The 6 key advantages and disadvantages of a matrix organization
There are powerful reasons to introduce a matrix organization structure – that’s why many of the world’s leading organizations have one. This video outlines the 6 key reasons why organizations introduce a matrix and the importance of communicating these reasons clearly. It also introduces some potential downsides of the matrix for the way we work together.
A matrix structure is, strictly speaking, where we have multiple bosses – more than one formal reporting line, whether solid or dotted.
However, the term matrix is often used for anywhere where we are working ‘horizontally’ across the traditional ‘vertical’ silos of function, geography or other organizational units, such as working with external partners, or multi-functional and virtual teams. This way of working is the norm in complex organizations
6 key advantages of the matrix organization
Here are the top six reasons (from the academic research and our own consulting experience) why companies introduce a matrix:
- To meet the needs of global or regional customers who want a consistent international agreement and point of contact.
- To improve their capability to run global or regional projects and systems
- To improve access to resources, skills and technologies across the organisation that might otherwise be locked up in the vertical silos
- To improve cooperation and communication across the functional and geographic silos.
- To bring flexibility through faster decisions involving multiple stakeholders.
- To build broader people capabilities – as businesses become more integrated they need to develop people who can think beyond their own functions or locations.
It is important that your objectives for having a matrix are well communicated. In the absence of clear communication, the response to reorganization is often ‘I will keep my head down and it will go away in six months.’
In the absence of clear goals people often assume that the matrix is the latest management fad or the brainchild of some external consultants.
However, when we make a choice we always gain some advantages, and incur some disadvantages. There are some potential downsides that come with the additional complexity and connectedness of matrix working.
And 6 key disadvantages of the matrix
Here are some common challenges
- Accountabilities and authority can be less clear and are often shared.
- Meetings and bureaucracy can rise as the amount of coordination and communication increases.
- More people become involved in the decision process, which can slow things down.
- Ambiguity increases, with competing goals and higher levels of change and flexibility.
- We can see increases in central control as leaders try to re-establish control over a more complex environment.
- There is the possibility of more resource conflict as people need to engage outside their silos to get things done.
Whilst these symptoms are common – they are not inevitable. These challenges are not about the structure or the strategy, they are about the way people work together in the matrix. As a result the solution is not in changing the structure, but in updating the way we work.
Our jobs as leaders is to help deliver the advantages and prevent the potential disadvantages.
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