It entails achieving a functional and product or process focus. It vertically structures each department with roles from president to finance and sales departments, to customer service, to employees assigned to one product or service. The future will likely bring functional, product and matrix organizational structures. The matrix structure offers organizations an effective system for managing projects. Since these authorities flow downward and sideways, this structure is called the matrix organization structure. Functional structure divides the organization based on specialized functional areas such as production, marketing, and sales for the purpose of management. Matrix structure is a type of organizational structure where employees are grouped concurrently by two different operational dimensions. Traditional organizational structures come in four general types functional, divisional, matrix and flat but with the rise of the digital marketplace, decentralized. As it acquired each small company, top management first encouraged the owners and general managers. A functional organizational structure is a structure used to organize workers. However, as companies continue to evolve and increase. The matrix structure has three distinctive components 1. The table below outlines the interplay between these two dimensions in a matrix organizational structure. The authority of a functional manager moves vertically downwards, and the authority of the project manager moves sideways.
Ge used one basic structure throughout its organization. A company will choose their organizational structure based on. The six most common approaches to organizational design include simple, functional, divisional, matrix, team and network designs. Best practices in matrix organizational structures gssa georgia. A matrix organisation combines traditional functional hierarchy i. The matrix structure superimposes the product structure laterally over the functional structure recommended reading. They are grouped based on their specific skills and knowledge. While a functional organization structure may be more common in long established companies, a matrix organizational structure could benefit startups since its. It is formulated with the desire to maximize the strengths and minimizing the weakness of the both structures. Matrix structures combine the benefits of traditional functional and product.
Essentially, the organization used a functional structure. But it also involves much complexity and demands much communication so that all organizational managersparticularly the project and the functionalcan effectively and efficiently work together. The structures diagrammed and described are functional, product, customer, geographic, divisional or mform, matrix, amorphous, and hybrids. In many organizations, a combination of these forms is used. Though matrix organizational structures have been implemented since the late 1970s, their. As per the pmbok guide, the matrix organization is a combination of the projectized and the functional structures. Difference between matrix and functional structure. Organizational structure is a way or method by which organizational activities are divided, organized and coordinated. A manager in a matrix organization has two or more upward reporting lines. The result is creation of dual line of authority that is balanced by top managers. In a matrix structure, reporting channels form a grid, and employees typically report to both a functional manager as well as a product manager. A matrix is an organizational structure that shares power among two or more dimensions. The matrix is thus a multidimensional structure that tries to maximize the strengths and minimize the weaknesses of both the project and the functional structures.