Notes on Matrix Organizations

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What is a Matrix Organization?

A Matrix organization is a combination of functional and project of product patterns of departmentalization. This type of organization is seen in businesses specializing in marketing. Functional departments are always found in matrix organizations and manage the overall operation of their respective units. Product departments or project teams are only created when necessary. After members of a project team are assembled, the team is placed under management of a project manager. After project teams are no longer required, the members of the team and the project manager revert back to their original departments until called back next time.

Advantages of a Matrix Organization:

1. The problem of coordination is greatly simplified as most of the task of team assembly is done by the project manager.

2. A pool of specialists always exists for immediate deployment on corresponding projects.

3. The overall cost of completing a project is low.

4. The information decision system is very fast and efficient, and enables members to quickly respond to change in product needs.

5. Management is oriented towards end results.

6. Professional identification is maintained.

7. Product-profit responsibility is predicted.

Disadvantages of a Matrix Organization:

1. Company resources are limited causing conflict to develop between functional and project managers.

2. Since individual project team members and managers have roles elsewhere in the company, conflicts of interests may arise.

3. There is unbalanced authority and power in the vertical and horizontal spheres of the company, resulting in management disputes.

4. Matrix organizations may require many meetings.

Additional Readings:

1. Functions of a Business Manager
2. Henry Fayol and Modern Management Theory
3. Modern Management Thoughts and McKinsey's 7-S framework
4. Industrial Planning
5. Management and Setting of Objectives
6. Principals of Organization
7. Matrix Organizations
8. Functions of the Human Resources and Accounting within an Organization
9. Differentiation between Motivation and Satisfaction
10. Barriers to Good Communication
11. Requirements of Effective Controls
12. Formal and Informal Organizations
13. Bonded Rationality

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