Challenges and strategies of matrix organizations: top-level and mid-level managers' perspectives.

Using surveys, interviews, and workshops with 294 top-level and mid-level managers from seven major multinational corporations in six industries, we identified the top five contemporary challenges of the matrix organizational form: (1) misaligned goals, (2) unclear roles and responsibilities, (3) ambiguous authority, (4)lack of a matrix guardian, and (5) silo-focused employees. We also provide managers with the best practices that will improve their matrix organizations.

Interest in matrix organizational structures peaked during the 1970s and 1980s. Since that time, research and literature on the matrix have dropped noticeably. Simultaneously, organizations continue to adopt the matrix as a viable alternative to deal with their increasingly complex businesses as evidenced by its proliferation in a variety of industries, such as aerospace, automotive, banking, chemical, communications, computer, defense, electronics, financial, energy (Davis & Lawrence, 1977; Galbraith, 2000). The continued proliferation associated with the use of the matrix confirms a need for information on the challenges and best practices. In this article, we report the findings of our research on contemporary issues of the matrix. To date, few studies have examined the human side of the matrix (some exceptions are Bartlett & Ghoshal, 1990; Lawrence, et al., 1977). Most topics on the matrix focus on its structure and its variant forms (e.g., Goold & Campbell, 2002), rather than the human side--issues concerned with managing and operating in the matrix. In this study, we focused on the human side of the matrix as the findings provide actionable steps that managers can implement to improve the functioning of their organizations. We begin with a brief overview of the matrix. We then identify the top five challenges reported by participants (top-level and mid-level managers) and provide best practices to address them.

Overview of the Matrix

By its simplest definition, the matrix is a grid-like organizational structure that allows a company to address multiple business dimensions using multiple command structures. The matrix organizational form emerged in the aerospace industry during the 1960s as government contracts required a project-based system linked directly to top management (Knight, 1977). While the matrix can take many forms, three common variants are the functional matrix, balanced matrix, and project matrix (see Exhibit 1) (Burns, 1989; Galbraith, 1971, 1973; Kolodny, 1979; Larson & Gobeli, 1987). Matrix organizational structures are comprised of multiple business dimensions. Basic matrix structures have two dimensions (e.g., function by product matrix, geography by product matrix). More complex matrix structures could encompass three or more dimensions. For example, a company could be structured not only to focus on product and function, but also to deal with geographic differences. In this study, we focus on organizations that operated in a two-dimensional matrix structure.