Innovative Organizational Structure
As the global economy expands, many businesses are transitioning away from traditional hierarchical organizational structures to more flexible, innovative organizational structures. A good example of such a structure is the matrix organizational structure.
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Identification
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Under a matrix organizational structure, companies form product groups to carry out a given project. These product groups operate completely independent of the functional departments. The coexistence of functional departments and their product groups prompted the name "matrix organization."
Function
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To carry out a specific project, specialized personnel assemble from each department -- such as engineering, research, production and marketing -- to form a specialized product group. Product group members work under the direction of a product group manager. Upon completion of the project, the product group will disband and each assigned employee will return to his regular duties within the respective departments.
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Benefits
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The formation of product groups fosters new ideas, collaboration and quick solutions to problems, which would not be possible otherwise. This is because product groups take middle managers or department heads out of the loop and foster direct interaction and collaboration among product group team members.
Considerations
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The disadvantages of a matrix organization come into play when conflicts exist between department heads and product group managers. Conflicts may occur during situations in which the personnel assigned to the product group are needed back in the department. They may also occur when the direction of the product group conflicts with an operational initiative set forth by the department head.
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References
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