A business’ organizational structure has far-reaching effects on overall business growth, especially in terms of employee productivity and operational efficiency. So, businesses take their organizational structure quite seriously. One of the various approaches firms take in this regard is matrix management.
Understanding Matrix Management
Matrix management is a form of organizational structure in which employees report to multiple bosses rather than one. It does away with the one-boss, vertical system that most firms use and brings about a system where employees have multiple superiors along both functions and project lines.
With a matrix management system, employees in different functional divisions are distributed into product/project teams where they get to work with colleagues from other functional divisions. For instance, in a particular project/product team, we can have employees from engineering, sales, customer success, working together to deliver the product or project.
The most significant argument in favour of matrix management is that it offers more efficiency than the traditional vertical management structure. Under a vertical management structure, there’s the CEO at the top, supervisors in the middle section, and at the bottom, we have the regular employees in various divisions who report to one supervisor. But, how’s matrix management structure more efficient?
How Matrix Management Works in Practice
The efficiency of matrix management significantly manifests in how it’s practised. Typically, companies that adopt the matrix management style are structured to work along both functional and product/project or geographical lines. Here. we’ll be using the hypothetical company ABC Plc, a semiconductor maker with headquarters in London.
ABC Plc has a number of projects in the pipeline, including a new blockbuster graphics card project. So, each project will have Project Teams headed by a Project Manager, with team members drawn from various functional areas of the company namely, engineering, finance, sales and marketing, procurement and supplies etc.
The matrix management will involve each employee having at least two managers - the head of their individual functional divisions, and the Project Manager. For instance, for the blockbuster graphics project, the employee from finance will report to both the head of finance and the Project Manager for the graphics card.
Although less common, the matrix management structure may also be applied in companies that are spread across multiple geographies. Assuming that ABC Plc has regional offices across the country, with one in Liverpool, the HR manager will report to both the superiors in Liverpool as well as those at the headquarters in London.
Advantages of Matrix Management Structure
Companies adopting the matrix management organizational structure have some benefits to look forward to, and these include:
1. Combination of Skills and Competencies
When different people from diverse departments work together, it helps solve problems in a more efficient way. It does lead to overall development of employees as each one is exposed to different functions apart from their primary job. This helps them pick up more technical and soft skills.
2. Collaboration and Cooperation
The matrix management structure has the potential to boost employee morale as employees work with one other to deliver on certain goals.
Contrary to popular opinion, matrix management actually fosters innovation. Project teams will comprise employees with diverse backgrounds, who can view problems in different ways. This infuses dynamic thinking into the product or project development process.
Once the project is done or the product phased out, employees may be reassigned to other tasks or projects. This will prevent monotony, and bring about flexibility in the work employees get to do.
Disadvantages of the Management
Adopting the matrix management organizational structure has some downsides, some of which are outlined below:
1. Potential Loss of Accountability
When a firm adopts a system in which employees have to report or work with multiple bosses, there may be accountability issues. In the normal, traditional hierarchical structure, the manager of a particular functional division is easily held accountable for the division's shortcomings. For instance, the HR Manager will be held responsible if the division performs below expectations.
However, under the matrix management structure, there are two or even more managers, and it quite becomes difficult to place responsibility squarely on anyone or any division.
2. Dual-reporting and Potential Conflicts
Another issue that may come up in a firm with the matrix management structure is that double reporting may lead to conflicts and confusion. Employees have to deal with different bosses with different styles of doing things.
3. Slower decision-making process
With the matrix management system, decisions have to pass through two or more managers. This can considerably slow down the decision-making process, and affect the rate of work delivery.
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