The matrix structure is one of the types of organization that companies use the most to optimize their operations. It is a particularly interesting organizational structure for teams working on complex projects requiring numerous collaborations.
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What is a matrix structure?
Matrix structure is an organization in which hierarchical relationships are presented in the form of a matrix. In this corporate structure, the teams are under the responsibility of several managers. Employees with equivalent skills are grouped by task, allowing organization by project.
The matrix organization can also be defined as a mixture between the functional organization and the divisional organization. The functional organization is characterized by a separation of the different functions that exist in a company. As for the divisional organization, it consists in organizing the teams into several autonomous and distinct divisions which each manage a field of activity. Thus, the matrix structure allows companies to cut out and combine their functions or services with their divisions (products, customers, geographical areas, etc.) or their projects.
The matrix structure is an organization that is both multidimensional and decentralized. On the one hand, it is not a question of a structure where “powers” are superimposed, but rather of a crossing of similar skills on a single and unique project. On the other hand, the matrix structure implies a delimitation of the competence frameworks and the “territories” of each employee.
Born in the United States in the 1950s, the concept of matrix structure was initially designed to help manage projects in the aeronautics sector before experiencing a craze in the 1970s. This organization is particularly suitable for companies that work on a multitude of projects and whose teams are multidisciplinary. It particularly finds its place in companies involved in long and complex projects and which work in a rapidly changing environment.
In addition to adopting an approach based on the project mode, the matrix structure responds to a need for transversality, but also for cooperation. The fact that employees collaborate on a common project makes it possible to combine specializations by concentrating skills in the same division.
What are the principles of the matrix structure?
The matrix structure is an organization based on a principle of duality between the control and the management of a company. This means that teams must be accountable to two superiors:
- a permanent head of department who manages the function or division they occupy;
- a project manager who supervises them on a temporary assignment.
There are 3 types of matrix structures, giving more or less authority to the department head and the project manager:
- the strong matrix in which the project manager holds a greater part of the decision-making power compared to the department head;
- the balanced matrix where authority is shared between the department head and the project manager;
- the weak matrix in which the project manager has less authority compared to the department manager.
It is possible to set up a matrix structure at several scales: at the level of a company or at the level of a subsection. If the organization is done at the company level, the subsections can be coordinated in order to carry out a project. If it is at the level of a sub-section, the employees are then grouped together in business poles. However, their tasks must be coordinated so that they can carry out a project involving several professions.
Why use the matrix structure?
More complex than the hierarchical structure, the matrix structure nevertheless has many advantages. First of all, this type of organization makes it possible to set clear project objectives. The consolidation of these objectives is important when the teams report on their progress to the department head and the project manager. Within a matrix structure, resources can be used efficiently, since teams include specialists from different departments. These experts, as well as the equipment, are shared between the projects, which reduces the time required for their realization and the overhead costs. Thanks to the matrix organization, information also flows more fluidly between teams.
The matrix structure promotes decision-making among managers and employees. It is also a type of organization particularly interesting for employees who benefit from specialized technical skills and who do not like routine in the work. Indeed, the regular transition from one project to another is a real source of motivation for these employees. The fact that team members constantly change over the different projects allows each employee to demonstrate adaptability.
Employees who work within a matrix structure are in direct contact with several people, and in particular their managers, which implies more internal communication and the creation of cross-functional relationships between employees. This allows teams to collaborate on particular projects and also consolidates the formation of autonomous work groups. The matrix structure then gives rise to a sharing of knowledge and feedback beneficial to the general operation of the various services.
The matrix structure also helps companies to be innovative by creating new products or services. This avoids teams having to agree on each new project launch. This type of organization also ensures optimal coordination between the various functions.
The implementation of a matrix structure offers other significant advantages to companies:
- better transversality of skills;
- sharing of specialized technical skills between employees and managers;
- the efficiency of the project mode, even for the most complex projects;
- better coordination between functions and synergies between expertise;
- the creation of economies of scale.
Examples of companies that use the matrix structure
Many companies around the world have implemented a matrix structure.
Matrix structure according to Boeing
Boeing is the first company to adopt this type of organization, and has been for many decades. The American aircraft manufacturer benefits from different units belonging to both:
- to their branch of specialty such as the engine, the wings or the guidance system;
- to their department by type of project or program, such as aircraft models.
Matrix structure according to Philips
The multinational Philips also adopted the matrix structure in the 1970s. In this company, the teams justify their work to a geographical manager and a product division manager.
The matrix structure according to Europcar
In 2017, Europcar, a company specializing in car rental in Europe, initiated a matrix organization with a specific goal: to boost digitization and instil a new state of mind within the teams.
The matrix structure according to Nestlé
The Nestlé brand is also among the companies that operate under the matrix structure. The company has a decentralized organization which provides subordinate subsidiaries with a high level of independence. Although major strategic decisions are made at the highest level, many day-to-day operations are assigned to local units or departments.
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