All organizations have a structure that defines how work is organized, who has the authority over work and workers and what work processes are used. The nature of these structures varies ranging from from those companies organized by function and utilizing a top-down reporting structure, to those taking a project-based approach, where assignments may be fluid and responsibility for work may be distributed. Engineering and technology organizations benefit greatly from a project-based or matrix structure.
The ways in which organizations are structured has evolved over time. In the early days of the American republic, entrepreneur founders often led companies. Over time, professional management came into being and managers were given responsibility for specific functions, such as sales, purchasing, manufacturing, administration or engineering. As organizations become more robust and their functions more diversified, this became the norm. In the 1970s, with the rapid development of technology, organization by project emerged. Many engineering and technology companies now organize in this matrix fashion.
Functional or matrix organizations are two ends of an organizational spectrum. Many companies include elements of both and may be classified as weak matrix, balanced matrix or strong matrix, depending on the extent they use a project-oriented structure and the level of authority given to project managers.
The structure of an organization affects how successfully a company is able to meet its strategic objectives or goals. While a functional group is responsible for ensuring the quality of current products and processes, it is the project-oriented activities that create the products and processes that take a company successfully into the future.
Good and timely communication is essential for success in a matrix-style organization. In a functional structure, much of the communication follows the “line of command,” but in a matrix-style organization communication is much more complex and occurs among the various project team members. There is more room for misunderstanding and misinterpretation.
A matrix-style organizational structure provides project-oriented companies with improved cohesiveness. Resources, such as staff, time, equipment and money, can be brought to bear more efficiently on specific problems and shared more effectively across projects. Matrix organizations may benefit from improved teamwork and improved morale. Team members are exposed to a wider variety of challenges developing their skills and knowledge to a higher level.