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Matrix Structure

Phases of Matrix Structure

For development of matrix structure Davis and Lawrence, have proposed three distinct phases:

1.            Cross-functional task forces: Temporary cross-functional task forces are initially used when a new product line is being introduced.  A project manager is in-charge of the key horizontal link.

2.            Product or brand management: If the cross-functional task forces become more   permanent, the project manager becomes a product or brand manager and a second phase begins. In this arrangement, function is still the primary organizational structure, but product or brand managers act as the integrators of semi-permanent products or brands.

3.            Mature matrix: The third and final phase of matrix development involves a true dual-authority structure. Both the functional and product structures are permanent. All employees are connected to both a vertical functional superior and a horizontal product manager.  Functional and product managers have equal authority and must work well together to resolve disagreements over resources and priorities.

In matrix structure, Employees have two superiors, a product or project manager and a functional manager. The “home” department, that is, manufacturing, sales, finance or personnel are functional departments. The projects are usually temporary and act like divisions.

It is very useful when the external environment (especially its technological and market aspects) is very complex and changeable.

Despite its complexity, the matrix structure is widely used in many industries, including construction, healthcare, research, and defense and information technology.



Matrix Structure -Condition Benefit and Limitation

Matrix structure is often found in an organization when the following three conditions exist:


1.            Abilities to process information to improve decision making process,

2.            Ideas need to be cross- fertilized across projects or products,

3.            Resources are scarce,

Advantages of matrix structure

1.            Project objectives are clear,

2.            Many channels of communication,

3.            Workers can see the visible results of their work,

4.            Shutting down a project is accomplished relatively easily once project is over,

5.            Addition of new products, customer groups, and technology to their range of activities is possible,

6.            Product managers, Functional managers, and geographic managers, all of them involved in strategic responsibilities,

7.            Help in setting priority,

Limitation of matrix structure

1.            Difficulties in implementation and trouble in managing is the reason, matrix structure is not that popular

2.            It is complex because it depends upon both vertical and horizontal flows of authority and communication

3.            Higher overheads because it has more management positions.

4.            Dual lines of authority is a violation of the unity command principle

5.            Dual sources of reward and punishment. Dual reporting channels etc.

How can matrix structure be more effective?

In order to make matrix structure more effective, organizations need to follow following steps-




Clear mutual understanding of roles and responsibilities,

Mutual trust and Confidence.

 Excellent internal communication



Hourglass Structure

Wide at the top


Narrow at the middle




Widest at the bottom

Hourglass Organization Structure


Hourglass organizational structure consists of three layers

Wide at the top

Narrow at the middle

Widest at the bottom

 Middle level is a shrunken layer. The structure has a short and narrow middle-management level. Information technology links the top and bottom levels in the organization. Technology has taken away many tasks that were performed by the middle level managers earlier. The role played by middle management is diminishing as the tasks performed by them are increasingly being replaced by the technological tools.

A shrunken middle layer coordinates diverse lower level activities. Contrary to traditional middle level managers who are often specialist, the middle level managers in the hourglass structure are generalists and perform wide variety of tasks. They would be handling cross-functional issues coming from marketing, finance or production.

Benefit of hourglass structure

  • Reduction in cost
  • Enhancing responsiveness
  • Increasing   decision-making power
  • Decision-making authority is shifted close to the source of information  


  • Promotion opportunities has gone down
  • Monotony and lack of interest as same work again and again.
  • Difficulty in keeping high motivation
  • Yes company try to keep motivation high
  • By assigning challenging jobs or task
  • Transferring laterally
  • And having system of reward and recognition

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