Why matrix organizations dont work

At best, the organization will go back to its pendulum days, alternating between the centralized management of the crunch period and the decentralized freedoms of more prosperous times. Even if top management should try again, it is likely to get a negative response from lower level managers.

Diagnosis —On the face of it, a matrix organization would seem to double management costs because of its dual chain of command. This issue deserves thoughtful consideration. The limited amount of research on matrix overhead costs indicates that in the initial phases overhead costs do in fact rise, but that, as a matrix matures, these extra costs disappear and are offset by productivity gains. In a large electronics company we observed in some detail how initial overhead increases not only necessarily occur in a matrix but also how they can inflate unnecessarily.

In this case, the company decided to employ the matrix design from the outset in setting up its new operating division at a new plant site. This unique organizational experiment had a number of positive attributes, but one of its problems was with overhead costs. This resulted in a relatively small division having top level managers as well as full-time functional group and full-time product managers.

Within months, however, this top heavy division was pared down to more reasonable staffing levels; by assigning individuals to two or more slots, management got costs under control.

Overstaffing is much less liable to occur when an organization evolves gradually from a conventional design into a matrix, and managers perform as both functional and product managers. While this technique can be justified as a transition strategy, it also has its hazards. A safer route is to assign managers roles on the same side of the matrix i. As a final argument against the fear of overhead costs, consider that no well-run organization would adopt a matrix structure without the longer run expectation that, at a given level of output, the costs of operations would be lower than with other organizational forms.

In what way can such economies be achieved? The potential economies come from two general sources: fewer bad decisions and less featherbedding. First and most important, the matrix can improve quality of business decisions because it helps bring the needed information and emphasis to bear on critical decisions in a timely fashion.

The second source, less featherbedding, is not so obvious, but potentially of greater significance. How can it work? These firms usually set up a matrix of functional specialists against client or account managers. The body of other consultants are grouped with their fellow specialists but are available for assignment to projects under the leadership of account or client managers. Otherwise, their time is charged against the budget of their function manager.

Of course, some time charged to functional departments, such as background study, research work, and time between assignments should by no means be thought of as wasted. But management can budget such time in advance so that it can scrutinize the variances from the budget. For the long-term good of both the people involved and the organization, top managers need to keep such pressures from becoming too strong. Because it is perfectly possible to get too much as well as too little pressure, a creative tension is sought.

The matrix has some difficulty in staying alive at high levels of a corporation, and a corresponding tendency to sink to group and division levels where it thrives. Diagnosis —Sinking may occur for two reasons. Either senior management has not understood or been able to implement the matrix concept as well as lower level managers, or the matrix has found its appropriate place.

For example, if a company sets up a matrix between its basic functional and product groups, the product managers never truly relinquish their complete control, and the matrix fails to take hold at the corporate level. But, say, one or two of the managers find the idea to be useful within their divisions. Their own functional specialists and project leaders can share the power they delegate and the design can survive within subunits of the corporation.

When sinking occurs because of top management misunderstanding, it is likely to occur in conjunction with other pathologies, particularly power struggles. For instance, if many senior executives consider adopting the matrix idea, but only one or a few really become convinced of its worth, there is a danger: those at the top who espouse a philosophy and method they did not employ themselves will be pitted against those who are able to show that it does work.

Prevention —If the corporate top management thinks through which dimensions of the company it must balance, and at what level of aggregation, it can keep the matrix from sinking. For example, top managers should ask themselves if all the business units need to be balanced by central functional departments. If the answer is no, then some business units should operate as product divisions with the traditional pyramid of command, while others share functional services in a partial matrix.

However, sinking is not always bad and should be prevented only when it indicates that an appropriate design is disintegrating. Treatment —Before matrix management can run smoothly, it must be in the proper location. As often as not, when a matrix sinks, it may simply be experiencing a healthy adjustment, and ought to be thought of as settling rather than as sinking.

Its entire company is the size of one of our divisions. In a company of 5, only about 50 managers are likely to be in the matrix; so in a company with 50, employees only about may need to be involved in dual reporting lines. With that number, the people who need to coordinate regularly are able to do so through communication networks that are based on personal relations.

Whatever the size unit in which the matrix operates, the important thing is for management to have reasoned carefully from an analysis of the task to the design of the organization. Matrices which lie within matrices which lie within matrices result frequently from the dynamics of power rather than from the logic of design.

Diagnosis —Sometimes matrices not only sink but also cascade down the organization and filter through several levels and across several divisions. This layering process may or may not be pathological. In fact, it may be a rational and logical development of the matrix, but we include it briefly here because it sometimes creates more problems than it solves. In terms of the metaphor we have used in this article, layering is a pathology only if the matrix begins to metastasize.

When this occurs, organization charts begin to resemble blueprints for a complex electronic machine, relationships become unnecessarily complex, and the matrix form may become more of a burden than it is worth.

Prevention and treatment —The best remedies for uncontrolled layering are careful task analysis and reduced power struggles. A product unit, for example, developed its own functional expertise distinct from the functional units at the next level up.

The best defense was a good offense, or so it seemed. In each case, adequate conceptualization by top managers would probably have simplified the organization design and forestalled the layering, which occurred because of power maneuvers.

Management can treat this unhealthy state best by rebalancing the matrix so that no manager of one dimension is either too threatened or pushed too hard toward a power goal. Matrix design is complex enough without the addition of power struggles. A well-conceptualized matrix is bound to be less complex and easier to manage than one that is illogically organized.

Managers in a matrix can succumb to excessive internal preoccupation and lose touch with the marketplace.

Diagnosis —Because a matrix fosters considerable interdependence of people and tasks and demands negotiating skills on the part of its members, matrix managers sometimes tend to get absorbed in internal relations at the expense of paying attention to the world outside the organization, particularly to clients. When this happens, an organization spends more energy ironing out its own disputes than in serving its customers.

The outward focus disappears because the short-term demands of daily working life have yet to be worked through. This inward preoccupation is more common in the early phases of a matrix, when the new behaviors are being learned, than in matrices that have been operating for a few years. Prevention —Whatever other pathologies develop in a matrix, attention to their cure is bound to increase the internal focus of the members; so prevention of other pathologies will certainly reduce the likelihood of this one occurring.

Awareness of the tendency will also help. Since the product dimension of the organization generally has a more external focus than the resource dimension, the responsibility for preventing an excessive introspection is not equally distributed. The product dimension people can help the others keep perspective, but a strong marketing orientation is the best preventative of all. Treatment —If the managers in the matrix are navel gazing, the first step in the treatment is to make these managers aware of the effects.

Are customers complaining a lot, or at least more than usual? Managers need to confront internal conflict, but also to recognize that confrontation is secondary to maintaining effective external relationships. Navel gazing generally occurs when the matrix has been fully initiated but not yet debugged.

People accept it, but they are engrossed in figuring out how to make it work. The second step is to treat the inward focus as a symptom of the underlying issue: how to institutionalize matrix relationships so that they become familiar and comfortable routines, and so that people can work through them without becoming obsessed by them.

Finally, it must always be remembered that any form of organization is only a means and should never become an end in itself. Can moving into a matrix lead to the strangulation of the decision process, into endless delays for debate, for clearing with everybody in sight? Will decisions, no matter how well thought through, be made too late to be of use? Will too many people have power to water down all bold initiatives or veto them outright?

Such conditions can arise in a matrix. We have in mind three situations—constant clearing, escalation of conflict, and unilateral style—each calling for slightly different preventive action and treatment. Constant clearing —In one company we know of, various functional specialists who reported to a second boss, a product manager, picked up the idea that they had to clear all issues with their own functional bosses before agreeing to product decisions.

This meant that every issue had to be discussed in at least two meetings, if not more. During the first meeting, the specialists and the product manager could only review the facts of the issue, which was then tabled until, at the second meeting, the specialists cleared the matter with their functional bosses—who by this process were each given a de facto veto over product decisions.

This impossible clearing procedure represented, in our view, a failure of delegation, not of the matrix. One needs to ask why the functional specialists could not be trusted to act on the spot in regard to most product decisions in ways that would be consistent with the general guidelines of their functional departments? Either the specialists were poorly selected, too inexperienced and badly informed, or their superiors were lacking in a workable degree of trust of one another.

Regardless, this problem, and its prevention and treatment, needs to be addressed directly without making a scapegoat of the matrix. Escalation of conflict —Another possible source of decision strangulation in matrix organizations occurs when managers frequently or constantly refer decisions up the dual chain of command.

Seeing that one advantage of the conventional single chain of command is that two disagreeing peers can go to their shared boss for a resolution, managers unfamiliar with the matrix worry about this problem almost more than any other. They look at a matrix and realize that the nearest shared boss might be the CEO, who could be five or six echelons up.

Thank you Jesse for this fantastic blog post! I find this particular topic very intriguing in terms of my research and it is going to be one of the focuses of my doctoral dissertation, except that I am concentrating on collaboration in virtual teams, dispersed over several locations. Thank you for bringing all these challenges up, I have seen them as well in a case study with a global company, and I hope to start to dig into these challenges deeper soon.

Thanks for your kind words, Emma. Glad you found it helpful. Good choice for your doctoral research — collaboration in virtual teams is a very relevant and important topic now. I hope that as you dig in, you will share some of what you are learning. Your article is the best out there on matrixed organizations. I am a supervisor of 20 matrixed engineers. How can I do a group appreciation event? Please tell me more about what you are hoping to accomplish by an appreciation event.

Thank you for sharing this vital information, which help me to understand the challenges that I face in the modern world. Data has change the technologies and the tech organisations. Matrix organisation is a vital for innovation and Agile driven business decision. However, legacy people, cultural and complex environment are part of the challenges for the Matrix and innovation.

My question are: I work with many data-driven technologies stakeholders. How do you build a matrix organisation in the start up company or introduce matrix organisation for existing legacy organisation? How do I apply Matrix driven organisation into the data-driven technology stakeholders? Hi Mussie, My sense is that in early stages, new organizations are basically unstructured by their very nature. Later, as they grow, they implement policies and procedures that create boundaries and structures.

This is the point to think about how to best navigate. Your email address will not be published. Notify me of replies and additional comments on this post. Sign up for our newsletter and receive this free gift. We do not share our list, and you can unsubscribe anytime. Your Name. Email Address. Facebook Twitter. I agree to have my personal information transfered to MailChimp more information. Karin Hurt on August 20, at am. All very good concerns.

Who holds the purse-strings to the project can also be a challenge. Jesse Lyn Stoner on August 20, at am. Wendy Mason on August 20, at am. Art Petty on August 20, at pm. Cheers, -Art Reply. Jesse Lyn Stoner on August 21, at am. Great advice for a common challenge today.

Thank you, Ora. Beth on August 21, at am. Beth Reply. But trouble arises when multiple functions are unable to balance competing objectives and synthesize conflicting points of view to advance the goals and success of the enterprise as a whole. Instead, differences—specifically, the inability to embrace and reconcile them—represent an enormous challenge for most companies, their leaders, and employees at all levels.

The solution is a fundamental reconception of influence as a two-way street. When differences arise and disagreement occurs, we need to think of influence not as a matter of seeking agreement from others, but rather seeking it with them.

We need to focus not only on being persuasive, but also on being open to persuasion. Put another way, we need to reconceive influence as a way of working together, without reliance on or recourse to hierarchy, where we seek a better solution than either of us could create alone. Being open rather than defensive when others disagree—embracing and leveraging differences—unlocks learning and innovation.

According to our research, organizations where people report that differences are a significant source of learning and innovation are:. Far from lost in the matrix, people at these organizations have the skills to collaborate amidst differences, and to transform those differences from a liability to an asset. They possess the ability to make decisions quickly and execute with alacrity, and to engage in continuous learning and innovation. All rights reserved. Events Contact Careers.

Authors Jonathan Hughes. Ashley Hetrick. Share Article facebook linkedin twitter email print. You May Also Like. Maximizing Execution and Innovation in a Matrixed Organization. Get the Latest Insights from Vantage.