Matrix Organizational Structures

Matrix Organizational Structures

In recent times the two types of organization structures which have evolved are the matrix organization and the network organization. Rigid departmentalization is being complemented by the use of teams that cross over traditional departmental lines.

In recent times the two types of organization structures which have evolved are the matrix organization and the network organization. Rigid departmentalization is being complemented by the use of teams that cross over traditional departmental lines.

Matrix structure is the combination of two or more structures explained above. This is the structure that is adopted by most of the multinational companies. In a matrix context, the business support functions also ensure coordination across the business functions within each sub-function (such as procurement, production, marketing, distributing, etc.). They are also responsible for specialization related coordination, training, development and learning, problem solving, development of norms, standards and guidelines for functioning as appropriate to the area of specialization.

For example, we can have a functional structure and then assign a manager for each product. Some employees will have two managers: functional manager and product manager.

Main Features of Matrix Structure

Shared Services is the centralization of service offering at one part of an organization or group sharing funding and resourcing. The providing department effectively becomes an internal service provider. The key is the idea of 'sharing' within an organization or group.  To accelerate business benefits such as lower cost of operations and improved business processes, the vast majorities of organizations centralize some functions into shared services and outsource various others to third-party service providers because some support functions tend to be similar across industries.

The matrix structure is a combination of the product and functional organization and is usually created for executing a project which requires the skilled services of a functional man as well as the specialized knowledge of a product man. Large turnkey projects in specialized fields require a matrix structure.

The distinguishing characteristic of a matrix structure is that it operates under a dual authority. A person is accountable to two bosses at the same time, one his usual boss and the other his boss for the duration of the project. Obviously the problems emanating from this type of structure relate to conflicting roles and authority arising out of an ambiguous demarcation of authority and responsibility. In a Matrix Structure, people typically have two or more lines of report. This type of organization may combine both functional and divisional lines of responsibility, allowing it to focus on divisional performance while also sharing specialized skills and resources.

Related Links

Creation Date Thursday, 29 December 2022 Hits 2115

You May Also Like

  • What are Management Entities?

    What are Management Entities?

    In this article we will discuss various types of "Management Entities". Various types of operational units, are created by management, to effectively run, manage and control their business. Different types of functional units, and divisional units, are widely used across industry.

  •  Network Organizational Structures

    Network Organizational Structures

    The newest, and most divergent, team structure is commonly known as a Network Structure (also called "lean" structure) has central, core functions that operate the strategic business. It outsources or subcontracts non-core functions. When an organization needs to control other organizations or agencies whose participation is essential to the success, a network structure is organized.

  • Legal Structures in Businesses

    Legal Structures in Businesses

    Businesses not only vary in size and industry but also in their ownership. Most businesses evolve from being owned by just one person to a small group of people and eventually being managed by a large numbers of shareholders. Different ownership structures overlap with different legal forms that a business can take. A business’s legal and ownership structure determines many of its legal responsibilities.

  • Matrix Organizational Structures

    Matrix Organizational Structures

    In recent times the two types of organization structures which have evolved are the matrix organization and the network organization. Rigid departmentalization is being complemented by the use of teams that cross over traditional departmental lines.

  • Understanding Joint Ventures

    Understanding Joint Ventures

    A joint venture (JV) is a business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets.  A joint venture takes place when two or more parties come together to take on one project.

  • GL - Unearned / Deferred Revenue

    GL - Unearned / Deferred Revenue

    Unearned revenue is a liability to the entity until the revenue is earned. Learn the concept of unearned revenue, also known as deferred revenue. Gain an understanding of business scenarios in which organizations need to park their receipts as unearned. Look at some real-life examples and understand the accounting treatment for unearned revenue. Finally, look at how the concept is treated in the ERPs or automated systems.

  • Five Core General Ledger Accounts

    Five Core General Ledger Accounts

    Typically, the accounts of the general ledger are sorted into five categories within a chart of accounts. Double-entry accounting uses five and only five account types to record all the transactions that can possibly be recorded in any accounting system. These five accounts are the basis for any accounting system, whether it is a manual or an automated accounting system. These five categories are assets, liabilities, owner's equity, revenue, and expenses.

  • Defining Reporting Dimensions

    Defining Reporting Dimensions

    Multitude of these legal and operational structures clubbed with accounting and reporting needs give rise to many reporting dimensions at which the organization may want to track or report its operational metrics and financial results.  This is where business dimensions play a vital role.

  • Global Business Services (GBS) Model

    Global Business Services (GBS) Model

    Global business services (GBS) is an integrated, scalable, and mature version of the shared services model. Global Business Services Model is a result of shared services maturing and evolving on a global scale. It is represented by the growth and maturity of the Shared services to better service the global corporations they support.

  • Operational Structures in Business

    Operational Structures in Business

    Large organizations grow through subsidiaries, joint ventures, multiple divisions and departments along with mergers and acquisitions. Leaders of these organizations typically want to analyze the business based on operational structures such as industries, functions, consumers, or product lines.

Explore Our Free Training Articles or
Sign Up to Start With Our eLearning Courses

Subscribe to Our Newsletter


© 2023 TechnoFunc, All Rights Reserved