Matrix organizational structure is often used in project management because it speaks to both the product of the project and the function of the. It is formulated with the desire to maximize the strengths and minimizing the weakness of the both structures. Types of organization structure entrepreneurial, functional, divisional, matrix, team based. When an organization is able to analyze the strengths and weaknesses of the various structures they can utilize it for improving their company. There are several types of organizational structures, including hierarchy, crossfunctional, and matrix. Types and classification of organisation structure with advantages and disadvantages. Functional management it is important to comprehend the role and difference of a functional leadership and product leadership, the role of project and program management within the framework of organization structure. It entails achieving a functional and product or process focus. For example, the company has an hr department, a finance department and a marketing department. Organizational structure is shown in organizational chart.
After the objectives of an organization are established, the functions that must be performed are determined. In this type of an organization, the company uses teams to complete tasks. Really useful for my assignment, by the way can you assist differentiate between functional organisational structures and functional. Unlike the other structures weve looked at so far, a matrix organizational structure doesnt follow the traditional, hierarchal model. The number of managers in the organization typically depends on the number of employees and on the type of 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. Functional structures are typically highly hierarchical. Defining and solving the organizational structure problems to improve the performanceof ministry of.
Matrix organization is a combination of two or more organization structures. A functional organization is the most common type of organizational structure. 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. Functional organizational structure, also referred to as centralised structure is one of several reporting structures a company could implement. Types of organisation structure with advantages and. Although all organizations are temporary in that they are constantly changing, the matrix is designed to be temporary and a particular organizational structure lasts only for the finite life of the project. Advantages and disadvantages of matrix modern organization.
This combination helps organizations achieve higher efficiency, readiness, and market adaptation. Its objective is to carry out operations smoothly and efficiently. A matrix structure is, in a sense, a combination and interaction of project and functional structures and is suggested to overcome the problems associated with project and functional structures individually. The six most common approaches to organizational design include simple, functional, divisional, matrix, team and network designs. While a functional organization structure may be more common in longestablished companies, a matrix organizational structure could benefit startups since its more nimble and responsive. Others moved beyond these early approaches and examined the relationship between organizational strategy and. Restrictions of contracting firms of classification a. The aim of matrix structure is combining the efficiency of functional structure with flexibility and sensitivity of multidivisional structure not only based on product logic, customer or geographical. A company will choose their organizational structure based on. Functional manager are in charge of specialized resources such as production, quality control, inventories, scheduling and marketing. The table below outlines the interplay between these two dimensions in a matrix organizational structure.
Traditional functional organization matrix organization. Weak matrix structures closely resemble a functional structure. The key difference between matrix structure and functional structure is that matrix structure is a type of organizational structure where employees are. Comparison covers functional, divisional and matrix organizational structures. Implementation and performance of a matrix organization structure. Concepts and f0rmats when two or more people work together to achieve a group result, it is an organization. Pros and cons of 3 project organizational structures. It is an established pattern of relationships among the components of the organisation. Types of organizational structures management study hq.
Dec 15, 2018 while a functional organization structure may be more common in longestablished companies, a matrix organizational structure could benefit startups since its more nimble and responsive. When it comes to matrix structure, the organization places the employees based on the function and the product. Design for collaboration and agility nick horney, ph. Advantages and disadvantages of matrix modern organization structure. This departmentalization allows greater operational efficiency because the employees have their skills and knowledge to be shared within the. The different organisational structures described above have their own advantages and disadvantages. 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. Matrix structure when it comes to matrix structure, the organization places the employees based on the function and the product. Organisational structure management essays essay sauce. Advantages and disadvantages of matrix modern organization structure better coordination and control adaptable to dynamic environment maximum use of resources participative management sufficient time to top. These competitive advantages are essential in interacting with the industry environment, which involves the strong force of competition shown in the porters five forces analysis of starbucks corporation.
Introduction in matching structure with strategy, david 2011 state that a change in strategy usually needs a change in the manner an organization is structured. The organizational structure determines how the organization performs or operates. The line, line and staff and functional authority organisational structures facilitate establishment and distribution of authority for vertical coordination and control rather than horizontal relationships. Companies are divided into departments of specialization, and then within those units, they are separated further into projects and products. A manager in a matrix organization has two or more upward reporting lines. Which organizational structure will facilitate the.
The organizations created the structures to coordinate the activities of work factors and control the member performance. Larson and gobeli 3 define a matrix structure as a mixed organizational form in which a. Everything you need to know about the types of organizational structure. This is where the organization is divided into smaller groups based on its special functions such as it, finance or marketing. In matrix structures, there are functional managers and product or project or business group managers. Flat organizational structures define the hierarchy or an organization, and determine the way information flows within it. The functional organizational structure has its own strengths and weaknesses that it provides the organization with. Try and get the awardwinning pm software used by nasa. The matrix structure followed by starbucks coffee is one of the best organizational structure examples. Everything you need to know about the types and classification of organisation structure. We focus on the commonalities of the literatures that deal with matrix organization and project management.
A functional organizational structure is a structure that consists of activities such as coordination, supervision and task allocation. Difference between matrix and functional structure. In matrix structures, subordinates have to follow instruction. Key findings matrix structures combine the benefits of traditional functional and product. Different organizational structures that combine to form starbucks matrix structure are divisional structure, functional structure, and teambased structure. These organisational structures are briefly described in the following paragraphs. Best practices in matrix organizational structures gssa georgia. This paper investigates the characteristics of matrix structures and their relationships with drivers of project success, such as communication, collaboration, and. It is a combination of the functional and divisional structures.
May 03, 2018 matrix structures demand capable tools. Functional vs divisional structure practical management. Pdf characteristics of matrix structures, and their effects on project. Pdf this paper investigates the characteristics of matrix structures and their. Matrixdeveloped to allow a certain degree of flexibility, combining two or more structures departments divided based on their functions, but then subsequently grouped according to product line functional and product managers.
Pdf the development of human society has involved people working together in organised groups to undertake many forms of activity. The purpose of this article is to show an understanding of strategy and the strategic process. In a functional structure, tasks and activities are grouped by business function, for example productionoperations. In a functional organization structure, the project. Apr 07, 2017 an organization can be arranged according to a variety of structures, which enable the organization to operate and perform. Since these authorities flow downward and sideways, this structure is called the matrix organization structure. Alan randolph journal of management, june, 1992 this paper comprises. Implicit in the definition of the matrix organization is the recognition that the project is temporary whereas the functional departments are more permanent.
Defining and solving the organizational structure problems. There are several types of organizational structures, including hierarchy, cross functional, and matrix. The crossfunctional structure is an organizational structure in which we find matrix management and crossfunctional teams composed by. Dec 15, 2019 you may not find an example of a large functional organizational structure. There are three common organizational structures, and project managers work in all of them. When establishing a structure, business leaders should decide how a structure best aligns with the companys principles and goals and how it. An organizational structure is the term used to define how employees of a company work together to support their mission.
Those involved with ongoing operations adopt this model. Structure of an organisation which results from the organising process is the basic framework within which the decisionmaking behaviour of an executive takes place. Now, we will discuss the functional organizational structure. Pdf characteristics of matrix structures, and their. The authority of a functional manager moves vertically downwards, and the authority of the project manager moves sideways. Organizational structure examples, types and advantages. This structure is created with the aim of creating a type of structure composed of functional and multidivisional structures. In addition, the functional structure serves as the focus and gather members or employees to facilitate organisational needed skills and use certain skills where the staff are needed. A matrix organizational structure is one of the most complex reporting structures that a company can utilize. In addition, the functional structure has been set up to facilitate the work and service operation which is designed to run more smoothly. This video explains the different forms of organisation structure in great detail. The matrix structure superimposes the product structure laterally over the functional structure recommended reading.
Though, finding an example of a weak matrix structure is easy. Projects have many activities, from task allocation to budgeting and everything inbetween. Types of organizational structure economics discussion. Basically, its where the reporting structures are set up as a grid instead of in the traditional hierarchy. These departments are most pronounced at the top levels of starbuckss corporate structure, such. This means that a matrix structure combines two organizational structures, most commonly a functional structure and a divisional structure. A project manager is assigned to oversee the project. Organizational structure types bureaucratic structures. I have discussed the matrix and projectized structures in other blog posts. Difference between matrix and functional structure compare. Organization structure is the pattern in which various organizational activities are divided and assigned among positions, groups, departments, and divisions and the coordinating mechanism among these activities to achieve organizational objectives. For example, functional organization and project organization. Section iii profiles two prominent companies that have used matrix structures in different ways.
A matrix organization frequently uses teams of employees to accomplish work, in order to take advantage of. The result is creation of dual line of authority that is balanced by top managers. Its recommended to have an organizational structure in place to accurately define the activities in a project. The functional organizational structure helps organizations run their businesses. The functional hierarchy feature of starbucks coffees organizational structure refers to grouping based on business function. The matrix organization structure crossed these two ways of organizing galbraith, 2009. The matrix structure gives the best of the both worlds of functional and divisional structures. Each employee has dual reporting relationships to both a project manager and a functional manager. Five major types of organizational structures for a business. It is formulated with the desire to maximize the strengths and minimizing the weakness of the both. It is the most widely used structure because it is the simplest and least. Common organizational structures boundless management. Dec 27, 2019 the projectized and functional structures represent the two extreme points of a string, while the matrix organizational structure is a balance.
Strategy is the longterm direction of an organisation johnson, whittington and scholes, 2011, p3. Matrix structures combine the benefits of traditional functional and product. Starbucks coffee company supports its competitive advantages through the characteristics of its corporate structure. Characteristics of matrix structures, and their effects on project success article pdf available in south african journal of industrial engineering 261. In a matrix structure, reporting channels form a grid, and. Pdf characteristics of matrix structures, and their effects. The term organizational structure refers to how the people in an organization are grouped and to whom they report. The primary reason for the firms success is its structure. Organizational structure is a way or method by which organizational activities are divided, organized and coordinated.
Lets take a look at the advantages and disadvantages of each so you know what youre up against when you join a new structure. The employee has to work under two authorities bosses. May 11, 2018 this video explains the different forms of organisation structure in great detail. It is a mix of two or more organizational structures. Strengths and weaknesses of a functional organizational structure. By nature, the matrix structure is inherently complex and costly to implement making them appropriate for large scale organizations that generally undertake various projects. Given the complexity of project management in the actual business world, the matrix structure is often used.