The Curse of the Matrix Organisation

The “Matrix Organisation” is one of three classic organisational structures that can exist in a business. The three types are;

1.       Top down functional approach

2.       Matrix organisation

3.      Process organisation

The above diagram shows the basic differences between a functional and a process organisation.

The process organisation is rare. It is where the walls of functional thinking are taken away and the process of delivering a product or providing a service is organised in a team based organisation with the minimum of hierarchy and the maximum of team work. It incorporates multi-disciplined and multi-skilled involvement from everyone in the team.

The classic top down siloed organisation always appears to be somewhat old fashioned and has negative connotations, but actually, done well with good management skills and leadership, this can be the most effective method of designing an organisation in most situations for most businesses.

The matrix organisation has originally come from the automotive industry, the “Toyota System”. Although this has worked well within the automotive industry building different models of cars, the activities are similar. A rather simple example: almost all cars have four wheels put on axles in the corners of the car. The matrix type of organisation has worked well in that type of business, where, although there may be many sites across the world the fundamental activities of constructing a car are very similar, on whatever production line, for whatever model that exists within that business.

Below is a drawing of a matrix organisation.

As a concept, the matrix organisation makes very good sense. Operational managers have line responsibility and there are experts who drive improvements through projects and various activities across parts of the organisation. In principle this is fine.

However in organisations that have not fully embraced this and not structured it correctly, there are many conflicts of interest where common objectives aren’t clear and priorities aren’t aligned between the operation and the matrix leaders.

There are too many organisations that switch to a matrix type operation without fully understanding the consequences of the conflicts. It is important to have experts in the business and those experts should drive projects for improvement within the business. However, the improvements need to be driven and led by Operations Managers in a functional position and the Project Leads need to facilitate change in partnership with the Operational Leaders. This rarely happens and the conflicts de-energise the business by confusing people and creating infighting.

In the above scenario it makes absolute sense to have experts, leaders and reporting lines within the business that “go across the manufacturing steps/functions” as the boundaries between one step in the process to another are very clearly defined. Wheels, doors, engines, windows etc, etc

In the FMCG manufacturing industries, matrix can work well where there are similar activities with similar machinery and processes

This matrix thinking has transferred to other organisations such as Finance/Banking and other service based industries with very minimal success. One of the key reasons for this is the project management style driven by the matrix leaders doesn’t embrace the nuances and variations in the different functional areas, unlike that of manufacturing cars or similar type projects with repeatable processes. For example, within the banking industry the same matrix driven concepts won’t necessarily work in Corporate Banking as they would in a call centre managing insurance policies.

There are many examples where the matrix idea just creates confusion with dysfunctional reporting lines and opposing objectives.  There are classic examples of power struggles between Positional Power v Expert Power v Personal Power.

So, think twice before you consider a matrix type organisation. Is it the right organisation for your type of business?

Although top down siloed types of organisation seem to be inefficient, done well with good management they are still the ‘go to’ structure for most organisations.

Contact to discuss the types of work we conduct with our clients, including organisational health checks.

T: 019054 425209


Martin Gummery, Managing Director NewLeaf International Ltd