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Making Matrix Organizations Actually Work

• Herman Vantrappen
• Frederic Wirtz

No org structure is without flaws, but matrices don’t deserve their bad reputation.

Most discussions about matrix organizations usually quickly devolve into a debate between two sides: those who love to hate the matrix, and those who hate to love the matrix. The former claim that a matrix structure slows decision making and obfuscates accountability. The latter retort that a matrix structure is an inescapable prerequisite for lateral coordination in large complex businesses. From our two decades of experience with organization design, we tend to side with the latter. In fact, we may even belong to a third camp, those who love to love the matrix. But our love is conditional upon its sparing and wise use.

• Herman Vantrappen is the managing director of Akordeon, a strategic advisory firm based in Brussels, and the coauthor of Fad-Free Strategy (Routledge, 2020).
• FW Frederic Wirtz heads The Little Group advising companies on organization design issues worldwide. He can be reached at [email protected].

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Revisiting the matrix organization

Matrix organizations have been around for decades, stimulating vigorous debate between supporters and detractors for nearly as long. 1 1. For a classic critique, see Tom Peters, “ Beyond the matrix organization ,” McKinsey Quarterly , September 1979. They remain prevalent at the large number of companies that need to bring functional centers of excellence together with business-specific people and processes. Eighty-four percent of respondents to a recent Gallup survey, for example, were at least slightly matrixed.

About the research

The findings of the study on matrixed employees are based on a Gallup panel web survey, completed by 3,956 full-time employees aged 18 and older, that was administered between April 8 and April 27, 2015. The Gallup panel is a probability-based longitudinal group of US adults selected through random-digit-dial (RDD) phone interviews over landlines and cell phones. Address-based sampling methods are also used to recruit panel members. The Gallup panel is not an opt-in panel, and members are not given incentives for participating.

Our sample for this study, which used Current Population Survey figures, was weighted to be demographically representative of the US adult population. For results based on this sample, the maximum margin of sampling error is plus or minus two percentage points at the 95 percent confidence level. Margins of error are higher for subsamples. In addition to sampling error, the wording of questions and practical difficulties in conducting surveys can introduce error and bias into the findings of public-opinion polls. The survey responses were matched with those of a US workforce panel survey administered in November 2014 to study the engagement and other work-related factors of matrixed employees. Separately, Gallup’s meta-analysis of the relationship between employee engagement and business outcomes included more than 49,000 business units across 49 industries.

The results of the organizational studies are based on subsets of McKinsey’s global database for the Organizational Health Index (OHI). This index is a survey-based assessment of organizational health, defined as the ability to perform over the long term. That kind of performance is based on three capabilities: aligning around strategies, executing them, and adapting when necessary. 1 1. Organizational health is operationally defined by scores on nine organizational outcomes: direction, leadership, culture and climate, accountability, capabilities, coordination and control, innovation and learning, motivation, and external orientation. Unlike employee engagement, they are assessed by survey questions about the organization’s effectiveness in these areas rather than their impact on employees. The index includes data from more than two million respondents and over 2,000 unique surveys. Organizations in the top quartile for health collectively outpace organizations in the bottom quartile in total returns to shareholders (TRS): they earned three times the annual TRS of bottom-quartile organizations over the nine-year period of the study. 2 2. See Aaron De Smet, Bill Schaninger, and Matthew Smith, “ The hidden value of organizational health—and how to capture it ,” McKinsey Quarterly , April 2014.

The study focusing on the accountability practices of organizations was conducted using data from 254 unique companies and 781,224 respondents, collected in 2014 and 2015. This study determined the rank order of practices structurally related to organizational-health outcomes. The order of the practices was based on the magnitude and significance of the standardized betas produced by regressing the outcome on the direct practices. To determine the rank order of the related practices, we first regressed the outcome on the direct practices and then (using a stepwise regression) entered the remaining practices. Practices that explained a minimum incremental 1 percent of the variance were labeled related practices. Their rank order (like our treatment of direct practices) was based on the incremental amount of variance explained.

That survey, covering nearly 4,000 workers in the United States, highlights some benefits for employees in matrices, particularly in areas related to collaboration. At the same time, the survey suggests that these employees feel less clear about what’s expected of them than their nonmatrixed counterparts do. This problem has consequences: Gallup research indicates that clarity of expectations is a foundation for building an engaged workplace that performs at high levels. Furthermore, according to McKinsey’s Organizational Health Index (OHI), clear and accountable roles are among the most important drivers of organizational health. Taken together, the Gallup and McKinsey findings underscore how important it is for executives and line managers to address the role ambiguity that’s all too common in matrix organizations. (For more on the research behind these two studies, see sidebar, “About the research.”)

Ubiquitous and unexceptional

Eighty-four percent of the US employees Gallup surveyed were matrixed to some extent. Forty-nine percent served on multiple teams some days (we categorized them as slightly matrixed), and 18 percent served on multiple teams every workday but with different people, though mostly reporting to the same manager (matrixed). The remaining 17 percent reported to different managers in their work with different teams (supermatrixed).

Most employees in matrixed organizations, according to the survey, aren’t terribly engaged with their jobs. (Gallup defines employee engagement as involvement in and enthusiasm for work.) These figures are consistent with what Gallup has found in the workplace at large over a decade of study. They are alarming, given the relationship between worker engagement and vital business outcomes, such as productivity, profitability, and customer perceptions of service quality. 2 2. James K. Harter et al., The relationship between engagement at work and organizational outcomes , Gallup, February 2013, gallup.com. The survey does suggest a modestly positive relationship between the four categories of organization and employee engagement, which rises slightly across them (exhibit).

Collaboration and clarity

Beneath the surface, we found some areas (particularly collaboration) where matrixed organizations performed better than less matrixed ones and others (related to role clarity) where they did worse. The differences in engagement at more and less matrixed organizations suggest advantages and disadvantages that may cancel one another out.

A key area of strength for matrixed organizations lies in collaboration—a heartening discovery, since cross-company teamwork is one of the chief aims of many matrices. We asked employees of slightly matrixed, matrixed, and supermatrixed organizations about the benefits of being on different teams. Supermatrixed employees were generally about twice as likely as slightly matrixed ones to say that their organizations not only helped them collaborate more effectively with coworkers, do their best work, and serve customers well but also stimulated bottom-up innovation. Supermatrixed employees were also somewhat more likely than those in the other categories to say they had received recognition or praise during the past seven days, that their opinions counted, and that their fellow employees were committed to doing quality work. These are key elements in the overall engagement of employees and suggest that relationships and collaboration among employees in matrixed organizations and their peers and superiors really are better.

On the other hand, only a minority of the supermatrixed employees strongly agreed with the statement, “I know what is expected of me at work,” compared with 60 percent of the nonmatrixed. This reflects a common complaint about matrixed organizations—that the structure gives rise to a lack of clarity about responsibilities, expectations, and who reports to whom. Workers in the three matrixed groups were more likely than nonmatrixed ones to say that they need clear direction from project leaders and communication between their managers and project leaders to prioritize their work most effectively.

Also, employees in the matrixed categories were more likely than their nonmatrixed counterparts to say they spent their days responding to coworkers’ requests and attending internal meetings. Such responses are not surprising in an environment where employees receive instructions and feedback from multiple managers and work with a range of people to complete projects. These are also probably factors in the critics’ assertions that the matrix structure can slow decision making, blur lines of communication, stifle productivity, and hinder organizational responsiveness and agility. 3 3. For more, see Billie Nordmeyer, “Disadvantages of organizations with the matrix approach,” Houston Chronicle , chron.com; and Eric Krell, “Managing the matrix,” HR Magazine , Society for Human Resource Management, April 1, 2011, shrm.org.

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The link to organizational health.

Interestingly, role clarity and related accountability practices emerge as among the most important drivers of organizational health, and ultimately performance, in McKinsey research based on the Organizational Health Index (OHI). McKinsey has consistently found that improving role clarity improves accountability, an outcome that is a critical component of the overall health-index score. In fact, organizations with high accountability scores have a 76 percent probability of achieving top-quartile organizational health—more than triple the expected rate. What’s more, the independent effects of role clarity are so powerful that they affect OHI scores directly, one of only four management practices (among 37) that do. 4 4. Since the impact of these practices transcends geography, industry sector, and company size, we call them power practices. Besides role clarity, personal ownership (another accountability practice), strategic clarity, and competitive insights are also in this select group. Overall, we assessed the 37 management practices through empirically derived survey items that were independent of the outcomes they predicted. We assessed the independent effect of role clarity after statistically controlling for shared or overlapping effects among the 37 practices.

These findings are consistent with work by McKinsey’s Suzanne Heywood and others showing that organizations can mitigate the complexity associated with matrices through clear accountability and targets for individuals. 5 5. See Suzanne Heywood, Jessica Spungin, and David Turnbull, “Cracking the complexity code,” McKinsey Quarterly , 2007 Number 2; and Suzanne Heywood and Julian Birkinshaw, “ Putting organizational complexity in its place ,” McKinsey Quarterly , May 2010. Further reinforcing these findings is the academic literature suggesting that higher levels of the ownership mentality predict higher levels of collaboration, organizational commitment, and corporate citizenship, as well as reduced levels of behavior that deviate from workplace norms. 6 6. James B. Avey, Bruce J. Avolio, Craig D. Crossley, and Fred Luthans, “Psychological ownership: Theoretical extensions, measurement, and relation to work outcomes,” Journal of Organizational Behavior , 2009, Volume 30, Number 2, pp. 173–91; doi 10.1002/job.583.

The Gallup survey does suggest that role clarity takes a hit in matrixed organizations. Yet it also indicates that super-matrixed employees were more likely to have received recognition or praise in the previous seven days and to believe that their opinions counted. McKinsey research suggests that these features of the employee experience in matrixed companies have a positive impact on organizational health: two management practices—recognition and employee involvement in direction setting—are important drivers of two of the OHI’s outcomes—motivation and direction—which, along with accountability, are meaningful components of the overall OHI score.

Priorities for matrixed managers

Given the importance of role clarity and accountability to organizational health and, ultimately, performance, addressing the role ambiguity that pervades matrixed companies is a critical priority for their leaders, who should help employees by continually setting clear expectations aligned with the direction of the business. This clarity should cascade into frequent conversations between managers and their direct reports about the specific role each person plays in advancing the company’s objectives. Consultative (as opposed to authoritarian) leadership practices can contribute meaningfully to accountability, according to McKinsey’s OHI research.

It is also imperative to maintain day-to-day lines of communication to root out and dispel ambiguity and ensure that everyone is consistently on the same page. This is true at the organizational as well as the team level: Gallup research shows that managers should not save critical conversations for once-a-year performance reviews—engagement flourishes when employees receive regular, actionable feedback on their progress.

Read our latest thinking on matrix organizations

Last, the matrix structure is notorious for frequently obscuring lines of accountability, so leaders and managers should ensure that all employees understand whom they answer to and the duties for which they are responsible. The importance of regular discussions to reclarify expectations as work demands change is compounded in matrix organizations. And highly engaged employees thrive in a system where everyone is accountable for his or her work.

Michael Bazigos, head of organizational science at McKinsey, is based in McKinsey’s New York office. Jim Harter is the chief scientist of workplace management and well-being for Gallup’s Workplace Management Practice in Omaha, Nebraska.

The authors wish to thank Gallup’s Sangeeta Agrawal, Annamarie Mann, and Susan Sorenson, as well as McKinsey’s Lili Duan, Dominik Deja, Dinora Fitzgerald, and Yuan Tian, for their contributions to this article.

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The matrix organizational structure: Pros, cons, and insights

One of the hardest things to get right at any organization, especially as it scales, is how teams are organized and work together. You also have to factor in whether certain employees will work well with certain managers, potential personality conflicts, areas of growth for high performers, and the list just goes on…

At the end of the day, what really matters is how well you can serve the needs of your customers. Hence, you need to find an organizational structure that balances the needs inside the company while still delivering a high-quality product or service.

If engineers only work with and report it to other engineers, they likely are getting great mentorship and management; however, their teams may not be fully equipped to solve all of the problems that matter to customers. But, if engineers were always interspersed with other disciplines, their teams might be great. It’s all in customer problems, but their managers might need to gain the skills to help them grow as engineers.

Matrixed organizations are a potential way of balancing these problems and finding the best of both worlds. In this article, we’ll learn about the pros and cons of a matrix organizational structure, examples of how it works, and more.

What is a matrix organizational structure?

Having a matrix organizational structure is a way of potentially solving this problem. Employees are organized into both functional groups and product groups.

In a matrixed organization, each employee in the company has:

• A team that they’re a member of that organizes the work they do
• A manager who helps them grow their skills, guide them toward the next promotion, and discusses compensation

In a matrix organization, it’s unlikely that your career manager is also the one directing your work (likely with the exception of engineers).

This allows organizations to group people together into teams that allow them to best solve customer problems. At the same time, it’s still encouraging and enables mentorship from employees who can help other employees grow and understand the work that they do.

The dual-reporting structure of matrixed organizations helps balance the need for specialization and the need for cross-functional collaboration . However, matrixed organizations are more complex to run and involve more setup and maintenance.

What is an example of a matrix organizational structure company?

Matrixed organizations are very common in the technology world, especially in software development. Most teams that create software that goes out to customers are in some form of a matrix structure.

The matrixed org structure is the default for most of the technology world that produces B2B or B2C products. Product teams at Google, Facebook, LinkedIn, Amazon, and most startups organize into a matrixe structure to give each team the right mix of autonomy and accountability. This is because (typically) no individual person in a software company has the full skill set to build and maintain high-quality software and then take it to market.

To make a great software product, you need great engineering, great design, an understanding of customer problems, a solid business strategy, the ability to measure and understand the impact of the future you release, and more.

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In the modern tech industry, it’s much more common for employees to specialize in one of these areas, e.g., become software engineers, product managers, designers, data scientists, or marketers.

To get all of the skills you need, you need to group these people together on a team, like this:

These are commonly referred to in the industry as product teams. Depending on the type of software or product that a team is working on, they will have:

• 4–8 software engineers with various skill sets
• One engineering manager
• 1–2 data scientists or analysts
• 1–2 designers
• One product manager

Each of the people on this team will have a separate career manager, so the product manager will report to a director of product management, the designers will report to a head of design, etc.

However, the product manager and engineering manager will likely direct the work that this team does with partnership from the rest of the team.

What are the pros and cons of the matrix structure?

There are both pros and cons to structuring teams this way. Advantages include assembling the best skills for the problem, easier re-organizations, and more cross-department collaboration. Cons include its complexity and overhead, stakeholder management, and the difficulty of staying organized and efficient.

Let’s dive a little deeper.

Pros of a matrix structure

Assembles the best skills for the problem

By forming teams with diverse skill sets, you have the option of assembling strong teams that can hopefully build the best product for your customers.

Each team in the company doesn’t have to have the exact same composition — you can customize who’s working on what problem and still keep a relatively neat organizational structure.

This means that if your team was focused on customer acquisition, it might include folks from the marketing team. Whereas, if you just focused on backend optimization of the code base, you wouldn’t need a designer. This allows you to assemble the skills that you think will best solve the problem for your customer and hopefully get you to the best outcome.

Makes re-organizations easier

While reorganizing teams is never easy, it is easier to change people’s functional grouping than their career managers.

The most important relationship that someone has with a company is with their manager. Numerous studies show that whether or not an employee likes their manager is the #1 leading indicator of whether they’ll stay or leave.

As companies grow and evolve, which is especially the case in the technology world, you’re likely going to need to change the team structure to fit the current goals of the company.

The way that you need to organize your company when you have 40 employees is going to be very different than when you have 200. Using a matrixed structure means that you can reshuffle the functional teams without running the risk of changing people’s managers.

Enables cross-department communication

The more teams that are built up from people across the departments the more organically information will flow between the departments.

Needless to say, it’s easier for engineers to understand what design is doing when they sit together in a cross-functional team all day.

You tend to have less siloing between the different departments in a matrix organization.

Cons of a matrix structure

Complexity and overhead

When you create the two layers of reporting to make a matrix organization work, you’re increasing the complexity in the company. The increasing complexity of the company adds management costs and likely requires more skilled managers.

Whenever you’re doing employee reviews, you need to get the perspective of each employee from both their functional manager and their career manager.

It’s harder for their career manager to fully understand the work that they’re doing because the career manager likely needs to see their day-to-day progress.

More complicated stakeholder management

Because most of the heads of each department are no longer directly involved in the day-to-day work of all of their employees, the need to find dedicated stakeholder management processes that work for the size and the scale of the company becomes more important.

In a matrix organization, you can no longer assume that your manager is aware of 100 percent of the things that your team is doing. You need to find ways of servicing and getting buy-in for the work that will have the biggest impact in the company but also potentially carry the biggest risks.

Difficulty staying organized and efficient

When you’re pulling together people with different skill sets and perspectives, you need to have a way of keeping work organized and efficient so that your team is churning out as many valuable things to a customer with the highest degree of confidence they can.

Virtually all of the ways modern software teams stay organized (scrum, agile, etc.) arose from the need to keep teams of diverse skill sets and interests on track and accountable for important projects.

Most of the modern product development workflow — concepts like product reviews, design reviews, specification documents, business requirement documents, user stories , story points, etc. — arose from the need to explain scope and timelines to other employees with a different skill set than you.

If everyone in the team had the same skill set, passing requirements between each other would be much easier.

This complexity is worth the cost of better solving customer problems, but it still is a notable disadvantage of the matrix organization.

Conclusions and key takeaways

The matrix organization has become the standard practice of the majority of technology companies and you can find this structure at all big-name technology players such as Google, Microsoft, Facebook, Uber, Amazon, and more — especially in departments that develop products or work on Hardware devices.

A matrix structure is something that all companies should seriously consider as their products become more complex and you become more reliant on employees with specialized skill sets who need to collaborate across departments.

The way that employees are organized is one of the foundational elements of company culture and the way in which work gets done. Finding the right structure for your team and company is key to success.

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4 Matrix Organizational Structure Examples (+ Benefits and Templates)

November 22, 2022

If you’re struggling with managing multiple teams and projects, a matrix organization structure can make all the difference. In layman’s terms, the matrix organizational structure is just a way of relaying information between all team members across multiple departments. 

For instance, members of different teams report to project and functional managers (marketing, finance, production managers, and so on), who then report to the chief executive officer. 

This improves cross-team communication and eliminates the need for team members to align or realign whenever a new project kicks off. 

So if you want to know the following:

• What a matrix organization structure is
• The different types of matrix structures
• Why it’s a better way of running projects
• How to build your own matrix
• Some critical examples from prominent companies 

Then you’ll love this in-depth guide. 

Ready to enter the matrix? Let’s get started.

What is a Matrix Organizational Structure?

How does a matrix organizational structure operate and what are the benefits, 1. philips example, 2. starbucks example, 3. engineering and marketing department, 4. advertising agency example.

In the classic, top-down organizational structure, the CEO stands at the very top while the COO (chief operating officer), CFO (chief financial officer), and department managers come next. 

In a horizontal structure, copywriters report to the creative director, who reports to the CMO, who then reports to the CEO. You get the point. Reporting is linear, and everyone from marketing, sales, design, and development, to finance and HR teams follow the same reporting structure.

The traditional top-down structure is less complex than the matrix organizational structure. For one, the matrix organization structure may involve team members reporting to both their department and functional manager and project managers that also report to their department managers.

That’s why the top-down organizational structure is tree-like while the matrix organizational structure has a rectangular shape. 

It’s worth mentioning that the matrix organizational structure unites and balances out several types of organizational structures. It brings in project managers a new chain of command besides functional managers, which is why some like to name it the two-boss matrix. 

Working on large-scale projects where a diverse set of talent is included, project managers:

• Manage talent across departments and create solid and diverse project teams,
• Maximize the resources that are already at their disposal,
• Help everyone realize how essential teamwork is, and encourage team members to collaborate, communicate, and deliver on time and within budget. 

Ultimately, this contributes to creating better copy, products, and customer experience. 🤝

Types of matrix organizational structures

Matrix organizational structures can be either weak, balanced, or strong, depending on how the power between project and functional managers is deployed. 

However, don’t be led by the names since a weak matrix is not necessarily worse than the strong one, which differs from project to project, from one company to another, and these roles are rather fluid. 

Project managers have very little authority and decision-making power in a weak matrix. This kind of matrix is named weak because functional managers are in charge of the project budget and timeline, and project managers’ authority is super limited.

In balanced matrix structures, team members report to department and project managers with equal power and authority. The balanced matrix could be the best one since it eliminates the potential clashes between leaders, keeps communication open, and makes it easy to get to successful project delivery. 

As you can already conclude, in a strong matrix, project managers have more authority than functional managers to allocate resources properly and plan budgets with a free hand.

Some people find the matrix structure either confusing or overwhelming simply because it typically involves several chains of commands and multiple reporting structures. The truth is, it’s way less complicated than it seems at first! 

If you create a thoughtful project plan , assign and manage assets most efficiently, and develop a communication plan, you’ll be good. 👌 

Team and cross-team collaboration and shared resource planning result in higher productivity rates within most matrix organizations. The matrix structure makes up for the weaknesses of the single-boss structure, and this duality of authorities can contribute to better products or services. 

Now, let’s take a look at some of the benefits of implementing a matrix organizational structure!

Fosters cross-departmental communication

Unlike the top-down-organizations, the matrix structure encourages communication between team members and their respective functions and project managers.

We know dealing with two (or sometimes even more) managers and reporting to them may sound a bit off. However, engaging with key decision-makers can actually facilitate the exchange of information and expertise and improve organization-wide relationships. 

 Scheduling appointments regularly is a great option to strengthen the coordination process, big time. 

Improves employee engagement

Being a part of multiple teams and reporting to multiple managers increases employee engagement . The reason for this is simple. It makes them feel like an active part of any project. Employees love when they can make a difference and contribute to getting the project from start to finish. 

Other than that, by recruiting internally, you will save some money you’d otherwise spend on overhead costs if you’d hire new staff every time you’d work on a new product or service. 

This also gives your employees a chance to break the monotony of their work routine, helps them expand their skill set, achieve goals at a faster pace , and deliver projects faster too. 

Allows leaders to set clear project goals

Reporting progress to department heads and project managers and reporting to senior management contributes to achieving greater clarity on objectives, solidifying project goals, and delivering faster. 

Strengthens teamwork

The matrix allows team members to establish dynamic connections with each other and stimulates the development of creative ideas, all of which lead to enhanced and seamless team collaboration. 

4 Matrix Organizational Structures Use-Cases and Examples

In this section, we’ll go through four use cases and examples of matrix organizations to see how other successful companies have implemented this approach. These examples were all created using the ClickUp Whiteboard feature, where you can start with a blank canvas or use one of ClickUp’s templates to help you get started quicker!

This example visually explains something we’ve already mentioned in one of the previous sections. The matrix organization has a rather triangular shape, while the top-down organization has a tree-like shape. 

Thus, in the first example, you can see that sales, finance, and IT teams report to commercial, finance, and technology managers, that then report to both the national organization and product division (PD). This explains those two chains of commands that were also mentioned several times throughout the article. 

The second example displays reporting to a single authority. Sales, finance, and IT teams report to commercial, finance, and technology managers, who report to the national organization that reports to the product division. 

Here’s an example of how Starbucks applies the matrix organizational structure. We used the Whiteboard to visually represent the reporting structure the most popular coffeehouse applies to their business. ☕

Let’s imagine that these four geographic divisions (North America, Asia, Latin America, and EMEA) are project managers. 

So, we have senior VPs who report to executive VPs who report to group presidents, who then report to one of the aforementioned divisions. Finally, each division reports to the global entity, which then reports to the CEO. 

Again, the Whiteboard view came in handy, and we wanted to show how marketing departments can apply the matrix organization. In a nutshell – you can easily differentiate project managers from the content director, creative director, director of demand generation, and director of product marketing. 

Team members work together on tasks and report to project managers and the directors mentioned above. Project managers report to the director of the project manager, while the director of the project manager and other directors then report to the head of marketing (CMO), who reports to the CEO. 

We can apply this kind of organizational structure to other departments of any engineering company (finance, operations, etc.), and using call center software is also proving to be a valuable tip for enhancing communication channels.  

Last but not least, here’s how an advertising agency can apply the matrix structure to their business. 

You can see that various team members (brand specialist, blog manager, video producer, etc.) report to department managers (marketing, production, creative, and content managers) and a project manager two.  

Project manager two reports to project manager one, who reports to the head of PM. Functional managers then report to the head of marketing, production, and editorial director, while both of the head of PM and the head of marketing, production, and editorial director report to the agency president. 

These are just a few matrix examples that you can use as inspiration; there are various ways to structure a balanced matrix organization. If you’d like to create your own matrix organization, you can easily do so in ClickUp’s Whiteboard feature, like I did to create the examples above.

You can start with a blank canvas and use the drag-and-drop feature to easily build your ideal organizational structures . And if you need help getting started or simply want to get a solid framework to start with, then turn to the Organizational Chart Whiteboard Template to give you a helping hand!

Your Turn to Create Your Own Matrix Organizational Structure 

We’ve cleared the air about the fab matrix organizational structure for you and tried to explain how you can make it work well when working on complex projects. 

You can optionally choose to embed your company’s chart on your website to enlighten customers about the modus operandi of your business. 

The idea of reporting to multiple leaders improves collaboration, makes employees more engaged, sparks creativity, eliminates overhead costs, and results in delivering better solutions.  However, to be able to implement the matrix structure, you also need to work with a tool as powerful as the structure itself–ClickUp!

Start using it today to get access to hundreds of features that’ll help your entire organization manage and deliver projects efficiently and tools to help you create an effective matrix organization. 🚀

Guest Writer:

Alladdine Djaidani  is a digital marketer and the founder of  HustlerEthos.com

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Matrix Organizational Structure: Examples, Advantages, and Disadvantages

Fahad Usmani, PMP

September 1, 2022

I am sure that you might have heard of the matrix organizational structure , which is the most popular organizational structure adopted by medium to large organizations. They like this type of organizational structure as it provides the flexibility required to run their operations.

This flexibility makes the matrix structure attractive, as projectized and functional organizations are rigid by nature. 

A functional structure’s rigidity makes changing workflow or procedure difficult. Organizations using functional structures face challenges with in-house projects. Since projects are temporary, businesses cannot keep project management staff permanently.

A projectized organization has a temporary structure. However, if the business has many projects, it will need some permanent staff to manage administrative, finance, legal issues, etc. Put simply; they need some permanent staff to take care of regular activities. An all-temporary staff will not suffice.

This is where a matrix organizational structure comes in—it has the best of both worlds. It allows organizations to choose the structure to suit their requirements, providing them with an efficient and flexible structure.

Projectized and functional structures represent two extreme points of a string, while the matrix organizational structure is balanced. It is a mix of two or more types of organizational structures.

This combination helps organizations achieve higher efficiency, readiness, and market adaptation. They can respond faster to customer demand with less product launch time. This structure is suitable for organizations operating in a dynamic environment.

However, a matrix structure is not suitable for a fixed business environment. For example, organizations with production operations don’t typically require changes to their processes, so they should adopt a functional structure.

Matrix Organizational Structure

According to the PMBOK Guide, the matrix organization is a combination of the projectized and the functional structures.

In a matrix organizational structure, the authority of a functional manager flows downwards, while the influence of the project manager flows horizontally. Hence, it is called a matrix organizational structure.

Employees may report to several managers in an organization with a matrix structure.

For example, let us say you are an engineer working in a functional department. Your organization starts a project and needs an engineer to assist the project manager. You may be assigned to the project for a short period or be called whenever they need your services. You will report to two bosses.

The matrix structure is a composite of the projectized and functional structure . The appeal of this structure is that the knowledge, skills, or talent of an employee can be shared.

Functional managers will look after the functional part of the project. They may decide on the staff assignments. The project manager will have authority over the administration of the project. For example, the project manager will carry out the work, follow up on the schedule, evaluate performance, etc.

Working in a matrix organization is challenging. Your role will be complex because you have many bosses. Firm work priorities, a clear reporting system, and defined responsibilities are important to avoid confusion and provide a better work environment in a matrix organization.

Large and multi-project businesses take advantage of the matrix organizational structure so they can move employees whenever and wherever their services are needed. The matrix structure has the flexibility of maximizing the organization’s talent by viewing employees as shared resources.

Types of Matrix Organizational Structure

You can classify the matrix structure into three categories:

• Strong Matrix Structure
• Balanced Matrix Structure
• Weak Matrix Structure

Strong Matrix Organizational Structure

In strong matrix organizations, the project managers have full authority and a full-time role. They control the budget, and a full-time project management team will report to them. In this way, a strong matrix structure shares characteristics with a projectized organization.

The functional manager has a minimal role in a strong matrix organization.

Balanced Matrix Organizational Structure

In balanced matrix organizations, project and functional managers share authority. The project manager has a full-time role, while the project management staff will be part-time. Here, both managers control the budget.

Weak Matrix Organizational Structure

In weak matrix organizations, project managers have limited authority. Their role is part-time, and no administrative staff report to them. Their position is similar to a coordinator or an expediter . In a weak matrix structure, the functional manager controls the project budget.

A weak matrix organizational structure shares characteristics of a functional organizational structure.

Advantages of a Matrix Organizational Structure

The following are a few advantages of a matrix organizational structure:

• Highly skilled and capable resources can be shared. This allows open communication and knowledge sharing within the organization.
• The matrix structure is dynamic, allowing employees to communicate across department boundaries and creating a pleasant, cooperative work environment that helps to integrate the organization.
• Employees can enhance their skills and knowledge by taking part in different projects. The matrix structure provides a fertile environment to learn and grow.
• Employees are skilled in functional departments. Project teams can access these capable employees whenever their services are needed.
• Because of job security, employees will be faithful and perform well, meaning the efficiency of a matrix organization is higher.
• Resource usage is optimal. You have access to experts from your organization, and you can share equipment between projects. Negotiation works smoothly in matrix organizations.

Disadvantages of a Matrix Organizational Structure

The following are a few disadvantages of a matrix organizational structure:

• Employees may have to report to two managers, which adds confusion and may cause conflict. This especially happens in a balanced matrix organization where both bosses have equal authority.
• An authority conflict may arise between the project manager and the functional manager.
• Employees may be confused about their roles and responsibilities. Work priorities can cause conflict among employees if they are not well defined. This happens when employees are assigned a new task different from what they expected.
• There can be competition for scarce resources, which may cause hostility and impair work.
• It is perceived that matrix organizations have more managers than required, which increases overhead costs.
• The workload tends to be high in a matrix organization. Employees have their regular work along with the additional project-related work, which can exhaust them. Employees may ignore their regular responsibilities if they are overtaxed.
• A matrix structure is expensive to maintain. Organizations have to spend more to keep resources, even when they are not busy, as some are needed only for a short duration.

Example of Matrix Organizational Structure

In 1970, Philips started using the matrix structure for the first time. The company’s managers were reporting to their production head and geographical managers. It became so successful that other multinational organizations such as General Motors, Hughes Aircraft, and Caterpillar Tractors adopted the same structure.

How to Overcome the Disadvantages of a Matrix Organizational Structure

Some disadvantages of a matrix structure can be countered in the following ways:

• Organizations should foster close cooperation between the project manager and the functional manager to avoid confusion and conflict.
• Communication should be well defined, and it should occur in all directions. This is important to gain support from executives, managers, supervisors, and employees.
• Organizations must clearly communicate their vision, objectives, and goals to their employees.
• Power distribution between the project and the functional manager should be balanced properly. Any imbalance may impact the effectiveness of operations.
• Any conflict between the project manager and the functional manager must be resolved as quickly as possible and in private.
• Roles and responsibilities should be clear and communicated to employees to avoid confusion.

Big organizations have dynamic environments. They need to respond quickly to customer requirements and market demand, so a matrix structure is suited to them. This allows for better resource utilization and provides experts when needed. The matrix organizational structure tries to blend the best of both worlds since power-sharing between the project and functional managers changes according to the matrix. Though matrix structure adds complexity, the benefits far outweigh it.

I hope this blog post has increased your understanding of the matrix organizational structure. 

Are you working in an organization with a matrix structure? Please share your work experience through the comments section.

This is an important topic from a PMP exam point of view, and you may see a few questions about it in your exam; therefore, make sure to review this post and feel free to discuss it further in the comments. 

Reference: Alternative Organizational Structures 1976 and “Is the Matrix Fad a Fast-Fading Flower?” 1984, Bob Youker.

I am Mohammad Fahad Usmani, B.E. PMP, PMI-RMP. I have been blogging on project management topics since 2011. To date, thousands of professionals have passed the PMP exam using my resources.

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One Comment

MGD: The matrix structure exactly describes how our organization’s project management function is deployed. I would say that we have a weak matrix structure in that we have virtually no authority over our associates who execute the technology components of our projects. Rather, our authority is more of a moral authority, in that following the plan and executing to the project requirements are within the scope and context of our organization’s stated mission and core values. So, it’s up to us as project managers to encourage and enlist cooperation from our comrades rather than compel and require their attention and efforts. That, after all, is leadership, the art of influencing others so as to obtain their willing cooperation toward the accomplishment of a goal or mission.

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Case Study – GSK

How to introduce the new organisation structure to employees in a sufficient and meaningful way?

This way of organizing, originally designed by American Space program organization NASA, typically forms teams of people from different disciplines and departments (horizontal) without having them leave the structure of their respective departments (vertical). This ‘matrix format’ is especially appropriate for large projects (e.g. space travel) and product development (e.g. vaccines), but it does pose a set of specific challenges.

Optimal collaboration

At GSK, matrix teams are involved in the entire end-to-end chain of activities surrounding the development of new vaccines:

• Identifying the societal/medical need
• Research & development
• Launching the product in a commercially successful manner
• Further development

Since the organization’s hierarchical structure is broken by the matrix team, the teams need to develop a separate structure to ensure:

• Clear project leadership
• Prioritizing available resources
• Optimal collaboration without disturbing the vertical balance

Reflection and theory

By creating room for reflection and relevant theoretical models, InContext has managed to develop a simulation with a tremendously steep learning curve. The game remains challenging, frustrating and fun throughout the full two-day program. As a result, participants immediately experience their team mates’ frame of reference, with immediate consequences for the quality of their collaboration.

The simulation was first rolled out in 2013 and is currently played several times per year at multiple sites in Belgium, Italy, and the USA

Company simulation LifeSaver

GSK and InContext have jointly composed a tailored program to help teams who develop vaccines grow into cohesive and united teams with an eye for the big picture; the company simulation LifeSaver. The program presents a set of important dilemmas:

• How do formal lines of communication hold up against informal contacts/decisions?
• How do you align individual and team objectives with organization objectives; how can we promote an enterprise mindset?
• How do you balance personal leadership and the willingness to execute tasks?

InContext developed a company simulation that precisely reflects the specific dilemmas that are relevant in vaccine development at GSK.

The game is played by 30 participants who compete with each other in two teams. What is important is that participants don’t fulfill a role similar to their real-life role, but instead play a role they are not familiar with. This helps them to explore an unknown situation with new demands, while they get to look at the organization from a fresh perspective. In doing so, they enlarge their frame of reference and understanding of other people’s perspectives. Participants immediately experience the effect of their behavior in the simulation. This is enhanced by the speed of the game which runs through a ten year process in a mere two days.

Some other case studies

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Fugro Fleet Services

Case Study – PWC

Case Study – Philips

Case Study – Pharma

Case Study – Panalpina

Case Study – Novartis CHROmium

Case Study – Mammoet

Case Study – KPMG

Case Study – Interxion

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What is a matrix organization and how does it work?

A matrix organization is a company structure where teams report to multiple leaders. The matrix design keeps open communication between teams and can help companies create more innovative products and services. Using this structure prevents teams from needing to realign every time a new project begins.

How can you empower teams to move quickly on complex projects without getting bogged down by stakeholder reviews and approvals? Organizational structure may be the answer. Most work environments have chains of command in place so that everyone has clarity around decision-making authority. 

A matrix organization differs from this classic structure since team members report to both a project manager and a department lead. In the guide below, we’ll discuss what a matrix organization is and how you can use one for complex projects. 

What is a matrix organization?

A matrix organization is a work structure where team members report to multiple leaders. In a matrix organization, team members (whether remote or in-house) report to a project manager as well as their department head. This management structure can help your company create new products and services without realigning teams.

How do matrix organizations work?

Matrix organizations have two or more management reporting structures. While this may seem confusing at first, team members typically have a primary manager for their department. 

Reporting to a department manager functions similarly to a traditional work structure. For example, team members working in IT report to the IT department head. The IT department head reports to the vice president of their division. Eventually, all reporting relationships lead to the CEO. 

The difference in a matrix structure is that team members also report to project managers. Projects often require work from members of various departments like IT, marketing, and finance, which is why having a separate manager for individual projects makes sense. 

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Types of matrix management

There are three types of matrix management, with each type giving more or less authority to the project manager. You can visualize these management types on a scale with the project manager on one end and the department manager on the other. 

Weak matrix

In a weak matrix, the project manager has the least amount of decision-making power compared to the other matrix management types. When the project manager has limited authority over the project, the matrix becomes weak because the project budget and timeline is in the hands of the department head. Creating a communication plan can keep communication from getting lost in a weak matrix. 

Balanced matrix

In a balanced matrix, the department head and the project manager have equal authority and team members report to both of them. This keeps communication open between everyone in leadership roles and allows the project to move forward smoothly. 

Strong matrix

In a strong matrix, the project manager has most of the decision-making power over the project, while the department head has more limited authority. This creates a strong organizational structure because the project manager has full ownership over the project. The department head can oversee the project but doesn’t make key decisions.

Advantages of the matrix organization structure

The matrix organizational structure is more complex than the hierarchical structure, but it has many advantages. Some advantages of the matrix design include clear project objectives, an efficient use of resources, free-flowing information, and training for project managers. 

Clear project objectives

The matrix organization design can ensure greater clarity on project objectives . When your team reports their progress to both the project manager and the department head, solidifying project goals is critical. When the project manager feels supported by other members of senior management, project organization becomes a priority.

Scenario: Let’s say your team is working on an app development project. Because you’re using a matrix structure, the IT developers report to you as the project manager and the IT department head. The project objective is to create a keyword search app for marketers to use on-the-go. When the IT department head and the project manager communicate a clear project objective to the IT developers, the app gets developed quicker. 

Efficient use of resources

The matrix structure allows for an efficient use of resources because teams include specialists from various departments. This reduces overhead costs and the amount of time needed to complete a project. In a hierarchical structure where every team reports to only one manager, there are fewer managers per team. These teams may require more time to create one project deliverable because they don’t have members with different specialities.

Scenario: The team creating the keyword research app may involve specialists from the IT department, the finance department, and the marketing department. When these team members successfully report to their department heads and their project manager, they increase team productivity , save time, and get the project done more efficiently. 

The matrix team reduces costs because without a combined group of specialists, companies would have to restructure teams and potentially hire new team members every time a new product or service is developed. 

Free-flowing information

Working in a matrix structure creates a free-flow of information between teams because the team reports to multiple leaders. While team members must remember to relay information in a hierarchical system, the matrix makes information flow a requirement. Reporting information to multiple leaders may seem tedious, but with the right project management system in place, it requires little or no extra work from team members. 

Scenario: If the development team on the keyword research app only reported to the project manager, information about a bug fix could get lost. However, relaying information to the IT department head is easy to remember when it’s part of the matrix process. 

Training for project managers

The unique structure of the matrix organization gives project managers a large amount of responsibility. Project managers must lead their team through the project lifecycle. This structure challenges project managers and trains those who want to be cross-functional managers in other departments.

Scenario: During this project, your team encounters some bug fixes and a delay in the project timeline . As the project manager, it’s your responsibility to work with the IT department head to successfully handle all issues. In doing so, you discover a personal interest in IT—and a potential career opportunity in the future. 

Team retention

The matrix organization has a great track record from team member retention because when specialists are placed together, the product team stays strong. These team members work under functional department heads and are then assigned to project managers. Specialists often enjoy working together, and it can improve project performance. 

Scenario: During the keyword research app project, the project team consists of various IT, marketing, and finance specialists because these team members understand the ins and outs of creating an application for phone users. This team of specialists will likely stick together to work on many projects in the future.

Disadvantages of the matrix organization structure

Like the hierarchical reporting structure, the matrix organization also has disadvantages. Most of the disadvantages stem from this structure being complex. While complex designs can have benefits when they work, they also have the potential to cause conflict and make things messy.

Complex reporting style

The complexity of the matrix organization can be a disadvantage because teams may have trouble knowing who to report to and when. While the intention of the matrix is to benefit teams, it may complicate projects and muddy the overall process. 

Solution: The best way to prevent a reporting failure is to ensure every member of the matrix understands who to report to and how to do so. Using an intuitive project management platform that facilitates cross-team work can make the matrix structure less complex. 

Slow response time

The complexity of the matrix can lead to slow response times, which can delay projects. Slow response times come from the need to report information to multiple people. Having more people involved is a good thing, but the downside is that relaying information to more people takes time. 

Solution: Using a project management system will solve the issue of slow response times with the matrix structure. As a central source of truth, Asana can prevent duplicate work and increase visibility among teams and leadership. 

Conflicting guidance

Conflicting guidance occurs if the project manager and department head aren’t on the same page. While the matrix structure is meant to encourage teamwork, it may do the opposite depending on the personalities involved. 

Solution: To prevent conflicting guidance, establish a system that allows managers to interact directly with one another. Team members can avoid feeling like they’re caught in the middle if managers are aligned on project goals and stay on the same page.

Potential friction

The main difference between the matrix and hierarchical structure is that team members report to two managers in a matrix structure. This makes the matrix organization more complex and puts more responsibility on team members. Having two managers can give team members more feedback and guidance, but it can also result in friction.

Solution: To prevent potential friction, it’s essential for the department head and the project manager to communicate. It shouldn’t be the team’s role to choose between managers when conflict occurs. Whether in person or through virtual systems, managers can prevent friction by setting clear project objectives from day one and working together to create a successful product. 

Juggling priorities

It can be difficult for team members to juggle priorities in a matrix structure if managers don’t work together. If the department head believes their tasks are most important and the project manager thinks the same, the team may have trouble determining which manager’s guidance to prioritize. 

Solution: When team members have trouble prioritizing tasks because of miscommunication among managers, it’s up to the managers to discuss the tasks of the team and determine what should be done first. Most issues that have the potential to arise from the matrix structure can be solved with strong collaboration, communication, and clarity across teams. 

Improve the matrix structure with project management tools

Using project management tools is the best way to make the matrix structure work well. With project management, the project manager and the department head can align around project goals, plan work together, and create a clear line of communication. And when these pieces are in place, team members have the clarity they need to work efficiently and achieve your project objectives

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Matrix Organization in an Industrializing Society: Case Studies from Brazil

Cite this chapter.

• James R. Hemsley 3 ,
• Roberto Sbragia 3 &
• Eduardo Vasconcellos 3  

Part of the book series: NATO Conference Series ((SYSC,volume 7))

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Organizations with matrix structural characteristics are currently the subject of considerable academic interest, although the industrial world has, de facto, been using these organizational forms for a considerable time. Almost all published studies on them to date have been made in the U.S. and W. Europe, and it is therefore of considerable interest to study whether this organizational structure is appropriate in the industrializing world and if so under what conditions.

This paper considers the role of matrix organizations in Brazil, a prime example of a rapidly industrializing country. Three case studies are analyzed in some depth to provide a basis for a discussion of the nature and role of matrix organizations in Brazil and the apparent differences between matrix organizations in “developed” and “developing” societies.

Visiting Professor; Research Fellow, Vanderbilt University: COPPEAD.

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Shannon, R.E. “Apollo/Saturn Program Management”, Chapter 3. Source book of Saturn benefits, UARI Report, University of Alabama in Huntsville, Research Institute, December 1970.

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Galbraith, J. “Organization Designs”, Business Horizons, February 1971.

Kolodny, H.F. “Matrix Organization Design, Implementation and Management”, unpublished Ph.D. dissertation, Graduate School of Business Administration, Harvard University, 1976.

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Cardoso, F.H. “Empresario Industrial e Desenvolvimento Econômico” Ed. Difusão Europeia do Livro, São Paulo 1964.

Bresser Pereira, L.C. “Empresarios e Administradores no Brasil”, Ed. Brasiliense, São Paulo 1974.

Alves de Souza, S. “Administração Numa Sociedade em Desenvolvimento: o Caso do Brasil”, unpublished MBA thesis, COPPEAD, Federal University of Rio de Janeiro, 1976.

Hemsley, J.R. “Measurement of Organizational Change and Development: A Brazilian Case Study”, paper presented at EURO II, Stockholm, 1976.

Galbraith, J. “Designing Complex Organizations”, Addison Wesley, Menlo Park, 1973.

Hemsley, J.R. “Matrix Organizational Structures in Brazilian Organizations”, Internal Research Paper, COPPEAD, Federal University of Rio de Janeiro, 1976.

Emery, F.E. and Trist, E.L. “The Causal Texture of Organizational Environments”, Human Relations, Vol.18, 1965.

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Hemsley, J.R., Sbragia, R., Vasconcellos, E. (1978). Matrix Organization in an Industrializing Society: Case Studies from Brazil. In: Bryant, D.T., Niehaus, R.J. (eds) Manpower Planning and Organization Design. NATO Conference Series, vol 7. Springer, Boston, MA. https://doi.org/10.1007/978-1-4613-4622-7_16

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Matrix Management case studies

Clients of our training and consulting services often ask us for case studies and company examples of matrix management or the implementation of matrix organization structures.

Much of our work with clients is confidential and covered by non-disclosure agreements so we can’t offer them as case studies, and I dislike the “case study methodology” as I think it spends to much time analysing what someone else did. Every organization has its own culture, history and special situations that make transferring learning directly from one to another a challenge.

We prefer to create common scenarios and tools that clients can use to find the right solution for their own organization. These tools embed the relevant learning from a wide range of organizations.

Having said this, we try to be helpful and it can be interesting to read case studies on what other organizations have learnt. If you are planning an implementation, or want to improve your matrix management, it can’t hurt to read these case studies: Harvard has a number of summaries of case studies , (which you now have to pay for) including:

• Acer America
• Becton Dickinson
• Corning Glass
• General Motors
• Novartis Pharma
• Pinnacle Mutual Life Insurance Co.
• Procter & Gamble

… as well as a couple of classic articles on matrix management and matrix organizations:

• Matrix Management: Not a Structure, a Frame of Mind
• Problems of Matrix Organizations

And, of course don’t forget to check out our other matrix management insights and matrix management training .

Hope you find these useful. Let me know if you find any other good case studies, articles or other matrix organization resources.

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Industrial and Commercial Training

ISSN : 0019-7858

Article publication date: 30 January 2009

The purpose of this article is to examine and ultimately suggest the most effective method with which to evaluate employees operating within a matrix organization. The authors will demonstrate the tools, corporate participation and acceptance levels required in order to ensure employee and manager “buy in” and implementation.

Design/methodology/approach

This article consists of a comprehensive review of literature demonstrating functional areas within a matrix organization as well as employee evaluation methods within various organizations. It is presented in three sections: defining a matrix organization; demonstrating effective evaluation methods and strategies; and finally how the two should work together. Critical incidents are interspersed throughout the article in order to demonstrate how the research compares to the methods employed by a leading aviation engineering firm.

Ineffective evaluation methods within matrix organizations can lead to lower employee morale as well as an ambiguous understanding of employee roles within such an organization. Employee and management buy in and support of an evaluation system and its goals are crucial to the success of the program. The multi‐rater system appeared to be most effective.

Practical implications

Several tools exist to help employers effectively evaluate their employees in a constructive and effective manner. Among them are clear job description and corporate structure, followed by a review of performance by both functional and project managers. Additionally, peer evaluations can prove to be constructive and contribute positively to the development of the employee. This article can be a practical aid for managers in a matrix organization that need to successfully and constructively evaluate employees, but are having difficulty doing so in an effective method.

Originality/value

Given the limited research with respect to evaluations within a matrix structure, this paper demonstrates an understanding of a subject that has not been adequately explored. The article demonstrated in “real time” the critical synthesis for PA and the matrix organization – an absence noted in the literature.

• Performance appraisal
• Matrix organizations
• Performance management

Appelbaum, S.H. , Nadeau, D. and Cyr, M. (2009), "Performance evaluation in a matrix organization: a case study (part 3)", Industrial and Commercial Training , Vol. 41 No. 1, pp. 9-14. https://doi.org/10.1108/00197850910927705

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Organizational Structure Case Studies Samples For Students

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