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About Us (",)
Learning Objectives
What is Organizational Structure?
Key Elements of Organizational Structure
Work Specialization
Chain Of Command
Span Of Control
Centralization and Decentralization
Forms of Organizational Structure
Matrix Organization
Virtual Organization
Organizing Process



The matrix organization is an attempt to combine the advantages of the pure functional structure and the product organizational structure. This form is identically suited for companies, such as construction, that are “project-driven”. The figure below shows a typical Matrix organization.


Typical Matrix organization

Sample matrix organization

In a matrix organization, each project manager reports directly to the vice president and the general manager. Since each project represents a potential profit center, the power and authority used by the project manager come directly from the general manager.

Information sharing is mandatory in such an organization, and several people may be required for the same piece of work. However, in general, the project manager has the total responsibility and accountability for the success of the project. The functional departments, on the other hand, have functional responsibility to maintain technical excellence on the project. A department manger whose prime responsibility is to ensure that a unified technical base is maintained and that all available information can be exchanged for each project heads each functional unit.

The basis for the matrix organization is an endeavor to create synergism through shared responsibility between project and functional management. Other advantages of a pure matrix organizational form, to project management, include:

     Because key people can be shared, the project cost is minimized

     Conflicts are minimal, and those requiring hierarchical referrals are more easily resolved

     There is a better balance between time, cost and performance

     Authority and responsibility are shared

     Stress is distributed among the team