Matrix organizations - Revision history

Msorensen: /* Abstract */

2023-05-09T21:19:23Z

Abstract

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	== Abstract ==		== Abstract ==
	A matrix organization utilizes matrix management as its primary organizational structure. Within such an organization, employees have dual reporting relationships and thus report along two central chains of command. Typically, these are represented by a chain of functional value and another representing a project, product, client or market. <ref name="~~stuckenbruck~~">Stuckenbruck, L. C. (1979). ''The Matrix Organization''. Project Management Quarterly, 10(3), 21–33</ref> Within a matrix organization, an employee is associated with a functional manager and a project manager. While the functional manager is responsible for the expertise and technical skills of the employees, the project manager is responsible for delivering targeted project outcomes by utilization of those skills. In this manner, the titular matrix is comprised by the various intersections along the two chains of command. Matrix management differs from the similar multidimensional management style, in which many simultaneous dimensions are considered beyond the functional and e.g. client-oriented ones.		A matrix organization utilizes matrix management as its primary organizational structure. Within such an organization, employees have dual reporting relationships and thus report along two central chains of command. Typically, these are represented by a chain of functional value and another representing a project, product, client or market. <ref name="Stuckenbruck">Stuckenbruck, L. C. (1979). ''The Matrix Organization''. Project Management Quarterly, 10(3), 21–33</ref> Within a matrix organization, an employee is associated with a functional manager and a project manager. While the functional manager is responsible for the expertise and technical skills of the employees, the project manager is responsible for delivering targeted project outcomes by utilization of those skills. In this manner, the titular matrix is comprised by the various intersections along the two chains of command. Matrix management differs from the similar multidimensional management style, in which many simultaneous dimensions are considered beyond the functional and e.g. client-oriented ones.

	Due to the dual reporting relationship of each employee, the exact organizational form varies depending on the balance of power between the two managers. This balance is described from the perspective of the project manager, and can be either weak, balanced or strong, depending on the amount of authority they hold over the project compared to that of the functional manager.		Due to the dual reporting relationship of each employee, the exact organizational form varies depending on the balance of power between the two managers. This balance is described from the perspective of the project manager, and can be either weak, balanced or strong, depending on the amount of authority they hold over the project compared to that of the functional manager.

Msorensen: /* Annotated bibliography */

2023-05-09T21:19:03Z

Annotated bibliography

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	== Annotated bibliography ==		== Annotated bibliography ==
	'''Stuckenbruck, L. C. (1979). ''The Matrix Organization''. Project Management Quarterly, 10(3), 21–33.'''		'''Stuckenbruck, L. C. (1979). ''The Matrix Organization''. Project Management Quarterly, 10(3), 21–33.'''<ref name="Stuckenbruck"/>
	This article by Linn C. Stuckenbruck constitutes some of the Project Management Institutes official academic literature on matrix organizations. It provides a general overview of the concept and presents a series of reflections on the advantages and disadvantages of matrix structures.		This article by Linn C. Stuckenbruck constitutes some of the Project Management Institutes official academic literature on matrix organizations. It provides a general overview of the concept and presents a series of reflections on the advantages and disadvantages of matrix structures.

	'''Galbraith, J. R. (2009). ''Designing Matrix Organizations That Actually Work: How IBM, Procter & Gamble and Others Design for Success.''''' This book by Jay R. Galbraith describes some of the earliest implementations matrix organizations in the 1960s and 1970s. At the time of writing this book, Galbraith had worked in the field of organizational management for over 40 years, thus giving unique insight into both the history of matrix organizations as well as the companies he has consulted for over the span of his career. Galbraith's work is widely cited within the field of project, program and portfolio management.		'''Galbraith, J. R. (2009). ''Designing Matrix Organizations That Actually Work: How IBM, Procter & Gamble and Others Design for Success.'''''<ref name="Galbraith"/> This book by Jay R. Galbraith describes some of the earliest implementations matrix organizations in the 1960s and 1970s. At the time of writing this book, Galbraith had worked in the field of organizational management for over 40 years, thus giving unique insight into both the history of matrix organizations as well as the companies he has consulted for over the span of his career. Galbraith's work is widely cited within the field of project, program and portfolio management.

	'''Goś, K. (2015). ''The Key Advantages and Disadvantages of Matrix Organizational Structures.'' Stud. i Mater. Wydz. Zarządzania UW 2015. 66–83.''' This literary review by Krzysztof Gós consolidates a wide range of academic literature on the subject of matrix organizations and compares many of the key findings from the research conducted in the field. It summarizes a series of key points that have been used as KPIs in this article.		'''Goś, K. (2015). ''The Key Advantages and Disadvantages of Matrix Organizational Structures.'' Stud. i Mater. Wydz. Zarządzania UW 2015. 66–83.'''<ref name="Gos"/> This literary review by Krzysztof Gós consolidates a wide range of academic literature on the subject of matrix organizations and compares many of the key findings from the research conducted in the field. It summarizes a series of key points that have been used as KPIs in this article.

	== References ==		== References ==
	<references/>		<references/>

Msorensen: /* Abstract */

2023-05-09T21:17:56Z

Abstract

← Older revision		Revision as of 21:17, 9 May 2023
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	== Abstract ==		== Abstract ==
	A matrix organization utilizes matrix management as its primary organizational structure. Within such an organization, employees have dual reporting relationships and thus report along two central chains of command. Typically, these are represented by a chain of functional value and another representing a project, product, client or market. <ref name=''stuckenbruck''>Stuckenbruck, L. C. (1979). ''The Matrix Organization''. Project Management Quarterly, 10(3), 21–33</ref> Within a matrix organization, an employee is associated with a functional manager and a project manager. While the functional manager is responsible for the expertise and technical skills of the employees, the project manager is responsible for delivering targeted project outcomes by utilization of those skills. In this manner, the titular matrix is comprised by the various intersections along the two chains of command. Matrix management differs from the similar multidimensional management style, in which many simultaneous dimensions are considered beyond the functional and e.g. client-oriented ones.		A matrix organization utilizes matrix management as its primary organizational structure. Within such an organization, employees have dual reporting relationships and thus report along two central chains of command. Typically, these are represented by a chain of functional value and another representing a project, product, client or market. <ref name="stuckenbruck">Stuckenbruck, L. C. (1979). ''The Matrix Organization''. Project Management Quarterly, 10(3), 21–33</ref> Within a matrix organization, an employee is associated with a functional manager and a project manager. While the functional manager is responsible for the expertise and technical skills of the employees, the project manager is responsible for delivering targeted project outcomes by utilization of those skills. In this manner, the titular matrix is comprised by the various intersections along the two chains of command. Matrix management differs from the similar multidimensional management style, in which many simultaneous dimensions are considered beyond the functional and e.g. client-oriented ones.

	Due to the dual reporting relationship of each employee, the exact organizational form varies depending on the balance of power between the two managers. This balance is described from the perspective of the project manager, and can be either weak, balanced or strong, depending on the amount of authority they hold over the project compared to that of the functional manager.		Due to the dual reporting relationship of each employee, the exact organizational form varies depending on the balance of power between the two managers. This balance is described from the perspective of the project manager, and can be either weak, balanced or strong, depending on the amount of authority they hold over the project compared to that of the functional manager.

Msorensen: /* Implementation and maintenance */

2023-05-09T21:17:31Z

Implementation and maintenance

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	When matrix management was first utilized by commercial companies in the early 1970s, the transition to a matrix structure would often fail. According to Jay R. Galbraith, ''organizational structure do not fail; management fail at implement them correctly.''<ref name="Galbraith"/> Companies would incorporate the principles of a matrix organization without first determining whether the organizational strategy applied to them. According to Vantrappen & Wirtz, there are at least five steps to implementing a matrix structure within an existing organization.<ref name="VantrappenWirtz">Vantrappen, H. & Wirtz, F. (2016) ''Making matrix organizations actually work.'' Harvard Business Review; 2 (3), 14-27.</ref>		When matrix management was first utilized by commercial companies in the early 1970s, the transition to a matrix structure would often fail. According to Jay R. Galbraith, ''organizational structure do not fail; management fail at implement them correctly.''<ref name="Galbraith"/> Companies would incorporate the principles of a matrix organization without first determining whether the organizational strategy applied to them. According to Vantrappen & Wirtz, there are at least five steps to implementing a matrix structure within an existing organization.<ref name="VantrappenWirtz">Vantrappen, H. & Wirtz, F. (2016) ''Making matrix organizations actually work.'' Harvard Business Review; 2 (3), 14-27.</ref>

	* '''Adopt only if ~~purposeful~~.''' A matrix should never be the default structure of an organization, but rather grown organically from within to accommodate two conditions. The first is a daily necessity to coordinate on project related tasks between two or more business units. Secondly, a matrix structure should not be enforced if the first condition can be met by soft meetings.		* '''Adopt only if useful.''' A matrix should never be the default structure of an organization, but rather grown organically from within to accommodate two conditions. The first is a daily necessity to coordinate on project related tasks between two or more business units. Secondly, a matrix structure should not be enforced if the first condition can be met by soft meetings.

	* '''Avoid intrinsic conflict.''' Research indicates that the risk of internal conflict in matrix organizations is directly related to the nature of the collaborating teams. For example, a hierarchal junction between Product and Function related teams will be less prone to conflict since these roles are more complementary and the management flows more diversified. When defining the roles of the matrix’s two dimensions, ensure that there exists intrinsic value in collaborating rather than competing.		* '''Avoid intrinsic conflict.''' Research indicates that the risk of internal conflict in matrix organizations is directly related to the nature of the collaborating teams. For example, a hierarchal junction between Product and Function related teams will be less prone to conflict since these roles are more complementary and the management flows more diversified. When defining the roles of the matrix’s two dimensions, ensure that there exists intrinsic value in collaborating rather than competing.

Msorensen: /* Limitations */

2023-05-09T21:16:52Z

Limitations

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	== Limitations ==		== Limitations ==
	Although matrix organizational structures offer a range of substantial benefits within functional operation and project management, they may also cause communication-related issues if not executed correctly. These issues may in some instances encompass substantial risks, as well as potential coordination controversies between departments and call into question the overall power dynamics of the organization. Some studies suggest that a matrix organizational structure may particularly affect coordination in situations where there is a lack of clarity surrounding the division of decision-making roles within the organizational hierarchy.<ref name="Gos"/> One report indicates that in spite of allegedly improving internal collaboration, a transition to a matrix structure increases the level of conflict by 75%.<ref name="Whitford">"Whitford, A. B." (2006) "Unitary, Divisional and Matrix Forms as Political Governance Systems." Journal of Management Governance, 10. 435–454.</ref> The specific context of the implementation, as well as the goals of the organization, should therefore always be considered in comparison to the general benefit that the matrix-divided decision structure can provide. As previously mentioned, a sound strategy to understand and mitigate the risks associated with the implementation of a matrix organizational structure is to continuously monitor the effectiveness of decision-making and task management over time.		Although matrix organizational structures offer a range of substantial benefits within functional operation and project management, they may also cause communication-related issues if not executed correctly. These issues may in some instances encompass substantial risks, as well as potential coordination controversies between departments and call into question the overall power dynamics of the organization. Some studies suggest that a matrix organizational structure may particularly affect coordination in situations where there is a lack of clarity surrounding the division of decision-making roles within the organizational hierarchy.<ref name="Gos"/> One report indicates that in spite of allegedly improving internal collaboration, a transition to a matrix structure increases the level of conflict by 75%.<ref name="Whitford">Whitford, A. B. (2006). ''Unitary, Divisional and Matrix Forms as Political Governance Systems.'' Journal of Management Governance, 10. 435–454.</ref> The specific context of the implementation, as well as the goals of the organization, should therefore always be considered in comparison to the general benefit that the matrix-divided decision structure can provide. As previously mentioned, a sound strategy to understand and mitigate the risks associated with the implementation of a matrix organizational structure is to continuously monitor the effectiveness of decision-making and task management over time.

	===Power struggles and ambiguity===		===Power struggles and ambiguity===
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	{\| class="wikitable defaultcenter col1left" style="display: inline-table;"		{\| class="wikitable defaultcenter col1left" style="display: inline-table;"

	! Advantages<ref name="LarsonGobeli"> ''Larson, E., & Gobeli, D.'' (1987). ''Matrix Management: Contradictions and Insights''. California Management Review, 29, 126-138. https://doi.org/10.2307/41162135</ref> !! Weak !! Balanced !! Strong		! Advantages<ref name="LarsonGobeli">Larson, E., & Gobeli, D. (1987). ''Matrix Management: Contradictions and Insights''. California Management Review, 29, 126-138. https://doi.org/10.2307/41162135</ref> !! Weak !! Balanced !! Strong
	\|-		\|-
	\| Resource efficiency \|\| High \|\| High \|\| High		\| Resource efficiency \|\| High \|\| High \|\| High

Msorensen: /* Implementation and maintenance */

2023-05-09T21:15:58Z

Implementation and maintenance

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	===Implementation and maintenance===		===Implementation and maintenance===
	When matrix management was first utilized by commercial companies in the early 1970s, the transition to a matrix structure would often fail. According to Jay R. Galbraith, ''organizational structure do not fail; management fail at implement them correctly.''<ref name="Galbraith"> Companies would incorporate the principles of a matrix organization without first determining whether the organizational strategy applied to them. According to Vantrappen & Wirtz, there are at least five steps to implementing a matrix structure within an existing organization.<ref name="VantrappenWirtz">Vantrappen, H. & Wirtz, F. (2016) ''Making matrix organizations actually work.'' Harvard Business Review; 2 (3), 14-27.</ref>		When matrix management was first utilized by commercial companies in the early 1970s, the transition to a matrix structure would often fail. According to Jay R. Galbraith, ''organizational structure do not fail; management fail at implement them correctly.''<ref name="Galbraith"/> Companies would incorporate the principles of a matrix organization without first determining whether the organizational strategy applied to them. According to Vantrappen & Wirtz, there are at least five steps to implementing a matrix structure within an existing organization.<ref name="VantrappenWirtz">Vantrappen, H. & Wirtz, F. (2016) ''Making matrix organizations actually work.'' Harvard Business Review; 2 (3), 14-27.</ref>

	* '''Adopt only if purposeful.''' A matrix should never be the default structure of an organization, but rather grown organically from within to accommodate two conditions. The first is a daily necessity to coordinate on project related tasks between two or more business units. Secondly, a matrix structure should not be enforced if the first condition can be met by soft meetings.		* '''Adopt only if purposeful.''' A matrix should never be the default structure of an organization, but rather grown organically from within to accommodate two conditions. The first is a daily necessity to coordinate on project related tasks between two or more business units. Secondly, a matrix structure should not be enforced if the first condition can be met by soft meetings.

Msorensen: /* Implementation and maintenance */

2023-05-09T21:15:46Z

Implementation and maintenance

← Older revision		Revision as of 21:15, 9 May 2023
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	===Implementation and maintenance===		===Implementation and maintenance===
	When matrix management was first utilized by commercial companies in the early 1970s, the transition to a matrix structure would often fail. According to Jay R. Galbraith, ~~“organizational~~ structure do no fail; management fail at implement them correctly.” Companies would incorporate the principles of a matrix organization without first determining whether the organizational strategy applied to them. According to Vantrappen & Wirtz, there are at least five steps to implementing a matrix structure within an existing organization.<ref name="VantrappenWirtz">"Vantrappen, H. & Wirtz, F." (2016) "Making matrix organizations actually work." Harvard Business Review; 2 (3), 14-27.</ref>		When matrix management was first utilized by commercial companies in the early 1970s, the transition to a matrix structure would often fail. According to Jay R. Galbraith, ''organizational structure do not fail; management fail at implement them correctly.''<ref name="Galbraith"> Companies would incorporate the principles of a matrix organization without first determining whether the organizational strategy applied to them. According to Vantrappen & Wirtz, there are at least five steps to implementing a matrix structure within an existing organization.<ref name="VantrappenWirtz">Vantrappen, H. & Wirtz, F. (2016) ''Making matrix organizations actually work.'' Harvard Business Review; 2 (3), 14-27.</ref>

	* '''Adopt only if purposeful.''' A matrix should never be the default structure of an organization, but rather grown organically from within to accommodate two conditions. The first is a daily necessity to coordinate on project related tasks between two or more business units. Secondly, a matrix structure should not be enforced if the first condition can be met by soft meetings.		* '''Adopt only if purposeful.''' A matrix should never be the default structure of an organization, but rather grown organically from within to accommodate two conditions. The first is a daily necessity to coordinate on project related tasks between two or more business units. Secondly, a matrix structure should not be enforced if the first condition can be met by soft meetings.
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	* '''Avoid escalation.''' A well-functioning matrix organization should reduce upward reporting and accelerate decision-making. It is important to understand that the advantage of the matrix structure lies in compartmentalizing the decision power by aligning relevant actors within the organization, thereby resulting in highly specialized project management practices. Escalating issues or decisions to a higher managerial level than that of the operational principles would be inconsistent with the purpose of matrix organizations.		* '''Avoid escalation.''' A well-functioning matrix organization should reduce upward reporting and accelerate decision-making. It is important to understand that the advantage of the matrix structure lies in compartmentalizing the decision power by aligning relevant actors within the organization, thereby resulting in highly specialized project management practices. Escalating issues or decisions to a higher managerial level than that of the operational principles would be inconsistent with the purpose of matrix organizations.

	It is often best to transition slowly into a matrix structure and make continuous small adjustments, thus letting the organization mature into that of a matrix. Once a matrix structure has been established, it is important to consistently monitor effectiveness of eight key performance indicators (KPIs) over time: Managing complexity, communication effectiveness, output quality, cost-effectiveness, motivation and job satisfaction, decision-making effectiveness, balance of power and level of conflicts.<ref name="Gos">"Goś, K." (2015) "The Key Advantages and Disadvantages of Matrix Organizational Structures." Stud. i Mater. Wydz. Zarządzania UW 2015. 66–83. https://doi.org/10.7172/1733-9758.2015.19.5</ref>		It is often best to transition slowly into a matrix structure and make continuous small adjustments, thus letting the organization mature into that of a matrix. Once a matrix structure has been established, it is important to consistently monitor effectiveness of eight key performance indicators (KPIs) over time: Managing complexity, communication effectiveness, output quality, cost-effectiveness, motivation and job satisfaction, decision-making effectiveness, balance of power and level of conflicts.<ref name="Gos">Goś, K. (2015). ''The Key Advantages and Disadvantages of Matrix Organizational Structures.'' Stud. i Mater. Wydz. Zarządzania UW 2015. 66–83. https://doi.org/10.7172/1733-9758.2015.19.5</ref>

	== Limitations ==		== Limitations ==

Msorensen: /* Project, program and portfolio management */

2023-05-09T21:14:19Z

Project, program and portfolio management

← Older revision		Revision as of 21:14, 9 May 2023
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	===Project, program and portfolio management===		===Project, program and portfolio management===
	Matrix organizations are organically linked to project, program and portfolio management for several reasons. Generally, each junction point between the functional and project management-related chains of command can be considered as a self-contained project, with the dominant manager being defined by the categorization of the matrix structure’s strength. Matrix organizations can therefore be considered project-oriented		Matrix organizations are organically linked to project, program and portfolio management for several reasons. Generally, each junction point between the functional and project management-related chains of command can be considered as a self-contained project, with the dominant manager being defined by the categorization of the matrix structure’s strength. Matrix organizations can therefore be considered project-oriented.
	The Project Management Institute defines a portfolio as a collection of projects, programs or portfolios managed as a group to achieve one or more strategic objectives.<ref name="">"Project Management Institute." (2013) "Project Management Institute (PMI): The Standard for Portfolio Management." 4th ed., 16-18</ref> In the case of weak matrix organizations, the projects (or junctions) within the functional ladders can be regarded as portfolio components, with the departments constituting the portfolios. For example, the Research and Development department from the earlier examples has a project portfolio consisting of the products A, B and C.		The Project Management Institute defines a portfolio as a collection of projects, programs or portfolios managed as a group to achieve one or more strategic objectives.<ref name="PMI4">Project Management Institute (2013). ''Project Management Institute (PMI): The Standard for Portfolio Management.'' 4th ed., 16-18</ref> In the case of weak matrix organizations, the projects (or junctions) within the functional ladders can be regarded as portfolio components, with the departments constituting the portfolios. For example, the Research and Development department from the earlier examples has a project portfolio consisting of the products A, B and C.

	===Implementation and maintenance===		===Implementation and maintenance===

Msorensen: /* Fundamental overview */

2023-05-09T21:12:39Z

Fundamental overview

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	== Fundamental overview ==		== Fundamental overview ==
	[[File:Matrixorg01.png\|400px\|thumb\|right\|'''Original illustration.''' A typical organizational matrix structure, illustrating the functional portfolios R&D, Design, Production and Marketing of an array of products within the organization.]]		[[File:Matrixorg01.png\|400px\|thumb\|right\|'''Original illustration.''' A typical organizational matrix structure, illustrating the functional portfolios R&D, Design, Production and Marketing of an array of products within the organization.]]
	In general, matrix organizations are implemented in order to facilitate cross-functional collaboration and improve agility within an organization. According to Jay R. Galbraith, the modern matrix management model was conceived in the 1960s, but originates from the scientific management practices and strategies developed in the early 1900s.<ref name="Galbraith"> ''Galbraith, J. R.'' (2009). ''Designing Matrix Organizations That Actually Work: How IBM, Procter & Gamble and Others Design for Success''. John Wiley & Sons.</ref> When Russia launched the Sputnik satellite in 1957, the United States’ national budget priorities shifted with the initiation of the US space program. The US aerospace industry experienced rapid growth and a wide range of new projects were established within multiple organizations—most of which directly pursued John F. Kennedy’s declared goal of manned spaceflight to the moon before 1970. With three large, national programs, resources were scarce, and the United States faced a paradox of conflicting strategic priorities: the development of innovative technology as well as cost-effective and timely execution of projects. These dual strategic priorities resulted in one of the first successful matrix organizations—the National Aeronautics and Space Administration (NASA), where strong engineering functions were maintained, but with the added element of equally strong project management strategies. Project managers within NASA would henceforth report to the head of engineering as well as the organization’s general manager.		In general, matrix organizations are implemented in order to facilitate cross-functional collaboration and improve agility within an organization. According to Jay R. Galbraith, the modern matrix management model was conceived in the 1960s, but originates from the scientific management practices and strategies developed in the early 1900s.<ref name="Galbraith"> Galbraith, J. R. (2009). ''Designing Matrix Organizations That Actually Work: How IBM, Procter & Gamble and Others Design for Success''. John Wiley & Sons.</ref> When Russia launched the Sputnik satellite in 1957, the United States’ national budget priorities shifted with the initiation of the US space program. The US aerospace industry experienced rapid growth and a wide range of new projects were established within multiple organizations—most of which directly pursued John F. Kennedy’s declared goal of manned spaceflight to the moon before 1970. With three large, national programs, resources were scarce, and the United States faced a paradox of conflicting strategic priorities: the development of innovative technology as well as cost-effective and timely execution of projects. These dual strategic priorities resulted in one of the first successful matrix organizations—the National Aeronautics and Space Administration (NASA), where strong engineering functions were maintained, but with the added element of equally strong project management strategies. Project managers within NASA would henceforth report to the head of engineering as well as the organization’s general manager.

	It would be several years before the matrix organizational approach would be adopted in the commercial industry, but after Boeing implemented it in 1967, the organizational matrix would also bleed into the R&D community. Today, matrix management is widely regarded as the optimal way to operate R&D practices. Due to its general power balance and efficiency, the organizational matrix structure would often spread from the R&D department throughout the remainder of the organization—particularly in the case of more technological or product-oriented companies. Since then, the organizational structure of large companies has become more diffused, with many companies building their own structures slowly over time, typically aligning with the definition of multi-dimensional organizations, which focus on more elements than project and function.<ref name="Galbraith"/>		It would be several years before the matrix organizational approach would be adopted in the commercial industry, but after Boeing implemented it in 1967, the organizational matrix would also bleed into the R&D community. Today, matrix management is widely regarded as the optimal way to operate R&D practices. Due to its general power balance and efficiency, the organizational matrix structure would often spread from the R&D department throughout the remainder of the organization—particularly in the case of more technological or product-oriented companies. Since then, the organizational structure of large companies has become more diffused, with many companies building their own structures slowly over time, typically aligning with the definition of multi-dimensional organizations, which focus on more elements than project and function.<ref name="Galbraith"/>
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	<blockquote>'''Example:''' ''For the development of an electronic consumer Product A, a team A1 reports to both a product manager and an R&D department manager, but more often the latter. The two managers have in collaboration planned a product development schedule with Product A entering its initial testing phase within four months. However, due to the global chip shortage crisis, a component vital to the a specific product feature is in limited supply, thereby significantly delaying the project’s lead time and increasing the overall development cost of the product. The product manager suggests revising the development schedule to delay the testing phase and product launch by six months. The R&D manager disagrees, and communicates with the production manager to allocate more resources to purchasing components, thereby remaining on schedule but increasing development expenses and potential product pricing by 10%.''</blockquote>		<blockquote>'''Example:''' ''For the development of an electronic consumer Product A, a team A1 reports to both a product manager and an R&D department manager, but more often the latter. The two managers have in collaboration planned a product development schedule with Product A entering its initial testing phase within four months. However, due to the global chip shortage crisis, a component vital to the a specific product feature is in limited supply, thereby significantly delaying the project’s lead time and increasing the overall development cost of the product. The product manager suggests revising the development schedule to delay the testing phase and product launch by six months. The R&D manager disagrees, and communicates with the production manager to allocate more resources to purchasing components, thereby remaining on schedule but increasing development expenses and potential product pricing by 10%.''</blockquote>

	In the original example above, the functional manager (the R&D department manager) implemented the revised strategy and thus had higher decision power than the project manager (the manager for Product A). In these instances, it is not unusual for the project manager to work part-time and for the functional manager to be wholly responsible for the budget of the project.<ref name=“PMBOK2001”>~~”Project~~ Management ~~Institute’'~~ (2001). “A guide to the project management body of knowledge (PMBOK guide)”. 5th ed.</ref>		In the original example above, the functional manager (the R&D department manager) implemented the revised strategy and thus had higher decision power than the project manager (the manager for Product A). In these instances, it is not unusual for the project manager to work part-time and for the functional manager to be wholly responsible for the budget of the project.<ref name=“PMBOK2001”>Project Management Institute (2001). ''A guide to the project management body of knowledge (PMBOK guide)''. 5th ed.</ref>

	====Balanced matrices====		====Balanced matrices====
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	<blockquote>'''Example:''' ''As a response to the global chip shortage, the product manager for Product A and the R&D department manager have reached a mutual agreement to redesign the original solution, thereby relying on different components to achieve the same product feature. The result is a delay in the project’s lead time by two months and a 5% overall increase in potential product pricing. However, this decision took a significant amount of time to reach, in which the work of team A1 was largely redundant.''</blockquote>		<blockquote>'''Example:''' ''As a response to the global chip shortage, the product manager for Product A and the R&D department manager have reached a mutual agreement to redesign the original solution, thereby relying on different components to achieve the same product feature. The result is a delay in the project’s lead time by two months and a 5% overall increase in potential product pricing. However, this decision took a significant amount of time to reach, in which the work of team A1 was largely redundant.''</blockquote>

	While the functional manager typically has a slightly higher decision power even in balanced matrix structures, they still accommodate the opinions and expertise of the project manager. This can lead to compromises such as the one shown in the example above, but also increase the risk of lengthy arbitration processes and outright conflict. Since the division of authority is not clearly defined, it may also be prone to shifting along one of the two hierarchies.<ref name="SyBeach">"Sy, T., D’Annunzio, L.S." (2005). "Challenges and Strategies of Matrix Organizations." Hum. Resour. Plan 28, 39.</ref>		While the functional manager typically has a slightly higher decision power even in balanced matrix structures, they still accommodate the opinions and expertise of the project manager. This can lead to compromises such as the one shown in the example above, but also increase the risk of lengthy arbitration processes and outright conflict. Since the division of authority is not clearly defined, it may also be prone to shifting along one of the two hierarchies.<ref name="SyBeach">Sy, T., D’Annunzio, L.S. (2005). ''Challenges and Strategies of Matrix Organizations.'' Hum. Resour. Plan 28, 39.</ref>

	====Strong matrices====		====Strong matrices====
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	===Known use cases===		===Known use cases===
	Traditional functional structures run the risk of project teams becoming ‘silos’ within the company and thus hinder both dynamic management and innovation. Conversely, project-based structures can be chaotic, inflexible and often result in duplicated efforts. Matrix organizations are meant to leverage the strengths of both organizational structures in a way that allows companies to build a framework around their products and services that allows business units to collaborate directly on several projects without the need to escalate managerial decisions.<ref name="KogutZander">"Kogut, B., & Zander, U." (1996). "What firms do? Coordination, identity, and learning". Organization science, 7(5), 502-518</ref>		Traditional functional structures run the risk of project teams becoming ‘silos’ within the company and thus hinder both dynamic management and innovation. Conversely, project-based structures can be chaotic, inflexible and often result in duplicated efforts. Matrix organizations are meant to leverage the strengths of both organizational structures in a way that allows companies to build a framework around their products and services that allows business units to collaborate directly on several projects without the need to escalate managerial decisions.<ref name="KogutZander">Kogut, B., & Zander, U. (1996). ''What firms do? Coordination, identity, and learning''. Organization science, 7(5), 502-518</ref>
	Today, the organizational matrix is often implemented in an international context. Unilever, Procter & Gamble and NEC are examples of companies that have adopted a matrix organizational structure in order to align goals across borders and increase overall collaboration.<ref name=“BartlettGhoshal">"Bartlett C. A., Ghoshal S." (1998). ~~“Managing~~ Across Borders: The Transnational ~~Solution”~~. (Vol. 2). Taylor & Francis, London, UK.</ref> Unilever’s various departments are strategically located based on geographic advantages. Product development activities are placed according to optimal sourcing, whilst research facilities are located in US and European population centers with high occurrences of newly educated chemists or engineers.<ref name=“BartlettGhoshal">"Burton, R.M., Obel, B., Håkonsson, D.D.," (2015). ~~“How~~ to Get the Matrix Organization to Work.”. J. Organ. Des. 4, 37. https://doi.org/10.7146/JOD.22549</ref>		Today, the organizational matrix is often implemented in an international context. Unilever, Procter & Gamble and NEC are examples of companies that have adopted a matrix organizational structure in order to align goals across borders and increase overall collaboration.<ref name=“BartlettGhoshal">Bartlett C. A., Ghoshal S. (1998). ''Managing Across Borders: The Transnational Solution''. (Vol. 2). Taylor & Francis, London, UK.</ref> Unilever’s various departments are strategically located based on geographic advantages. Product development activities are placed according to optimal sourcing, whilst research facilities are located in US and European population centers with high occurrences of newly educated chemists or engineers.<ref name=“BartlettGhoshal">Burton, R. M., Obel, B., Håkonsson, D. D. (2015). ''How to Get the Matrix Organization to Work.'' J. Organ. Des. 4, 37. https://doi.org/10.7146/JOD.22549</ref>

	== Application ==		== Application ==

Msorensen: /* Annotated bibliography */

2023-05-09T21:10:32Z

Annotated bibliography

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	== Annotated bibliography ==		== Annotated bibliography ==
	'''''Stuckenbruck, L. C.'' (1979). ''The Matrix Organization''. Project Management Quarterly, 10(3), 21–33.'''		'''Stuckenbruck, L. C. (1979). ''The Matrix Organization''. Project Management Quarterly, 10(3), 21–33.'''
	This article by Linn C. Stuckenbruck constitutes some of the Project Management Institutes official academic literature on matrix organizations. It provides a general overview of the concept and presents a series of reflections on the advantages and disadvantages of matrix structures.		This article by Linn C. Stuckenbruck constitutes some of the Project Management Institutes official academic literature on matrix organizations. It provides a general overview of the concept and presents a series of reflections on the advantages and disadvantages of matrix structures.

	'''''Galbraith, J. R.'' (2009). ''Designing Matrix Organizations That Actually Work: How IBM, Procter & Gamble and Others Design for Success.''''' This book by Jay R. Galbraith describes some of the earliest implementations matrix organizations in the 1960s and 1970s. At the time of writing this book, Galbraith had worked in the field of organizational management for over 40 years, thus giving unique insight into both the history of matrix organizations as well as the companies he has consulted for over the span of his career. Galbraith's work is widely cited within the field of project, program and portfolio management.		'''Galbraith, J. R. (2009). ''Designing Matrix Organizations That Actually Work: How IBM, Procter & Gamble and Others Design for Success.''''' This book by Jay R. Galbraith describes some of the earliest implementations matrix organizations in the 1960s and 1970s. At the time of writing this book, Galbraith had worked in the field of organizational management for over 40 years, thus giving unique insight into both the history of matrix organizations as well as the companies he has consulted for over the span of his career. Galbraith's work is widely cited within the field of project, program and portfolio management.

	'''''Goś, K.'' (2015) ''The Key Advantages and Disadvantages of Matrix Organizational Structures.'' Stud. i Mater. Wydz. Zarządzania UW 2015. 66–83.''' This literary review by Krzysztof Gós consolidates a wide range of academic literature on the subject of matrix organizations and compares many of the key findings from the research conducted in the field. It summarizes a series of key points that have been used as KPIs in this article.		'''Goś, K. (2015). ''The Key Advantages and Disadvantages of Matrix Organizational Structures.'' Stud. i Mater. Wydz. Zarządzania UW 2015. 66–83.''' This literary review by Krzysztof Gós consolidates a wide range of academic literature on the subject of matrix organizations and compares many of the key findings from the research conducted in the field. It summarizes a series of key points that have been used as KPIs in this article.

	== References ==		== References ==
	<references/>		<references/>