Functional structure divides the organization based on specialized functional areas such as production, marketing, and sales for the purpose of management. While a functional organization structure may be more common in long established companies, a matrix organizational structure could benefit startups since its. It entails achieving a functional and product or process focus. Remedies of functional and operational issues will make up section 5 while the paper. The matrix structure superimposes the product structure laterally over the functional structure recommended reading. Traditional organizational structures come in four general types functional, divisional, matrix and flat but with the rise of the digital marketplace, decentralized. A matrix organisation combines traditional functional hierarchy i. The matrix structure has three distinctive components 1. Though matrix organizational structures have been implemented since the late 1970s, their. The matrix organization project management institute. Ge used one basic structure throughout its organization. As it acquired each small company, top management first encouraged the owners and general managers. It vertically structures each department with roles from president to finance and sales departments, to customer service, to employees assigned to one product or service. 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.
The table below outlines the interplay between these two dimensions in a matrix organizational structure. Concepts and f0rmats when two or more people work together to achieve a group result, it is an organization. A manager in a matrix organization has two or more upward reporting lines. Since these authorities flow downward and sideways, this structure is called the matrix organization structure. Matrix structures combine the benefits of traditional functional and product. Organizational structure is a way or method by which organizational activities are divided, organized and coordinated. In many organizations, a combination of these forms is used. As per the pmbok guide, the matrix organization is a combination of the projectized and the functional structures. Difference between matrix and functional structure. The matrix is thus a multidimensional structure that tries to maximize the strengths and minimize the weaknesses of both the project and the functional structures.
A functional organizational structure is a structure used to organize workers. In a matrix structure, reporting channels form a grid, and employees typically report to both a functional manager as well as a product manager. A matrix is an organizational structure that shares power among two or more dimensions. The matrix structure offers organizations an effective system for managing projects. The result is creation of dual line of authority that is balanced by top managers. They are grouped based on their specific skills and knowledge. Best practices in matrix organizational structures gssa georgia. It is formulated with the desire to maximize the strengths and minimizing the weakness of the both structures. However, as companies continue to evolve and increase. Essentially, the organization used a functional structure. The six most common approaches to organizational design include simple, functional, divisional, matrix, team and network designs.