This reduces the risk of violations and improves audit preparedness across the organization. Success depends less on the structure itself and more on how well people handle its challenges. Real challenges include more meetings to align everyone, slower responses to urgent issues, multiple approval chains for basic decisions, and competing budget priorities. The key isn’t picking the “best” one, but matching your structure to your work. Our original research, trend analyses, and helpful how-tos provide the tools they need to improve workforce wellness in today’s fast-shifting professional landscape. You know how the chain of command at work usually goes something like you, your boss, your boss’s boss, and so on until you reach the CEO?

Role-confusion or slower decision-making might be a downside of matrix systems. To address this, the use of communication methods and channels can bring these efforts into their maximum potential despite the challenges. The matrix organization is characterized by the permanent integration of functions and projects, with established reporting lines. In contrast, project organization is a temporary structure, where teams are assembled for specific projects and dissolved after completion. The matrix organization is a type of organizational structure that combines elements of both functional and divisional models.

Types of Matrix Organizations

• Reporting to a department manager functions similarly to a traditional work structure.
• Matrix structures offer similar tradeoffs – more flexibility, but only if everyone can handle the complexity.
• In an ever-shifting business landscape, a matrix organization’s ability to recalibrate teams and focus quickly is invaluable.
• This management structure can help your company create new products and services without realigning teams.
• Functional managers and project managers work together under a defined matrix hierarchy, ensuring decisions align with both operational and project objectives.

There can be power struggles between managers and even employees because there’s no defined hierarchy, or it’s not effectively mapped out. A matrix structure gives you more flexibility in moving and allocating staff members and resources. You’ll be able to fill positions without being short-staffed due to injury or illness.

Because each specialist works with a variety of other employees, and project managers oversee different kinds of specialists, everyone gets more exposure to each other. Because specialists work with project teams and have a home on their own team of specialists, they can be called to work on new projects as needed. In a matrix organization, project managers are in an ideal position to increase their project management skills. Companies often have  functional managers, who oversee specialists, and project managers, who oversee teams. Employees are still organized within departments, as in the traditional functional structure, but those departments frequently work together. Instead of always working within static departments, project-specific teams are created based on initiative or deliverable goals to ensure optimal performance.

Projects often require work from members of various departments like IT, marketing, and finance, which is why having a separate manager for individual projects makes sense. A matrix organizational structure is defined combining two or more ways of organizing a company, promoting teamwork and communication across departments. Although it is difficult to trace the exact origins of the matrix organization concept, the term first emerged from the aerospace industry in the 1960s. Rather than completely reconfigure their management systems to meet these requirements, companies chose to create horizontal project units to overlie their existing vertical hierarchies.

Advan­tages of the Matrix Orga­ni­za­tion Structure

Because the move to a matrix organization is a significant transformation, it’s important to apply change management best practices. The starting point is recognizing that leaders are experiencing potentially painful losses of control, affiliation, identity and sense of competence and that the transition will take time. (See “The Four Matrix Design Elements.”) To help remember them, think of them as where people report, what roles they should play, how the matrix works, and who gets placed in leadership positions. The arrows linking the quadrants highlight the need for fit or consistency in the four matrix design elements. Different projects in a company often require work from many other members of different departments like marketing, IT, and finance. This is why having a separate manager for each specific project is perfect because it will allow the company to make complex projects.

How can the matrix organizational structure be improved?

Brenda wanted Juan to avoid changes to the workforce or supply commitments until the new network model was approved by senior leadership. Brenda’s goals for Juan included implementing a new supplier network model with ambitious timelines. Meeting her goals would require a substantial time investment for Juan and his small team. Meanwhile, Steve was grappling with critical materials and staffing shortages and had asked Juan to matrix organization optimize workforce and supply costs. Steve expected Juan to meet a tight schedule for opening a new clinical facility to help reach regional volume targets.

• The resulting power differential can easily defeat the purpose of a matrix structure — which is to have Brenda and Steve negotiate the right balance of goals to be pursued by Juan.
• Atrium Health is a nonprofit health care system based in Charlotte, North Carolina, with more than 75,000 employees and over $12 billion in annual revenues.
• A matrixed organizational structure blends project teams with functional departments.

Implementing a RACI matrix when managing projects enhances team clarity by clearly defining who is responsible for each task and who has final accountability. This minimizes overlap, reduces misunderstandings, and streamlines decision-making, especially in complex projects. With defined roles, teams can work more efficiently and avoid delays caused by unclear responsibilities. Organizations that thrive with matrix structures focus on building capabilities, not just changing boxes on charts.

People don’t have to oppose you actively; they’ll just ignore you.” Therefore, it is imperative to select and promote leaders based on their ability to work collaboratively in a matrix organization. Establishing processes and operating principles to support a well-functioning matrix is essential. Without them, the avoidable tensions in the matrix strain relationships and cause additional work for already busy leaders.