Matrix Organization

Matrix organization describes a system characterized by a form of management with multiple chains of command. Unlike a traditional hierarchy in which each worker has one boss, a matrix system requires employees to report to two or more managers, each responsible for a different aspect of the organization's overall product or service (see Table 1).

For example, a video producer working at an advertising firm might report to the head of the media department (functional chain of command) as well as to the project manager for a given client product (project chain of command). The project manager is accountable for the overall performance of the product team, whereas the functional manager is responsible for the technical performance of the particular [Page 554]employee task—in this case, video production. The benefits of a matrix organization approach can include improved communication flows, more efficient use of resources, increased flexibility, and better performance resulting from complementary expertise among managers. The drawbacks of a matrix system might include morale problems and conflicting priorities arising from multiple lines of authority, as well as higher overhead costs associated with increased system complexity and redundancy. Because of these challenges, the move from a traditional hierarchy to a matrix system typically requires the adoption of new information and communication technologies, as well as a concentrated effort to reform the organizational culture and expectations of members.

Although it is difficult to trace the exact origins of the matrix organization concept, the term first emerged from the aerospace industry in the 1960s. Aerospace firms that wanted to contract with the government were required to develop charts showing the structure of the project management team that would be executing the contract and how this team was related to the overall management structure of the organization. Rather than completely reconfigure their management systems to meet these requirements, companies chose to create horizontal project units to overlie their existing vertical hierarchies. This helped fulfill both the goal of the consumer—a transparent set of resources fronted by a clear group manager—and the producer's desire for continuity and accountability within the larger organization.

The development of the matrix approach reflects the need for organizations in a number of public and private spheres to adapt to increasing task and environmental complexity. Thus, matrix organizations are most likely to be found among firms and agencies that exhibit high levels of interdependence with environmental actors, high demands for information processing, and high levels of task diversity and complexity.