially means that staff must understand how the managers work together as well as how the reporting must be executed. If there are no clear guidelines and objectives in how conflicts are mitigated, the organization can face difficulties managing the staff and their progress. Lastly, staff in matrix organizations can also work on several projects at the same time, causing a disadvantage in understanding who the employee must report to. This means that an employee spends fewer resources on one project, at the same time being excessively utilized in several projects at the same time.

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Strengths and weaknesses of matrix organizations

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	There are contradicting opinions on the different strengths and weaknesses of matrix organizations. Research suggests that different authors can see the same characteristic of a matrix organization both as a strength and a weakness <ref name = "PL"> Goś, K. (2015). The Key Advantages and Disadvantages of Matrix Organizational Structures. Studia i Materiały Wydziału Zarządzania UW, 2015(2), 66–83. https://doi.org/10.7172/1733-9758.2015.19.5 </ref>. The main advantages associated with the matrix organizational structure include efficiency, both in terms of resource allocation and information flow. Staff can be fully sourced to a project and also contribute to other parts of the organization, such as their functional department or other projects. The information flow is more transparent, allowing the organization to share the knowledge and see the progress of each functional team. Matrix organizations are also possessing stronger project characteristics, since the structure allows for better project management practices <ref name = "SW"> Cristóbal, J. S., Fernández, V., & Diaz, E. (2018). An analysis of the main project organizational structures: Advantages, disadvantages, and factors affecting their selection. Procedia Computer Science, 138, 791–798. https://doi.org/10.1016/j.procs.2018.10.103 </ref>.		There are contradicting opinions on the different strengths and weaknesses of matrix organizations. Research suggests that different authors can see the same characteristic of a matrix organization both as a strength and a weakness <ref name = "PL"> Goś, K. (2015). The Key Advantages and Disadvantages of Matrix Organizational Structures. Studia i Materiały Wydziału Zarządzania UW, 2015(2), 66–83. https://doi.org/10.7172/1733-9758.2015.19.5 </ref>. The main advantages associated with the matrix organizational structure include efficiency, both in terms of resource allocation and information flow. Staff can be fully sourced to a project and also contribute to other parts of the organization, such as their functional department or other projects. The information flow is more transparent, allowing the organization to share the knowledge and see the progress of each functional team. Matrix organizations are also possessing stronger project characteristics, since the structure allows for better project management practices <ref name = "SW"> Cristóbal, J. S., Fernández, V., & Diaz, E. (2018). An analysis of the main project organizational structures: Advantages, disadvantages, and factors affecting their selection. Procedia Computer Science, 138, 791–798. https://doi.org/10.1016/j.procs.2018.10.103 </ref>.

	Because matrix organizations involve a lot of planning around administrative changes and staff resource allocation, the main disadvantage is the high administrative costs. However, if the matrix organization is mature, the additional overhead costs even out due to an increase in efficiency <ref> C.J. Middleton, “How to Set Up a Project Organization,” HBR March–April 1967, p. 73. </ref>. ~~The~~ matrix organization ~~involves~~ a line and project reporting manager, ~~which~~ can potentially cause a conflict if the expectations and conflict management are not clearly defined <ref name = "SW"/>. This essentially ~~can mean~~ that staff must understand how the managers work together as well as how the reporting must be executed. ~~Staff~~ in matrix organizations can also work on several projects at the same time, causing a disadvantage in understanding who to report to.		Because matrix organizations involve a lot of planning around administrative changes and staff resource allocation, the main disadvantage is the high administrative costs. However, if the matrix organization is mature, the additional overhead costs even out due to an increase in efficiency <ref> C.J. Middleton, “How to Set Up a Project Organization,” HBR March–April 1967, p. 73. </ref>. Another disadvantage of matrix organization is connected to the conflicts that can potentially arise in such a setup. Because matrix organizations involve a line and project reporting manager, it can potentially cause a conflict if the expectations and conflict management are not clearly defined <ref name = "SW"/>. This essentially means that staff must understand how the managers work together as well as how the reporting must be executed. If there are no clear guidelines and objectives in how conflicts are mitigated, the organization can face difficulties managing the staff and their progress. Lastly, staff in matrix organizations can also work on several projects at the same time, causing a disadvantage in understanding who the employee must report to. This means that an employee spends fewer resources on one project, at the same time being excessively utilized in several projects at the same time.


	==How to make the matrix organization work==		==How to make the matrix organization work==

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How to make the matrix organization work

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	# Build a Culture of Trust. Matrix structure involves multiple managers and teamwork, therefore nurturing the trust within the organization is essential. When the culture of trust is not built, the teams are directly affected by problems of conflicts and mistrust in the organization as such. McPhail suggests several tools that can enhance trust, for example, project kickoff meetings, personality assessments of project teams, social events, intrinsic and extrinsic rewards, and tracking of the project success.		# Build a Culture of Trust. Matrix structure involves multiple managers and teamwork, therefore nurturing the trust within the organization is essential. When the culture of trust is not built, the teams are directly affected by problems of conflicts and mistrust in the organization as such. McPhail suggests several tools that can enhance trust, for example, project kickoff meetings, personality assessments of project teams, social events, intrinsic and extrinsic rewards, and tracking of the project success.

	Adopting these six principles can improve the matrix organization in a business. However, it is not enough to adopt the principles once and think that the organization will succeed. The collaboration between different managers and their teams should be run smoothly and potential conflicts and their action plan must be discussed. Continuous improvement over the organizational work as well as reviewing the principles is required for making the matrix organization work.		Adopting these six principles can improve the matrix organization in a business. However, it is not enough to adopt the principles once and think that the organization will succeed. Davis and Lawrence (1977) imply that "a successful matrix must be grown instead of installed" <ref>Lawrence, P. R., Kolodny, H. F., & Davis, S. M. (1977). The human side of the matrix. Organizational Dynamics, 6(1), 43–61. https://doi.org/10.1016/0090-2616(77)90034-1</ref>. The organization must create grounds for matrix organization and build around it, allowing for flexibility of changes and structure associated with the organization itself rather than the generic model of implementation. The collaboration between different managers and their teams should be run smoothly and potential conflicts and their action plan must be discussed. Continuous improvement over the organizational work as well as reviewing the principles is required for making the matrix organization work.

	== Conclusion==		== Conclusion==