Should Companies Adopt a Matrix Organizational Structure? Case Study

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Matrix Structure for Organizations

Within an increasingly complex commercial environment, the manifestation of matrix organisations is increasing. Matrix organisation provides a number of advantages, especially in professional-based organisations where there may be dual systems of accountability, from Phillips in the 1970's, through to wide range of modern day business, from consultants and accounting firms through to oil rig support companies. However, this paper does not describe what a matrix organisation is, but considers whether or not it is a viable form management, as employees are not only managed based on functional or departmental basis.

There are some significant resources associated with matrix organisations. The first is the ability to efficiently utilise resources, maximising the potential benefits of the intellectual capital that is within the company. This maximisation of resources also facilitates a greater level of coordination between different products and different projects. Most importantly, it maybe argued that the information flow which is created by matrix structure can be highly beneficial, as information can flow across a company, as well as up and down the traditional hierarchical lines, creating a greater level of information sharing, which may benefit departments in an organisation. Greater levels of information, as long as it is reliable, and can be processed in the correct manner, are also likely to lead to better decisions being made. For example, in a matrix organisation, there is less potential that two divisions into different countries undertake the same project in isolation, they would be more likely to identify a similar project taking place elsewhere, and bring resources together, or simply reduce the duplication.

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It may also be argued that increased social contact for employees is beneficial, not only in terms of sharing of information and learning from peers, but in the context of facilitating a higher level of self-management. Increased level of socialisation of employees is also known to be linked to higher levels of motivation, the sharing of information, and working across as well as up and down the lines of the matrix, creates the foundation for that socialisation, may also increase social commitment towards the organisation. The greater interaction between employees may also improve general employment relationship, and therefore commitment to the workplace as a result of their ability to feel involved.

There are also some disadvantages associated with matrix. The internal complexity can result in confusion and ambiguity. This is particularly problematic if an individual is working on multiple projects, and is answerable to different supervisors, who are both demanding results. Therefore, it can create a conflict of interests for the individual, which in turn can create stress and result in potential cognitive dissonance if they simply cannot get all the task completed.

Another disadvantage associated with the matrix structure is the difficulty in maintenance, as it causes complexity within a hierarchy. This in turn can increase costs for organisations, with the support structure that is needed to manage a matrix organisation. Some critics argue that this can result in double management costs, as there….....

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