Their functional manager can help them with their knowledge and skills, and the product manager can give direction to their work and efforts. Team members are familiar with each other since they work in the same area. It is essential to involve both functional and project specialists. The matrix structure, which is a combination of structures, has, therefore, become popular. These tall organizations are the most traditional organizational structure. A functional organization is the most common type of organizational structure. Matrix structures have come about as a result of coordination problems in highly complex industries such as aircraft manufacture 4. Which organizational structure works the best for the companys overall sustainability. Matrix departmentalization may slow down decisionmaking and thus all managers must understand the rules of the game. The principles of design are fit, differentiation, integration. In choosing a companys organizational structure, management is searching for the one that will bring the companys moving parts together into a wellcoordinated, efficient and effective unit.
Projectized organizational structure has both advantages and disadvantages. The official reporting relationships are clearly known to every manager. There must be strategies in place to deal with the potential negatives which like to occur under this structure. Usually, this necessitates an educational effort so that none feel that their decisionmaking is threatened, and nonmanagement members learn how to function with two managers. Oct 26, 2014 hence to fulfill this vision nsa has design a new structure. Apr 23, 2019 these challenges are not about the structure or the strategy, they are about the way people work together in the matrix. Use of outside experts without incurring expenses for travel, logging and downtime. In this video, disadvantages of a matrix organization, i will talk about some of the potential disadvantages of operating a matrix organization, and how to deal with them. 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.
Advantage more specialized in certain fields, communication is excellent because of the knowledge one has about the function of the job, easier to work as a team to get better results. Main advantages and disadvantages of the three generic project organizational structures structure advantages disadvantages functional there is no need to negotiate and compete with other areas for resources. All of the companies define its organizational structure to determine the reporting relationships that will exist in the company. The advantages and disadvantages of a hierarchical organizational structure involve communication, innovation, and collaboration. Definition a matrix organization is defined as an organization where people have to report to more than one boss. Advantages and disadvantages of organizational structures.
After providing abbrief introduction into the discipline, it identifies and discusses eight major characteristics of matrix organizations. Experts and equipment can be shared across projects. Ford and randolph suggested a number 4 of paradoxes between the advantages and disadvantages of matrix structures. Jan 28, 2019 matrix organizational structures propose two management structures in single organization. Advantages of matrix organization structure better coordination and control the main responsibility of the project manager is to maintain coordination among interrelated factors of a particular project. Best practices in matrix organizational structures gssa georgia. Pros and cons of 3 project organizational structures. Oct 29, 2018 there are three common organizational structures, and project managers work in all of them.
For example, the total work activities of an enterprise may be divided into various functions like purchases, production, marketing, finance. The design get popularity in 1970s and 80s when big companies like ibm, hp, nestle and citi bank used this structure. The 6 key advantages and disadvantages of a matrix. Matrix structure mainly encompasses functional and project structures. What are the advantages of organizational structure. The vast majority of large complex organizations today operate some form of matrix organization. In a functional organization structure, the project. The official reporting relationships are clearly known. Organizational structures what are the advantages and the. Nov 21, 2018 from the hierarchal organizational structure to flatter, less bureaucratic structures and the teamoriented matrix, all organizational structures have advantages and disadvantages in key areas. The matrix structure is for this reason advantageous in stimulating organizational performance with minimal drawbacks equally discussed thereafter. The 6 key advantages and disadvantages of a matrix organization.
This flow of power in two ways is the reason why the organizational structure is actually called the matrix structure. Apr 01, 2012 advantages and disadvantages of organizational structures. Matrix organizational structure of a construction company example ganesh 20 8 table 4 advantages and disadvantages of matrix organizational structure advantages disadvantages takes advantage of both the function and the project or the department structures leading to flexibility in responding to changes. The formal organisation in usually delineated by an organisational chart and job descriptions. For example, the linkages among functionbased groups and business type divisions enable the company to responsively address market demand. Dealing with the disadvantages of a matrix organization. There are powerful reasons to introduce a matrix organization structure thats why many of the worlds leading organizations have one. Besides, it is essential to maintain a balance among these authorities to bring about uniformity in the organizational performance. This is a type of organizational structure which facilitates a horizontal flow of skills and informations. Advantages of a projectized organizational structure the project team members directly report to the project manager which enables decision making faster. Hence to fulfill this vision nsa has design a new structure. This is an ideal example of a matrix structure where authority is flowing vertically as well as horizontally.
It saves time, travel expenses and eliminates lack of access to experts. Matrix organizational structure in project management. Advantages and disadvantages of matrix organizational structure free download as word doc. The matrix organizational chart can benefit the organizations bottom line by getting the maximum value from employees. Virtual teams can be organised whether or not members are in reasonable proximity to each other. They also create uncertainty within the workplace, as workers may not know who needs to receive information about the work theyve done. Accountabilities and authority can be less clear and are often shared. The advantages and disadvantages of flat management.
The advantages and disadvantages of a matrix organizational structure make it easier to move resources to the most important projects which need to be completed. Matrix organizational structures propose two management structures in single organization. Advantages and disadvantages of matrix modern organization. Additionally, this report examines best practices gleaned from the literature and from organizations that have successfully implemented and maintained such structures. The matrix structure offers organizations an effective system for managing projects.
The development of particular type of organizational structure defines the. A matrix organizational structure is one of the most complicated reporting structures a company can implement. The layers give bureaucracies a vertical thrust when laid out in an organizational chart. Organizations choose their organizational structure based on many factors like. Bannerman,19 refers to literature that indicates the following risks. Suppose your company has two projects that require an it professional on the team. Different organizational structures that combine to form starbucks matrix structure are divisional structure, functional structure, and teambased structure. The functional structure serves as the stem while the project structure lasts as long as the project at hand is running.
Below are some of the advantages of this organizational structure. The key advantages and disadvantages of matrix organizational structures. Ford and randolph 4 suggested a number of paradoxes between the advantages and disadvantages of matrix. List of the disadvantages of the matrix organizational structure. Advantages and disadvantages of functional structure essay.
Matrix structure demands a high level of inter personal relations and skill. The key advantages and disadvantages of matrix organizational. Efficient information exchange one of the advantages of implementing the matrix organizational structure in a business is that it can lead to an efficient exchange of information. Disadvantages of organizational structure include lopsided management lines, increased bureaucracy, slowed communications, and increased inflexibility. Departments work closely together and communicate with each other frequently to solve issues. Because matrix structures retain an organizations functional structure, they allow for the rapid creation of efficient largescale. The matrix organizational structure pros and cons can include money on both sides of the scale. There are many advantages of organizational structure, especially structure that is clear and definite.
Lets take a look at the advantages and disadvantages of each so you know what youre up against when you join a new structure. Advantages and disadvantages of functional organizational structure in this type of organization, the emphasis is on managing some functions wherever the function may be performed in the enterprise. The matrix structure superimposes on the functional structure maintaining a smooth flow of operations. The matrix structure followed by starbucks coffee is one of the best organizational structure examples. This note introduces basic principles of organizational design and the advantages of several common organizational structures. Apr 15, 2020 disadvantages of organizational structure include lopsided management lines, increased bureaucracy, slowed communications, and increased inflexibility. First up is the functional structure, which may be hierarchical and permanent. Pdf characteristics of matrix structures, and their. The type of organizational structure product, function, or matrix may also have only one of these potential disadvantages. A variation of the line and staff organizational structure is the matrix structure matrix organization structure is sometimes called project management structure. If you want to learn more about organizational structure types in project management you should check out our.
Read on to learn why a company might implement a matrix structure, and the advantages and disadvantages for both. This departmentalization allows greater operational efficiency because the employees have their skills and knowledge to be shared within the. It has been recognized that the matrix organizational structure has applications far beyond that of project program or product management 12. There are three common organizational structures, and project managers work in all of them. All managers must bear that there are two organisations they must deal withone formal and the other informal. If the it department shares its personnel, the company doesnt have to add employees to complete the projects. This enables to use resources efficiently and prevents losses. Flat management, or even a networkbased organizational structure, can provide multiple benefits for organizations at a time when the number of. It is often used when the firm has to be highly responsive to a rapidly changing external environment. The matrix organization structure can deliver this, provided people have the skills to make the matrix work. Our jobs as leaders is to help deliver the advantages and prevent the potential disadvantages. The matrix structure diagram is a hybrid of divisional and functional structure, which is used for reporting levels both horizontally as well as vertically. Read on to learn why a company might implement a matrix structure and the advantages.
There can still be a lot of conflict in the workplace. Bannerman,19 refers to literature that indicates the. If no effort is made to deal with the negativity, then a company becomes more likely to fail because. This paper investigates the characteristics of matrix structures and their relationships with drivers of project success, such as communication, collaboration, and. Management layers characterize bureaucratic organizations. Advantages and disadvantages of matrix organizational structure.
Matrix organization structure advantages and disadvantages. The development of particular type of organizational structure defines the authority, responsibility relationship. Following the matrix structure, the employees are given more tasks instead of hiring new people. An analysis of the main project organizational structures. However, in this discussion the matrix will only be considered from the viewpoint of its most highly developed application that of project management. More people become involved in the decision process, which can slow things down. Matrix organizational structure advantages and disadvantages. These disadvantages may not always persist in an organization. Meetings and bureaucracy can rise as the amount of coordination and communication increases. What are the disadvantages of organizational structure. Best practices in matrix organizational structures december 20. The key advantages and disadvantages ofbmatrix organizational. Projectized organizational structure advantages projectcubicle. The matrix organization structure encourages democratic leadership style which incorporates the input of project team members before managers make decisions.
Second, the authority is flowing horizontally sideways through product 1, product 2 and product 3 managers. Advantages and disadvantages of matrix organizational structure advantages of matrix organizational structure. From the hierarchal organizational structure to flatter, less bureaucratic structures and the teamoriented matrix, all organizational structures have advantages and disadvantages in key areas. Organizational structure examples, types and advantages. There are several advantages of a matrix structure. Jan 17, 2015 matrix structure demands a high level of inter personal relations and skill.
Matrix organizational structure is really beneficial to the employees. The different organisational structures described above have their own advantages and disadvantages. Types of organisation structure with advantages and. Interestingly, different team members for a certain project will continue reporting to their functional managers as well as the project managers in place. Advantages disadvantages of simple traditional organization structure organization structure is concerned with creating different departments and division of work. Efficient lines of communication enhance productivity and allow for quick. As a result the solution is not in changing the structure, but in updating the way we work.
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