Companies work on building different pods of an organization that meet the demands of specific work needs. Rather there are many alternatives from which to select a specific project. If he is to be effective, the project manager must be on at least an equal level with the highest level of functional management that he must deal with. However, with increase in exports turnover, an independent exports department is often setup and separated from domestic marketing, as shown in Fig. Video — What is a matrix organization? This effort can be extremely valuable in reducing conflict and anxiety within the matrix.
Among these alternatives are various forms of the matrix. First, when there is a major need for middle managers of different units or teams to coordinate on important business matters on a daily basis. The Two-Boss Matrix In a balanced matrix organization various people in the organization have two bosses figure 1. Moreover, they often respond faster to market or customer demand while decreasing the lead time to produce a new product. This causes an emphasis on developing communication skills as a politically intelligent response for keeping the support of resource providers to ensure resource availability to the cross-functional group. Transnational network structure : Such a globally integrated structure represents the ultimate form of an earth-spanning organization, which eliminates the meaning of two or three matrix dimensions. These are very important relationships, keys to the success of any matrix organization, and must be carefully nurtured and actively promoted by top management and by both project and functional management.
Position the two reporting lines of a matrixed manager as fully balanced — that is, 50-50, not 70-30 or some other unequal ratio. Nothing in business is perfect, and all organizational structures involve trade-offs. In some cases, highly specialized staff may divide their time among more than one project. It is suggested that moving into a matrix can lead to the strangulation of the decision process. It was very rapidly realized that this alternative was not only very unwieldly but had many disadvantages with respect to efficient functional operations.
A domineering personality or power play is not the answer. Overall, these cross-functional organization forms have a great deal in common--an overlay on the traditional hierarchy, multiple lines of authority, and teams working on tasks for finite time periods. As a result, they find it difficult to build the type of advantage or differentiation that is required for long-term success. However, the disadvantages will quickly outweigh the advantages if leaders think this is simply a matter of restructuring or drawing dotted lines on an organizational chart. Workers in the three matrixed groups were more likely than nonmatrixed ones to say that they need clear direction from project leaders and communication between their managers and project leaders to prioritize their work most effectively.
Here, the functional manager controls the project budget. The historical evolution of organizational patterns indicates that in the early phase of internationalization, most firms separate their exports departments from domestic marketing or have separate international divisions. Philips which operates in more than 50 countries with diverse range of product lines provides a good illustration of a trans-national network structure. This usually happens in a balanced matrix organization where both bosses have equal authority and power. The project manager in the matrix organization is not a staff man nor does he normally have less authority than the functional managers reporting on the same level.
Managers have differing personalities and differing management styles. This approach killed two birds with one stone: 1. Wearing multiple hats is common in small companies, but it can affect day-to-day operations and overall performance in larger organizations. In addition it should indicate to the fullest extent possible his relationships with the functional managers involved in the project. Among the groups more interdependence leading to exchange of information and exchange of resources with each other takes place. Dotted lines are usually used to indicate staff relationships or reporting relationships of lesser importance. Lack of cooperation among various product lines may also result into sales loss.
Indeed, faith in one-dimensional solutions—redrawing organizational boundaries, constructing matrices, winning the war for local talent, reengineering business processes, moving the global headquarters—is arguably dangerous. When a decision is to be made about some minor regional product adaptation, the regional product manager should be able to make that judgment without escalating the issue to a global product manager and the regional business unit head, let alone to even more senior executives. The matrix is thus a multi-dimensional structure that tries to maximize the strengths and minimize the weaknesses of both the project and the functional structures 25. The latter retort that a matrix structure is an inescapable prerequisite for lateral coordination in large complex businesses. There is usually a manager or a top-level executive managing a particular department, handling all decisions related to budget, resources, decision-making and staffing. We assessed the independent effect of role clarity after statistically controlling for shared or overlapping effects among the 37 practices.
Therefore, in terms of the balance of power, it would seem that the project manager would always have the scale of power tipped in his direction, particularly with the firm support of top management. The goals of the leadership team will need to be an integrated whole, with all members aligned with each goal. We would be delighted to talk to you and discuss your particular business issues and how we can help. In addition, the project personnel must be able to adapt to the two-boss situation which can be a traumatic experience when first encountered. Initiate action by installing management processes and reporting systems to support the matrix. It could also be driven by the external demands of an important customer. A matrix structure is suited to big organizations which operate in a dynamic environment and need a quick response to market demand.