Matrix Departmentalization – Definition, Advantages, Disadvantages

Matrix departmentalization is a combination of functional departmentalization and task force departmentalization

Matrix departmentalization attempts to combine functional and task force (project) departmentalization designs to improve the synchronization of multiple components for a single activity (i.e., a moon launch), to improve the economics of scale, and to better serve the customer and company.

Matrix departmentalization was introduced in the early 1960’s in response to the growing complexity and size of technically oriented enterprises, which needed more flexibility.

Initially the aerospace industry and later Dow Coming, General Electric, Shell Oil, and other industry giants adopted this concept of a project management structure superimposed on a traditional functional organization.

Supervision is dual, encompassing technical and administrative managers, and incorporates several reporting systems and interweaves communication lines for transmitting decisions.

The image illustrates a matrix form of organization structure. In the image, five managerial groups, represent five different functional areas within a firm (i.e., Purchase, Logistics, H.R, Engineering, and Finance.).

These functional areas, under the direct control and direction of the CEO, take proper care of the projects—A, B, C & D which are vital for the survival of the organization as a whole.

Many argue that this form of departmentalization achieves a more balanced form of organization structure and expedites complex and specialized decision-making challenges.

However, care should be exercised in adopting matrix departmentalization. The traditional “one worker, one boss” management practice is severely modified.

The matrix arrangement requires extensive communication, and it should meet internal company needs and not simply be grafted onto the existing organization in the hope of demonstrating progressive management thinking.

Matrix departmentalization may slow down decision-making and thus all managers must understand the rules of the game.

Usually, this necessitates an educational effort so that none feel that their decision-making is threatened, and non-management members learn how to function with two managers.

Advantages of Matrix departmentalization

  • Is oriented toward end results Professional identification is maintained.
  • Pinpoints product-profit responsibility.

Disadvantages of Matrix departmentalization

  • Conflict in organization authority exists, causing uncertainty in reporting relationships
  • The possibility of disunity of command exists.
  • Requires the manager to be the most effective and efficient.

Problems with Matrix Organizations

Davis and Lawrence point out at least nine problems that can affect a matrix organization;

  • Tendencies towards anarchy: Dual and multiple reporting can create “a formless state of confusion where people do not recognize a boss to whom they feel responsible.”
  • Power struggles: A matrix organization encourages jockeying for power and upward mobility because an individual’s career path can appear “fuzzy”.
  • Severe grouping: Matrix behavior is often confused with group decision-making, which often wastes time and hampers managers from being quick and decisive.
  • Collapse during economic crunch: Often when business declines for any number of internal or external reasons, the matrix form becomes the scapegoat for poor management and is discarded, even after tremendous investment in its creation.
  • Excessive overhead: In initial phases, a matrix organization has high overhead costs. It appears that costs will double because of double management’ and a dual chain of command. In the long run, however, extra costs should disappear and be offset by productivity gains.
  • Sinking to lower levels: A matrix organization has difficulty existing at higher levels of a corporation and has a corresponding tendency to sink to group and division levels, where it thrives and flourishes.
  • Uncontrolled layering: “Matrices which lie within matrices result frequently from the dynamics of power rather than from the logic of design.”
  • Navel gazing: Matrix managers can succumb to an excessive internal preoccupation with the interdependence of people and tasks and decisions, and lose touch with the external marketplace.
  • Decision strangulation: A matrix can create too much democracy and foster an environment of too little action via endless delays for debate.

Guidelines for Making Matrix Departmentalization Effective

  • Matrix management can be made more effective by following the under mentioned guidelines;
  • Defines the objectives of the project or task.
  • Clarify the roles, authority, and responsibilities of managers and team members.
  • Ensures that influence is based on knowledge and information, rather than on rank.
  • Balance the power of functional and project managers.
  • Undertake organization and team development.
  • Select experienced managers for the project who can provide effective leadership.
  • Reward project managers and team members fairly.

To summarize; matrix departmentalization is a combination of functional departmentalization and task force departmentalization for improved harmonization of multiple components for a single activity to improve the economics of scale and to better serve the customer and company.

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