What is a Matrix Organization Structure?

Organizational reporting charts are the best way to depict a matrix organization structure.

A matrix organization structure is an organizational reporting structure commonly used for project-based teams. It groups teams in the organization by both their department and their product, allowing for ideas to be exchanged between varying parts of the organization.

History and Benefits

Traditionally, organizations have used reporting structures where employees report to one manager, keeping valuable information, ideas and lessons learned trapped inside the department. With project-based teams, employees are divided by both function and by products or projects to increase knowledge sharing across the company.

Considerations

The biggest drawback to matrix organization structure is the confusion and stress it causes employees. An employee may report to one boss in a department and another in a project, leaving him open to conflicting loyalties and requests. If the project and the department managers are frequently at odds, employees may be more likely to leave the organization.

Insight

The matrix organization structure works best when employees have one ultimate "boss." When considering a change to a matrix or hybrid matrix structure, it is best to start with project-based teams and slowly change the structure across the organization.

References

• Project Management Course: Matrix Organizational Structure--History and Styles