In business, matrix management refers to an organizational framework established with both vertical organizational hierarchies and horizontal relationships across departmental lines that pool a group of workers together for specific work assignments or projects. Under a matrix system, an employee reports not only to his departmental superior but also to a project manager, possibly in a separate department, for the duration of a particular assignment. A matrix management plan directs employees to the assignment where the need and the benefit derived are the greatest for the company.
While maximizing the value of employee skills and strengths, the matrix structure adds new pressures on managers to communicate effectively. They must set appropriate boundaries, and establish reporting and accountability ground rules. The goal of matrix management is to provide the creativity, responsiveness and adaptability that are required in a competitive business environment.
Well-established companies have used matrix management successfully for years. A key to success in the matrix structure is a clear understanding of the company goals and the roles of teams, individuals, and managers. It is essential that companies make the best use of each resource but avoid over-utilization of any one resource. Talent audits summarize the strengths of the workforce and pinpoint areas that need development. New channels of communication, feedback, and progress monitoring prevent conflicts of priority and scheduling.
Advocates of matrix management recommend the system for its facilitation of information sharing across task boundaries and specialization that allows professional development. Although conflicting loyalties may confuse employees, a concerted effort to foster a collaborative environment can overcome this problem. A distinct disadvantage of matrix management is that it increases the number of managers needed when compared to basic management. Having more managers may increase decision time and potentially drive up overhead related to management.
Several forms of the matrix management structures have emerged, such as the weak matrix, the strong matrix, and the balanced matrix. In the weak matrix, the project manager supervises staff serving different functions, but he still reports in to his functional manager. Within the strong matrix, the project manager is totally free of functional management, while in the balanced matrix, functional managers and project managers share liability and authority equally.
Other arrangements include an ad hoc project team working together temporarily according to need, the virtual team based around a goal or solution but not interfacing directly, and the cross-functional team comprised of a group of employees with varying practical skills working together towards a common long-term goal. Some teams are self-directed, empowered to take action and make decisions regarding problems without corporate direction. Other teams are multicultural, combining expertise from different countries.