Matrix Organizational Structure in Project Management– A Complete Guide With Examples

Originally Published September 14, 2022. Updated August 12, 2024.

What is a matrix organizational structure? 

A matrix organization is a company structure that is organized in a way that there are two or more ‘bosses’ in charge of every project. For example, instead of reporting only to department heads, employees also report to project managers. Part of the matrix structure definition is that managerial roles are fluid, changing based on a project’s needs.

How does the matrix structure differ from the typical hierarchical structure?

In the traditional hierarchical structure, there is one ultimate authority figure to whom employees report about all aspects of a project. In the diagram below, all employees in the creative agency have one boss to report to, namely the CEO.

In contrast, as shown in the matrix examples below, a matrixed environment requires employees to report to both the head of their line of work and a project manager. For example, the designer reports to the Team D Project Manager and the Executive Creative Director.

Matrix Structure Example

Credit: Instapage

What prompted the ‘invention’ of the matrix?

As companies have faced more complex problems and, therefore, more complex projects, the traditional hierarchical structure often proved to be a faulty system. Executives were unable to efficiently handle all the complexities involved in a project, and project objectives became blurred because only one person was sufficiently aware of the end goal.

The matrix management structure introduced a more complex yet more functional and streamlined way to organize companies. Some current examples of organizations using a matrix structure include 

 include the Nike matrix organizational structure and Starbucks.Credit: EdrawMind

What are the different types of matrix?

Now that we’ve defined the basic meaning of the matrix business structure, let’s delve deeper into the different types of matrix that different companies use. 

• Weak matrix organization:

  In the weak matrix model, the project manager has less decision-making power than the department head. This weakens the matrix because the department head has ultimate authority over the important aspects of the project, such as budget and timeline. Companies often use a weak matrix structure as a way to transition from the traditional hierarchical structure to the matrix structure. 

• Balanced matrix organization:

  In this case, the department head and project manager have equal authority. This matrix organization keeps the flow of communication open between team members and allows for fluid movement in project development.

• Strong matrix organization:

  Here, the project manager has more authority than the department head. The project manager has full ownership over a project and makes key decisions. The strong matrix allows for excellent project organization as team collaboration and cross-functional communication are improved.

What are the advantages of a matrix organization structure?

In the section below, we’ll clarify some of the matrix organizational structure advantages and disadvantages. The matrix structure can be quite complicated to introduce to the workplace, especially when employees are used to following a different type of hierarchy. However, many companies do use this structure and find that the advantages soon outweigh the ‘teething problems’ they had putting it into practice.

• Free-flowing information:

When team members are required to report to multiple leaders, there is less chance of information getting lost or forgotten about.

• Clear project objectives:

When more than one person is being updated on a project’s progress, project goals are naturally reinforced. Having clear project objectives allows teams to stay focused, which means a project can move at a faster pace.

• Efficient use of resources:

If specialists are on-site when team members need to relay information or ask questions, time is saved. When specialists are part and parcel of a project team, money is saved on hiring specialists for specific projects.

• High morale:

The matrix organizational structure increases the success rate of projects. The more successful a company is, the higher the morale among team members. Another reason for higher morale in a matrix structure is the fact that specialists enjoy working with specialists. Of course, the higher the morale, the better the work output.

• Retention of teams:

As mentioned above, specialists enjoy working together, which helps make projects successful. When this happens, the team will likely stay together for future projects, saving the company time and money in recruiting new personnel and rearranging teams.

• Training for project managers:

In a matrix organization, project managers are in an ideal position to increase their project management skills. This is because they are given many responsibilities in many areas.

What are the disadvantages of the matrix structure?

Although the matrix structure can be an ideal solution, definite disadvantages can make it an unideal solution for certain companies. After listing the possible problems that can arise with the matrix structure, we’ll discuss some solutions to these problems. 

• Complexity:

 In a matrix organizational structure, the number one issue is perhaps the complex nature of having more than one boss per project. Having to report to multiple managers can make things complicated for team members and disrupt the flow of information.

• Friction between managers:

Everyone has different views regarding how things should get done. For example, an executive might think that a certain amount of money should be spent on a project, while a project manager may think a different amount would be appropriate. The result of such friction is anxiety in the workplace, which is to be avoided at all costs.

• Confusion:

Following the above point is the confusion team members can experience in the matrix organization. Conflict between managers leaves team members confused as to how to proceed, which, of course, hinders performance and wastes time as employees try to work out how to proceed. 

• Unclear priorities:

Often, executives and project managers will have different priorities in a project. For example, the executive could be heavily invested in keeping project costs down, whereas the project manager could be more focused on the actual quality of the project outcome. In this case, team members will struggle to know what to focus on and will be wary of displeasing either one of their managers.

• Slow progress:

Relaying information to multiple people takes time. When team members need to report to two or more bosses, and those bosses both need to report back to team members, project progress can be slow.

What steps can be taken to help avoid these problems?

There is a two-pronged solution to the issues that arise with the matrix style organizations:

1. Communication 

Effective communication between project managers and project teams goes a long way in avoiding the aforementioned problems.

To avoid the issue of unclear direction that arises from multiple bosses, bosses need to communicate thoroughly about project goals and priorities, both before a project launches and throughout its completion.  

  2. Project management software

Most of the issues mentioned above are easily rectified using creative project management software.

If team members can relay information to more than one person at a time, the problem of forgetting to inform all relevant parties is solved, and time is also saved when there is no need to send multiple messages. With good project management software, it becomes possible for the multiple managers in a matrix system to be informed of progress transparently. They can then relay information back to team members using the same software.

Project management software also brings about clarity regarding project goals. A comprehensive project management tool allows all company members to see project goals clearly listed within a project management interface and the steps to be taken toward those goals.

Workamajig’s project management software is built for agencies, creating transparency and clarity in the workplace. With Workamajig, you can create a matrix structure within your company and forget about the potential problems we spoke about earlier–Workamajig’s easy, end-to-end system simply solves them all. 

Join the ever-growing list of happy Workamajig users today! Request a free demo to learn more about our solution.

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