For instance, Miner et al. Lack of innovation and restricted views of organizational goals, along with too much focus, can affect employees' motivation. Arbitrary and one-sided decisions by either the project or functional manager can only lead to or intensify the potential for conflict. Small businesses can use a divisional structure on a smaller scale, having different offices in different parts of the city, for example, or assigning different sales teams to handle different geographic areas. As pointed out by Lawrence B.
The role of the Project Manager is more that of a Project Coordinator. However, some of those engineers might be assigned different projects, and also report to a project manager. Further, matrix structures can be used to serve global customers by integrating business functions and responding to customer demands fast. Things can get difficult if an organization-defining project is funneling through a functional structure as a specialized unit might not give the project the same attention it needs since it is not a primary priority. Many organizations have thus, for various reasons including the inability to make the two-boss system work, modified the matrix by shifting the balance of power. The functional structure works very well for small businesses in which each department can rely on the talent and knowledge of its workers and support itself. This lesson covered traditional designs, including simple, functional and divisional design structures.
However, the term matrix means quite different things to different people and in different industries 1 5. Some say it started in the 1970s with Philips, as mentioned earlier. Operating core in such organisation is large, middle line insignificant, as the professionals perform complex work and have significant autonomy. In most cases, the matrix structure does not replace a traditional functional structure — it sits alongside it. The overlaps can lead to turf battles and difficulty in determining accountability.
An additional disadvantage of the matrix structure is higher manager to worker ratio that results in conflicting loyalties of employees. It is not ideal in every circumstance, and it can create stress for participants where the demands exceed the time, resources or the ability to juggle priorities. For instance, construction management has found from experience that a strong project office is often necessary to achieve good project performance 3. Although none sell in huge numbers, there are so many niche products that collectively they make a significant profit, and that is what made highly innovative Amazon. While the core company focuses mainly on designing products and tracking finances, this network of partnerships enables it to be much more than just a design operation. In the matrix, power struggles are a logical derivative of the ambiguity and shared power that has been built purposefully into the design.
It is especially useful and efficient for companies that focus on one product type or one line of related products. This type of structure may increase costs by requiring more qualified managers for each division. As your company grow and you create more functional units, the level of autonomy within units might increase, making it difficult for you to coordinate all the units efficiently. A company that operates in various regions with various products may require interaction between product development teams and geographic marketing specialists—suggesting a matrix may be applicable. While this style can work in certain situations, there are significant points to be aware of. Related Articles About Organizational Structure Types These project management principles will help you build a strong foundation from which to manage your projects.
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. Since there are many levels, decision-making authority has to pass through more layers than flatter organizations. If the the project established, a functional area play a dominant role, functional areas on completion of the project, senior managers will be responsible for project coordination. Video — What is a matrix organization? It is a combination of the functional and divisional structures. In this way, each local manager reports to at least two superiors: the geographic head e. The matrix organizational form is only desirable if there is a real need for its added complexity.
The hierarchical structure makes it easy to identify promotional paths for employees, providing an additional motivating factor for the workers. The Benefits and Challenges of Functional Structures Pros: A. When there is a separate project manager position, the role for functional leader is limited to technically leading the subordinates and is disjointed from management functions. Overview of the Network Structure An organization can be structured in various ways that determine how it operates and performs. Some common functions within an organization include production, marketing, human resources, and accounting.
A team is a group of employees—ideally with complementary skills and synergistic efforts—working toward a common goal. If done correctly, flatarchies can increase employee morale. Organizational structure was considered a matter of choice. Matrix structures should generally only be used when the operational complexity of the organization demands it. Reprinted in Cleland and King, Systems, Organizations, Analysis, Management: A Book of Readings, pp. The failure of this structure became the main reason for the company restructuring into a matrix.
To give you a better understanding of the organizational design concept, this lesson will define and discuss the first three designs, also known as traditional organizational designs, which include simple, functional and divisional design structures. However, leaders have to be open to moving to a more suitable arrangement if the business starts to grow or if the overall function of the business changes. College Mirror, 43, 1, 16-18. Statements consisting only of original research should be removed. Companies that use this structure seek to eliminate red tape and spread decision-making across multiple positions. This ultimately can bring down production levels overall, and the company-wide employee commitment toward meeting organizational goals.
This may mean a considerable change in the way they determine their priorities. This sort of horizontal decision-making by model is often used in , other and when running a or. Mintzberg considers two types of such organization: operating adhocracy and administrative adhocracy. However, one of the drawbacks to a functional structure is that the coordination and communication between departments can be restricted by the organizational boundaries of having the various departments working separately. This feature is optional and can be turned off.