What is a matrix organization and how does it work?

Team Asana contributor imageTeam AsanaAugust 26th, 20216 min read
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Summary

A matrix organization is a company structure where teams report to multiple leaders. The matrix design keeps open communication between teams and can help companies create more innovative products and services. Using this structure prevents teams from needing to realign every time a new project begins.

How can you empower teams to move quickly on complex projects without getting bogged down by stakeholder reviews and approvals? Organizational structure may be the answer. Most work environments have chains of command in place so that everyone has clarity around decision-making authority. 

A hierarchical organizational chart has the chief executive officer at the top. The chief operating officer and the chief financial officer are right below them. Department managers then branch off from the top leadership roles, with project managers branching off from there.

A matrix organization differs from this classic structure since team members report to both a project manager and a department lead. In the guide below, we’ll discuss what a matrix organization is and how you can use one for complex projects. 

What is a matrix organization?

A matrix organization is a work structure where team members report to multiple leaders. In a matrix organization, team members (whether remote or in-house) report to a project manager as well as their department head. This management structure can help your company create new products and services without realigning teams.

Matrix reporting structure

How do matrix organizations work?

Matrix organizations have two or more management reporting structures. While this may seem confusing at first, team members typically have a primary manager for their department. 

Reporting to a department manager functions similarly to a traditional work structure. For example, team members working in IT report to the IT department head. The IT department head reports to the vice president of their division. Eventually, all reporting relationships lead to the CEO. 

The difference in a matrix structure is that team members also report to project managers. Projects often require work from members of various departments like IT, marketing, and finance, which is why having a separate manager for individual projects makes sense. 

Types of matrix management

There are three types of matrix management, with each type giving more or less authority to the project manager. You can visualize these management types on a scale with the project manager on one end and the department manager on the other. 

Types of matrix structures

Weak matrix

In a weak matrix, the project manager has the least amount of decision-making power compared to the other matrix management types. When the project manager has limited authority over the project, the matrix becomes weak because the project budget and timeline is in the hands of the department head. Creating a communication plan can keep communication from getting lost in a weak matrix. 

Balanced matrix

In a balanced matrix, the department head and the project manager have equal authority and team members report to both of them. This keeps communication open between everyone in leadership roles and allows the project to move forward smoothly. 

Strong matrix

In a strong matrix, the project manager has most of the decision-making power over the project, while the department head has more limited authority. This creates a strong organizational structure because the project manager has full ownership over the project. The department head can oversee the project but doesn’t make key decisions.

Read: Team structure: 10 effective ways to organize your team

Advantages of the matrix organization structure

Advantages vs disadvantages of matrix organization

The matrix organizational structure is more complex than the hierarchical structure, but it has many advantages. Some advantages of the matrix design include clear project objectives, an efficient use of resources, free-flowing information, and training for project managers. 

Clear project objectives

The matrix organization design can ensure greater clarity on project objectives. When your team reports their progress to both the project manager and the department head, solidifying project goals is critical. When the project manager feels supported by other members of senior management, project organization becomes a priority.

Scenario: Let’s say your team is working on an app development project. Because you’re using a matrix structure, the IT developers report to you as the project manager and the IT department head. The project objective is to create a keyword search app for marketers to use on-the-go. When the IT department head and the project manager communicate a clear project objective to the IT developers, the app gets developed quicker. 

Efficient use of resources

The matrix structure allows for an efficient use of resources because teams include specialists from various departments. This reduces overhead costs and the amount of time needed to complete a project. In a hierarchical structure where every team reports to only one manager, there are fewer managers per team. These teams may require more time to create one project deliverable because they don’t have members with different specialities.

Scenario: The team creating the keyword research app may involve specialists from the IT department, the finance department, and the marketing department. When these team members successfully report to their department heads and their project manager, they increase team productivity, save time, and get the project done more efficiently. 

The matrix team reduces costs because without a combined group of specialists, companies would have to restructure teams and potentially hire new team members every time a new product or service is developed. 

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Free-flowing information

Working in a matrix structure creates a free-flow of information between teams because the team reports to multiple leaders. While team members must remember to relay information in a hierarchical system, the matrix makes information flow a requirement. Reporting information to multiple leaders may seem tedious, but with the right project management system in place, it requires little or no extra work from team members. 

Scenario: If the development team on the keyword research app only reported to the project manager, information about a bug fix could get lost. However, relaying information to the IT department head is easy to remember when it’s part of the matrix process. 

Training for project managers

The unique structure of the matrix organization gives project managers a large amount of responsibility. Project managers must lead their team through the project lifecycle. This structure challenges project managers and trains those who want to be cross-functional managers in other departments.

Scenario: During this project, your team encounters some bug fixes and a delay in the project timeline. As the project manager, it’s your responsibility to work with the IT department head to successfully handle all issues. In doing so, you discover a personal interest in IT—and a potential career opportunity in the future. 

Team retention

The matrix organization has a great track record from team member retention because when specialists are placed together, the product team stays strong. These team members work under functional department heads and are then assigned to project managers. Specialists often enjoy working together, and it can improve project performance. 

Scenario: During the keyword research app project, the project team consists of various IT, marketing, and finance specialists because these team members understand the ins and outs of creating an application for phone users. This team of specialists will likely stick together to work on many projects in the future.

Disadvantages of the matrix organization structure

Like the hierarchical reporting structure, the matrix organization also has disadvantages. Most of the disadvantages stem from this structure being complex. While complex designs can have benefits when they work, they also have the potential to cause conflict and make things messy.

Complex reporting style

The complexity of the matrix organization can be a disadvantage because teams may have trouble knowing who to report to and when. While the intention of the matrix is to benefit teams, it may complicate projects and muddy the overall process. 

Solution: The best way to prevent a reporting failure is to ensure every member of the matrix understands who to report to and how to do so. Using an intuitive project management platform that facilitates cross-team work can make the matrix structure less complex. 

Slow response time

The complexity of the matrix can lead to slow response times, which can delay projects. Slow response times come from the need to report information to multiple people. Having more people involved is a good thing, but the downside is that relaying information to more people takes time. 

Solution: Using a project management system will solve the issue of slow response times with the matrix structure. As a central source of truth, Asana can prevent duplicate work and increase visibility among teams and leadership. 

Conflicting guidance

Conflicting guidance occurs if the project manager and department head aren’t on the same page. While the matrix structure is meant to encourage teamwork, it may do the opposite depending on the personalities involved. 

Solution: To prevent conflicting guidance, establish a system that allows managers to interact directly with one another. Team members can avoid feeling like they’re caught in the middle if managers are aligned on project goals and stay on the same page.

Potential friction

The main difference between the matrix and hierarchical structure is that team members report to two managers in a matrix structure. This makes the matrix organization more complex and puts more responsibility on team members. Having two managers can give team members more feedback and guidance, but it can also result in friction.

Solution: To prevent potential friction, it’s essential for the department head and the project manager to communicate. It shouldn’t be the team’s role to choose between managers when conflict occurs. Whether in person or through virtual systems, managers can prevent friction by setting clear project objectives from day one and working together to create a successful product. 

Juggling priorities

It can be difficult for team members to juggle priorities in a matrix structure if managers don’t work together. If the department head believes their tasks are most important and the project manager thinks the same, the team may have trouble determining which manager’s guidance to prioritize. 

Solution: When team members have trouble prioritizing tasks because of miscommunication among managers, it’s up to the managers to discuss the tasks of the team and determine what should be done first. Most issues that have the potential to arise from the matrix structure can be solved with strong collaboration, communication, and clarity across teams. 

Improve the matrix structure with project management tools

Using project management tools is the best way to make the matrix structure work well. With project management, the project manager and the department head can align around project goals, plan work together, and create a clear line of communication. And when these pieces are in place, team members have the clarity they need to work efficiently and achieve your project objectives

Do you need to clarify roles and responsibilities among team members? Try using a RACI chart.

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