Matrix management is a type of organizational management in which people with similar skills are pooled for work assignments. For example, all engineers may be in one engineering department and report to an engineering manager, but these same engineers may be assigned to different projects and report to a different engineering manager or a project manager while working on that project. Therefore, each engineer may have to work under several managers to get their job done.
In other words,
* A matrix organization is a cross-functional work team that brings together individuals from different functional departments, product departments or divisions to accomplish a specific goal. * As a result, a dual-reporting organization structure is formed where each member of the matrix organization reports to the manager of the cross-functional team as well as the manager of the department that sourced the team member. The matrix organization is an adhocracy design that has four major disadvantages i.e. psychological stress, conflict, inefficiency and cost. Psychological Stress
* The matrix organization is dynamic in terms of both form and function. The team members, team structure, work roles and work role interfaces lack stability even within a project life cycle. However, the ability of an individual to adapt to change is in part based on the individual's aptitude for establishing human relationships. This conflict between the somewhat rapid fluctuation in the structure and function of the team and the individual's need for stable relationships can lead to team members experiencing psychological stress. Conflict
* A matrix organization does not exhibit clear lines of authority or responsibility in that the boss-subordinate relationship may not be clear. In addition, a cross-functional team member may receive one direction from a functional manager and a different direction from the cross-functional team manager. As a result, some individuals become disturbed by the ambiguity, and conflict may arise. In turn, high worker dissatisfaction and employee turnover may result. Inefficiency
* Multiple managers, conflicting policies and procedures, and contradictory loyalties can lead to ineffective management. In addition, infighting may occur between functional managers and cross-functional team managers who are each forced to compete for the time of the individual team members. Matrix organizations benefit from neither structural stability nor consistency of function, which also can lead to inefficiency of both the individual worker and business processes. In addition, the cross-functional manager may lack the authority to make critical decisions -- which greatly impedes project progress. Cost
* Workers are frequently chosen to participate on cross-functional teams because they possess a broad and diverse skill set. However, in general, the wages earned by an individual increase in relation to the skills he possesses. In addition, an individual usually performs functions in support of both the matrix organization and the functional organization, which can increase overtime costs for the organization. Also, more managers may be hired for the matrix organization, which also increases personnel costs. Finally, the lack of structural stability or routine functions leads to operational inefficiency and increased costs. Other disadvantages include:
* A conflict of loyalty between line managers and project managers over the allocation of resources. * Projects can be difficult to monitor if teams have a lot of independence. * Costs can be increased if more managers (i.e. project managers) are created through the use of project teams. Example:
1. I have worked in the Matrix Organization in my earlier organization, M/s. Mahindra and Mahindra Limited, Tractor division, Mumbai for 2 years, for the New Tractor (Horizon II – Arjun tractor) Hydraulics development Project....