What is Matrix Organizational Structure? A Comprehensive Guide to it

Rather than a traditional hierarchical system, the matrix organizational structure combines the vertical and horizontal leadership systems to form an organizational structure. Companies may generally use a matrix structure when they need different skill sets to work together or when they want to use other management styles.

So, do you want to learn more about the matrix organizational structure so that you can use it effectively when needed? This article will introduce its five aspects: meaning, use cases, advantages, disadvantages, and a concrete example. We will also provide you with one of the best tools to create a matrix organizational chart and a simple self-made chart we created using this tool for you to check out.

• Part 1. What Is Matrix Organizational Structure
• Part 2. Use Cases of Matrix Organizational Structure
• Part 3. Advantages of Matrix Organizational Structure
• Part 4. Disadvantages of Matrix Organizational Structure
• Part 5. Example of Matrix Organizational Structure
• Part 6. Best Tool for Creating a Matrix Organizational Structure Chart
• Part 7. FAQs

Part 1. What is Matrix Organizational Structure

The matrix organizational structure is a work structure that organizes employees into a grid-like reporting structure. It combines a vertical leadership system by function with a horizontal leadership system by project or product.

In this structure, management roles are varied and may change depending on the project’s needs, so employees may have to report to multiple leaders. This makes it possible for an employee to maintain organizational and operational ties with the original function department and to participate in project and product teams. Therefore, this organizational structure is suitable for project work that requires the involvement of a wide range of professionals.

Part 2. Use Cases of Matrix Organizational Structure

The matrix organizational structure can be used in many different situations, and here are some of the classic use cases in which it is used:

• Large and multi-project.

The matrix organizational structure is used when multiple or large projects are managed simultaneously. For example, a hospital with cross-functional departments might use a matrix structure. This structure can more effectively coordinate resource allocation and schedule control to avoid resource conflicts and schedule delays.

Check the details here to make a cross-function chart for such hospitals or other organizations.

• Complex and cross-departmental project.

The matrix organizational structure can fully exploit its advantages in complex projects that require cross-departmental collaboration. For example, in a research and development enterprise or a software company, a project may involve multiple departments, such as marketing and sales. The matrix structure allows team members to perform their roles and ensure that each work is carried out smoothly.

• Geographically dispersed operations.

In a highly competitive market environment, the matrix structure, because of its flexibility and adaptability, helps companies operating in different regions and countries respond quickly to marketplace changes and ensure that each region’s needs are met.

Part 3. Advantages of Matrix Organizational Structure

The matrix organizational structure makes the employees not only maintain the connection with the original functional department but also participate in the work of the product or project team to ensure that the business activities get professional support and organizational form of cross-department cooperation. So, this structure has many advantages, including the following:

• Enhance flexibility and adaptability.

The matrix organizational structure can quickly respond to the external environment and market changes. Besides, it can quickly form a cross-departmental team for specific projects or products to cope with complex and changeable market demands.

• Promote cross-departmental collaboration.

This structure encourages and promotes information sharing, knowledge exchange, and cooperation among different departments. Moreover, it breaks departmental barriers, helps solve complex problems, and improves overall work efficiency.

• Clear responsibility and power distribution.

The matrix organizational structure can effectively distribute responsibility and power and reduce conflicts and chaos through a clear responsibility system.

Part 4. Disadvantages of Matrix Organizational Structure

Although the matrix organizational structure has significant advantages, everything has pros and cons. So, this section will mention some of its obvious disadvantages, mainly including:

• Unclear powers and responsibilities.

In a matrix structure, employees may be led by more than one manager. This kind of leadership mechanism may lead to command conflicts, unclear responsibilities, and complicated conflicts. Employees may feel confused when two leaders disagree.

• High communication costs.

Communication costs in matrix organizational structure are usually high due to multiple reporting levels and cross-accurate information transmission. So, more time and energy need to be devoted to communication and coordination, which may reduce work efficiency.

• Resource allocation difficulty.

Because multiple projects may need different resources in the matrix structure at the same time, it becomes a complex problem to allocate these resources fairly and reasonably. If not handled properly, this may lead to resource waste or project delays.

Part 5. Example of Matrix Organizational Structure

In this section, we will provide a concrete example and attach our self-made matrix organizational chart to help you better understand the matrix organization structure.

Here is a sample overview of the matrix organizational structure.

Assume that a technology company develops various electronic products, including smartphones, tablets, and smartwatches. To manage the development, production, and sales of these products more effectively, the company decided to adopt a matrix organizational structure.

• Functional departments:

The company has functional departments such as R&D (Research and Development), marketing, sales, production, and finance. These departments are responsible for professional work in their respective fields and maintain a fixed organizational structure.

• Product Group:

The company has set up special product groups for different products. Each product team consists of members from various functional departments to ensure that professionals participate in all links from research and development to sales.

• Dual leadership:

Members of the product team simultaneously accept the leadership of functional department managers and product team leaders. This dual leadership mechanism can strengthen cooperation between departments and ensure the smooth progress of product development.

In short, the matrix organizational structure can realize the effective allocation of resources and close cooperation between departments by combining functional departments and product groups. This organizational structure is applicable to fields such as scientific and technological research and development, project management, etc.

Part 6. Best Tool for Creating a Matrix Organizational Structure Chart

MindOnMap is a professional mind-mapping tool compatible with multiple platforms. It can be downloaded for free for Windows or Mac, or you can use it online. Besides, it has many use scenarios, such as taking notes and making outlines for articles or speeches, as well as the matrix organization structure for project management. With so many scenarios, it is really a good partner in our study and work.

In addition, it has many advantages, such as a variety of mind map templates, unique icons used to personalize the mind map, images or links that can be inserted in the mind map to help clarify the ideas, and so on. If you need to create a matrix org chart or other charts, MindOnMap is the best choice!

Part 7. FAQs