Matrix and Functional structure
According to Robert (1997), the matrix structure allows the organisation to have the benefits of: 1) High level Integration due to shared resources and access of skilled people across the organisation, resulting in optimised outcomes and decreased duplication of work and ideas; 2) Due to the high level of integration between each department, communication is far more efficient and effective; 3) Both high level of integration and improved communication permits business operations to be timely and efficient, avoiding expenses are incurred through delays.
However, like any other organisational structure, the matrix structure does have its own disadvantages and possible repercussions to an organisation. According to (PMI Standard Committee, 1996), the following are certain disadvantages of a matrix structure: 1) Confusion brought forth by power and politics. Management may tend to bid for more “superior” authority, and having several bosses at a time may cause undue conflict and confusion as to which superior a subordinate ought to follow.
2) Apart from confusion, the communication between each department would also be marked with increased complexity, which may cause project delays and stalled decision making. On the other hand, both advantages and disadvantages of the functional structure were outline by Castro et al. (1998). The
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(1998) are the following: 1) Having top management handling decisions, coordination for the organisation is both simple and clear; 2) Reduces overhead; 3) Identifying and distinguishing career paths from the others is facilitated through specialized hiring and promotion; 4) Employees are grouped according to skills, education and knowledge, allowing them to work alongside people who share and understand the same functional jargon. On the contrary, the disadvantages according to Zayas-Castro et al. (1998) are quite similar to the matrix structure.
They are the following: 1) Coordination among departments is quite difficult since authority lies in one person alone; 2) If issues ensue and the one in authority over different departments is absent, departments shall be without guidance; 3) Duplication would an issue if each department attempts to achieve results that not within their functional scope. 1B. Examples of Functional and Matrix Organisations According to ATKearney (2002), an established consulting firm, the matrix structured system is best exemplified within the Aerospace Industry.
Within this fast paced environment, information is critical for survival and future organisational vitality. The aerospace industry has been using the matrix structure for more than a half century due to its flexibility, as a vehicle for driving innovation and effectual communication flow. Under the matrix organisational structure, the industry benefits from transparent and quick information flow, including sharing of both resources and manpower.
In servicing their customers, the matrix structure provides flexibility, allowing quicker reaction times and responding with increased agility to the demands of the market (ATKearney 2002). Despite positive implications, there are employees who do not fully comprehend the essence of the matrix structure. Instead adopting the perspective of to think and act as a “one entity”, most employees tend to exhibit loyalty and focus on the subunit of that organisation, creating conflict and misunderstanding among departments (Want 2003). For functional organisational structures, a typical business corporation would be an epitome.
Having the CEO or chief executive handle the decision making, the organisation manifests the traditional functional organisational structure (Youker 1997). In order to respond to the various functional needs of the enterprise, various departments are established and are focused exclusively on a special function or task. Under each department, employees are grouped according to their skill sets and functional expertise. Coordination is simpler and clearer; with ultimate positive benefits on the organisation’s bottomline (Youker 1997).