The Matrix Structure

Many contemporary organisations, especially the small businesses in the United Kingdom and around the world are structured in the “command and control” hierarchical form (Pasternack & Viscio 1998). Although the contemporary fads of organisational behaviour are said to be responsible for the success of modern organisations, it is also a fact that the hierarchical structure of organisational design originated in the iron factories as well as the wool mills of Britain. This British organisational structure was later modified to suit the economic and business conditions of the times. Today’s organisations include giants such as Royal Dutch Shell and BP of the UK, ranked among the top ten Fortune Global 500 companies of 2006.

These organisations, and many more multinational corporations of the modern world, cannot simply use the “command and control” hierarchical form that the small business finds convenient for itself. The multinational organisation is known for its complexity in operations, with a variety of departments and departmental heads that are almost equally important in making the business what it is (Galbraith 2000). In order to meet the growing global needs of such giant corporations of the modern times, the matrix structure has evolved from the “command and control” hierarchical form to become the “structure of choice among CEOs” (Sy & Cote 2004, p. 439).

The CEO of a huge organisation such as BP cannot be expected to “command and control” every single business operation. Even departmental heads of global corporations are not held solely responsible for the functioning of their specific departments, seeing as there might be specialists in other departments that must be consulted for the tasks at hand. Rees & Porter (2004) write that the organisational structure that directly opposes this coordination among departments is conventional line management, a form of organisational design that may very well obstruct organisational growth despite external circumstances that may be pushing for change, e.g. the introduction of new technologies.

The Oxford University, for example, uses conventional line management, which would not allow the university to take gigantic leaps in the disciplines of science and technology, seeing as the lack of coordination among the university’s departments make it difficult for them to share resources. The matrix structure addresses this need for change, however, not only in universities but in all kinds of organisations. Rees & Porter describe this need of the times thus:

Problems in organisations, together with the provision of products and services, do not
always neatly correspond to departmental boundaries. Consequently, it is often necessary for
multi-disciplinary teams to be established that straddle existing organisational boundaries.
The leaders of such teams are likely to be based in a particular department but to be
responsible for the co-ordination of the activities of a number of staff [or employees] from
other departments. Whilst they are likely to remain accountable to their departmental head,
they are also likely to be accountable to another line manager for the activity of the multi-
disciplinary team they lead. The need for such arrangements increases as organisations
become more complex and need to become more market orientated. Such arrangements are
common in the newer universities but also in organisations developing new products or
services that need to draw on the resources of more than one department. The arrangements
are also common in client-based organisations, such as management consultancies and
advertising agencies where one person is appointed team leader to meet the needs of a
particular client. Such team leaders may have to combine such activities with other
responsibilities where they are operationally controlled by their departmental or section head.
As the pace of change and the need for a market orientation increases, so do does the need
for matrix structures. They are likely to be an essential feature of organic, as opposed to
mechanistic, organisation structures or sub-structures. Matrix structures may also be needed
for problem-solving, e.g. for quality improvement, where a generic approach needs to be taken
to a problem because both its causes and remedies may cut across departmental boundaries.
Given the importance of matrix structures, it is necessary to see that they are properly
designed and that multi-disciplinary team leaders are given appropriate training and support.

Clearly, the matrix organisational structure relies on a coordination of efforts and the pooling of resources among various departments in a large organisation such as Proctor & Gamble. The company has its Research & Development European Headquarters in the United Kingdom. Here, “the local manager wears two hats – one for his product, one for his region.” Such is the matrix structure, recognizing the truth that specialists working for various departments are the resources of the whole organization, and may be required for organisational projects that seemingly have nothing to do with the departments where the specialists were originally employed.

Specialists that are chosen from their respective departments to work on projects related to other departments are the pooled resources of the concerned departments, and therefore answerable not only to the managers of their own departments but also to the project managers of the departments that have borrowed their expertise. The managers of the departments (e.g. IT) where specialists come from, are known as functional managers. The managers of the departments that borrow the expertise of IT specialists, for example, are referred to as project managers. Thus, matrix management would have the IT specialist report to both the functional manager and the project manager (Martinsons 1994).

This structure of management is shown pictorially by the “basic matrix,” which is “grid-like, with two perpendicular dimensions such as functions and products” (See Appendix). What is more, it is clearly visible through the pictorial matrix itself that this structure “allows a company to address multiple business dimensions using multiple command structures” (Sy & Cote, p. 439-440). Gone are the simple “command and control” days – welcome project management! Today, organisations in the UK and across the globe are using the matrix structure in various forms with corresponding pictorial depictions of the matrix (Davis & Lawrence 1977).

The matrix structure was first used by the aerospace industry. Nowadays, it is found valuable also in the automotive, communications, banking, electronics, chemical, defense, oil and gas, computer, financial, and technology services industries among others (Galbraith). The contemporary global organisation has a complex product mix, making it essential for the organisation to adopt the matrix structure. A skilled worker does not have to utilize his skills in a single department or for a single product alone. Matrix management allows the organisation to cut costs by using the skilled employees to achieve myriad goals.

Furthermore, the matrix organisational structure meets the customers’ demand for “integrated services” or the “bundling of related services” in order to reduce the overall cost. As an example, countless customers demand “voice, data, and Internet access services” from their telecommunication companies in the UK. Whereas “voice,” “data,” and “Internet access services” may be handled by Departments A, B, and C of a telecommunication company, all three departments must integrate their services for the customer without having the latter visit the three departments separately to purchase their respective services, and then a fourth department that would integrate the services (Numerof & Abrams 2002).

Matrix management augments the need for linking all departments within the organisation via computer technology. Thus, this modern form of management and its corresponding organisational structure ease communications within the company. Moreover, the matrix structure requires the Human Resources function, like computer technology, to be used by all departments in a unique way, that is, by requiring the Human Resources employees to report not only to their functional head but also to the business departments that they have been assigned for support (Numerof & Abrams).

Experts believe that this dual reporting may appear “overly complex and cumbersome” at times, overwhelming the managers with “conflicting goals.” All the same, CEOs continue to prefer the matrix structure over other forms of management because the matrix, when “properly implemented and managed,” is truly “a powerful tool that can actually help facilitate operations” (Kearney 2003).

Yet another unique feature of the matrix structure is that it helps the departments within the organisation to maintain mutual goals. The benefits of team building may easily apply to matrix structures when properly used. Experts advise that matrix structures must be implemented with a focus on their strengths, while the weaknesses of the matrix must be managed. The fact that the benefits of team management may apply to the matrix structure is a strength of the matrix.

At the same time, managers might have to deal with “conflicting goals” in the matrix organisation, and such conflicts ask for proper attention from the upper management of the organisation, which must find it possible to use the matrix despite the problems that it poses. In the perspective of the upper management, “the goals of one unit will always reinforce those of other units.” So, when functional managers or product managers disagree about the goals, the conflict must be managed so as to ensure the continuance of the matrix structure (Kearney).

Indeed, the matrix calls for a high degree of cooperation and coordination within the organisation. Despite “confusion over responsibilities” that might appear from time to time, it is the responsibility of the upper management to ensure continuity of the matrix. Additionally, the organisation is advised by experts to use the following techniques to overcome the challenges of the matrix: (1) Clearly define and redefine the expectations to the employees; (2) Provide ongoing training for working through the matrix; and (3) Institute “formal job rotation to broaden employees skills, perspectives and appreciation for other parts of the business” (Kearney).

Sy and Cote state that matrix management is intricately connected with the emotional intelligence of the organisation and its employees. Given that the modern matrix calls for unity among employees and departments in the realization of organisational goals, matrix performance may also lead the organisation as a whole to increase its emotional intelligence. Provided that the matrix is managed properly, and the upper management is sufficiently involved in its maintenance, an increase in emotional intelligence would also help the organisation connect better with its customers and other stakeholders.

Kilman (1985) writes that almost all employees would initially have a problem connecting with the entire organisation or many departments in a matrix. Nevertheless, training may help the employees increase their emotional intelligence (Caruso et al. 2002). Seeing as the modern discipline of organisational development also calls for unity within the organisation so as to allow all employees to participate in the entire organisational process, the training required for the matrix is extremely important.

Organisational behaviour theorists believe that the employees must feel as though they are an essential part of the entire organisational process, by being involved in decision-making in various departments, etc. The matrix is, therefore, a highly desirable management form, seeing as it compels employees to feel that they are important to the entire organisational process in any case.

Likewise, organisational behaviour theorists sing praises of team management because it engenders a feeling of belongingness among the employees. This feeling of belongingness is one of the basic needs of humans, according to Abraham Maslow’s theory of motivation. Until and unless this need is met, employees cannot be expected to maximize their productivity, and the organisation cannot be expected to realize its potential. This is yet another reason why the matrix is immensely popular nowadays.

Organisations do not have to deal with labor unions if their employees’ needs are met. Seeing as the matrix structure calls for integration, and an intricate connection between employees and their departments, it helps the employees meet their need for belongingness to make way for the realization of their potential. Indeed, the matrix is a productivity-enhancing tool that is expected to continue being used with great excitement in the world of business. Backed by the social science discipline of organisational behaviour, the matrix may even prove to be indispensable in the near future.

REFERENCES

Bolton, L, ‘The Matrix Structure,’ Information Technology & Management, viewed 6 May 2007,
< http://opax.swin.edu.au/~388226/howto/it2/o_struct.htm>.
Caruso, DR, Mayer, JD & Salovey, P 2002, “Emotional intelligence and emotional
Leadership,” in Riggio, R, Murphy, S & Pirozzolo, FJ (Eds), Multiple Intelligences and
Leadership, Lawrence Earlbaum Associates, Hillsdale, NJ, pp. 55-74.
Davis, SM, & Lawrence, PR 1977, Matrix, Addison-Wesley Publishing Company, Glenview,
IL.
Galbraith, JR 2000, Designing the Global Corporation, Jossey-Bass, San Francisco, CA.
Kearney, AT 2003, ‘Applying a Matrix Structure at work,’ Bangkok Post, 1 May.
Kilmann, RH 1985, Contemporary Organisation Development, Scott, Foresman and Company,
Glenview, IL.
Martinsons, AGB 1994, ‘In Search of Structural Excellence.’ Leadership & Organisation
Development Journal, vol. 15, no. 2, pp. 24-28.
Numerof, RE & Abrams, MN 2002, ‘Matrix management: recipe for chaos? When it works, it
works well. When it doesn’t, it’s a fast track to disaster. The strengths of the model appeal to many corporations today, but not all are suited for a matrix structure.’ Directors & Boards.
Pasternack, BA & Viscio AJ 1998, The Centerless Corporation, Simon and Schuster, New York,
NY.
Rees, WD & Porter, C 2004, ‘Matrix Structures and the Training Implications.’ Industrial and
Commercial Training, vol. 36, no. 5, pp. 189-193.
Sy, T & Cote, S 2004, ‘Emotional Intelligence: A Key Ability to Succeed in the Matrix
Organisation.’ Journal of Management Development, vol. 23, no. 5, pp. 437-455.
Whalen, AJ 2007, ‘Configure a Matrix Organisation Structure to Track Skills and
Responsibilities Across Product Lines,’ HR Expert, viewed 6 May 2007, <http://www.hrexpertonline.com/>.