Matrix Organization

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Description of Matrix Structure. Explanation.


Definition Matrix Organization. Description.

A matrix organizational structure depends on both vertical and horizontal authority and flow of communication (hence the term: 'matrix'). The traditional hierarchical, vertical structure is complemented by a horizontal structure.

The Matrix Organization (MO) is an organization structure that is matrix-shaped. It has 2 axes, rather than a pyramid-shape. The vertical hierarchy is overlaid by some form of lateral authority, influence, or communication.


Typical for MOs are their dual (or even multiple) command structures.

Employees must deal with dual lines of authority (violating the traditional "one-boss" or "Unity of Command" (Fayol) principle of management), dual sources of reward and punishment, dual reporting and communication channels, shared responsibility and accountability. This means working in a matrix structure from an employee's perspective can be quite challenging and even tricky; for one has to use all his / her interpersonal, social, and relational skills to manage multiple bosses.


MOs require extensive and very effective communication systems and can result in higher overhead because they create more management positions.

Typically, but not necessarily, it has product groups on the vertical axis and Strategic Business Units on the horizontal axis.

Teams of functional personnel (e.g., manufacturing, research and development, finance, and sales) report to a manager with profit responsibility bearing a title such as business manager, category manager, or new product manager. The functional personnel also report to their functional bosses, who are responsible for maintaining the quality of functional performance.

The MO is at the center of a continuum between purely functional type organizations and purely product type organizations. On the functional end of this continuum is the traditional hierarchical structure divided along functional, lines such as marketing, production, and accounting. On the other end of this continuum is the pure product organization. Here, a separate team is formed, duplicating the functional structure but organized under a product manager.


The MO was described by Jay R. Galbraith in a 1971 article called "MO Designs".

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