Organisational Structure and Design- BBA/MBA Note

Posted on Jun 3 2020 - 6:11pm by admin

(f) Matrix Organisation

Matrix organisation, also known as grid, is an answer to the growing size and complexity of the undertaking, which require an organisation structure more flexible and technically oriented than the line and staff and functional structures.

In matrix organisation structure, a project manager is appointed to coordinate the activities of the project. Personnel are drawn from their respective functional departments. On completion of the project, these people may return to their original departments for further assignment. Thus,- each functional staff has two bosses— his administrative head and his project manager. During his assignment to a project, he works under the coordinated command of the project manager and he may be called upon by his permanent superior to perform certain services needed in the project. Thus, a subordinate in matrix structure may receive Instructions from two bosses. Therefore, he must coordinate the instructions received from two or even more bosses. Similarly, matrix superior has to share the facilities with others. He reports in a direct line to the up, but does not have a complete line of command below. A matrix organisation structure Is presented in the figure below:


The important features of the matrix organisation are as follows:

(i) Built around specific projects
The matrix organisation is built around specific projects. The charge of the project is given to the project manager who has the necessary authority to complete the project in accordance with the time, cost, quality and other conditions communicated to him by the top management.

(ii) Personnel front various departments
The project manager draw’s personnel from various functional departments. He assigns the work to the various functional groups. Upon completion of the project, the functional groups return to their functional departments for reassignment to other projects.

(iii) Different roles
The project and the functional manager have different roles. The project manager exerts a general management viewpoint with regard to his project. Each functional manager is responsible for maintaining the integrity of his function. However, both the project and functional managers are dependent on each other as they have to take several joint decisions in order to execute the project. So there is proper co-ordination between the project and the functional groups.

(iv) Management by Objectives
Management by project objectives is paramount to the way of thinking and working in it.

Sometimes, matrix and project structures are considered to be the same. However, there is difference between the two. In project organisation, separate identifiable units are created for taking and managing projects, and complete responsibility for the tasks as well as all the resources needed for their accomplishment are usually assigned to one project manager. In a large project with long life, the project division resembles a regular division, relatively independent of any other division. In matrix organisation, project manager is usually not assigned complete responsibility for resources. Instead, he shares them with others in the organisation. Project organisation Is preferred when the organisation has small number of major projects. For projects of major magnitudes, a project type organisation can be established, but rest of the organisation can be managed through functional structure. In such a case, there are well-established functional departments which have skills and capabilities for the performance of a variety of programmes. Essentially, programmes flow through the functional complex and receive the services of these specialised departments. Matrix organisation structure, on the other hand, is applied when’ the organisation has large number of smaller projects so that when one project is completed, its resources are directed to other projects.


1. Matrix structure focuses resources on a single project, permitting better planning and control to meet the project deadline. In project management, time is of prime Importance and, therefore, it should be completed within the specified time. However, since the organisation cannot create many project divisions, matrix serves the purpose adequately.

2. It is quite flexible structure as compared to traditional hierarchical structure. Therefore, it can work very well in dynamic environment by absorbing the inevitables that may occur as work progresses on projects.

3. It emphasises professional competence by elaborating authority of knowledge rather than authority of position. This type of internal environment in the organisation provides personnel to develop and test their professional competence and widen their scope to contribute maximum in the organisation.

4. It improves motivation because people can focus more directly on completion of one project than they can In the traditional functional structure It also improves communication by discarding traditional hierarchical system which produces more inhibiting factors.

5. It relieves top management for taking long-term course of actions so that the organisation can design Its strategics suitable to environmental needs.


1. There Is always power struggle in matrix structure. The essence of matrix structure is dual command, and to survive such a form, there needs to be balance of power. However, this power balance shifts constantly as people try to maximise their benefits. This results in power struggle among people which may become dysfunctional If top management does not play active role In balancing the power.

2. Matrix structure can develop anarchy if not managed properly. People have to work under multiple command. Besides, there may be Informal relations among people. Thus, whole concept of flexibility may result in problem because people may not be clear about what they should do; what they are expected to contribute.

3. This structure may not work very well when there is economic crunch. In the case of economic crunch, the organisation may not be in the same position as there may be many changes In market position, pressure on profit margin, and financial problems. In order to overcome these problems, the organisation may be required to change its strategy which may not correspond to matrix structure. For example, decision process has to be centralised in order to arrive at quick decisions to face adversaries.

4. If matrix organisation Is not followed properly, there Is delay in decision making. The decision-making process is such that many persons are involved in the decision; each person may hold veto power or may not give consent because of power struggle and conflict. In this situation, top management may remain busy in solving internal problems of the organisation and find less time for external affairs.

5. At the initial level, matrix structure becomes quite costly because of top heavy management. It does seem to double up management because of dual chain of command. However, this is only initial problem, and in the long run, this can be offset by the benefits accrued from matrix structure.

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