Matrix organizational structure is a method for constructing the reporting chain in a business that deviates from the standard linear model to intermix employees and managers from different departments. The structure can increase communication and productivity due to collaboration, but it may lead to some confusion among employees and may present financial or technical difficulties.
The traditional organizational structure in a business divides employees into groups based on similar functions, with a direct manager for each employee or subgroup. In a matrix organizational structure, employees work with more than one manager, reporting to one manager according to job role and another according to current responsibilities. For example, an marketing associate working on a software release may report to the marketing manager for that location as well as the project lead for that program. This structure creates more communication between groups and thus allows for more transparency in actions and a greater ability to collaborate and create of new ideas.
One of the most significant drawbacks of the matrix organizational structure is that it requires additional work to establish the reporting process among employees, as each employee needs to make sure all the relevant managers obtain information rather than just one. Some companies may also face technical difficulties in sharing information, such as establishing a system for sharing documents and other files electronically or incorporating employees in different locations.