I have been working in a matrix organization now for multiple years and for me the following key points were the most invasive struggles I have seen. But let’s start with a brief definition.

Matrix Structure

In a matrix organizational structure, an employee has at least two managers. One manager directs his functional responsibilities. The second manager oversees a different function or division, such as sales, marketing or purchasing. For example, a training instructor might report to human resources. The HR manager oversees staff meetings that include other instructors. The second manager oversees the work of the other departments, such as sales, and manages the training courses that the instructor teaches for that department. The sales manager might direct the instructor to dedicate all her time to sales training. The HR manager might assign her to teach other courses, as well. Complex and conflicting interests must be balanced to avoid confusion.

Companies that successfully implement this organizational design have experienced leaders who manage conflict effectively, build cohesive teams and establish clear roles and responsibilities. As a small business grows, it may require some specialized employees to split their time between two or more departments or divisions. However, without open communication, a matrix organization can suffer from power struggles.


Main Challenges

Some of the main problem areas in a matrix structure are:

  • Priorities — A matrix organization with a number of projects faces real problems with project priorities and resource allocation. Each project manager will obviously consider his project to have the highest priority. Similarly, each functional manager will consider that the allocation of resources and priorities within his department is his own business. As a result, the decisions involving project priorities and often the allocation of resources must be made at a high level. This often puts an undue and unwelcome load on the top executive officer in the matrix.
  • Management Goals — There is a constant struggle in balancing the goals and objectives of project and functional management. A strong project manager may place undue emphasis on time and cost constraints, while a functional manager may concentrate on technical excellence at the expense of schedules. Top management must assure that a careful balance of the goals of both project and functional management is maintained.
  • Potential for Conflict — Whenever there are two project managers competing for resources, there is potential for conflict. This conflict may evidence itself primarily as a struggle for power. However, it also may evidence itself by backbiting, foot-dragging and project sabotage. Conflict and competition may also be constructive as an aid to achieving high performance; In project work conflict is inevitable; keeping it constructive is the problem in matrix management.
  • Effects of Conflict on Management — Since conflict and stress are inherent in the matrix organization, considerable attention must be given to the individuals who will function as both project and functional managers. Individuals vary greatly in their ability to function effectively under stress. Conflict, particularly the role conflict typical of the two-boss situation, can produce stress, anxiety, and reduced job satisfaction. Considerable attention must be directed toward assuring that prospective managers have a high tolerance for conflict situations.

Secrecy and Deception

Under a matrix organization, an employee’s loyalties could be torn between two points of view. For example, a superior might ask a subordinate to keep details about unannounced programs or products a secret. Additionally, he may be advised to hide information about problems to prevent exposure and disgrace. Good communication relies on the accurate sharing of all available collateral. This may not happen due to conflicting interests. Secrecy and intentional deception ultimately undermine productivity.

Time Constraints

Gathering relevant information to defuse a conflict takes time. When an employee reports into two different organizations, he has to consult with twice the number of interested parties. When more people get involved, the decision-making process typically takes longer. Inadequate time may prevent the right people from contributing to the problem’s solution. Additionally, when employees in a matrix organization do not work in the same location, direct access to each other may limit communication. Effective communication requires effort.


In a matrix structure organization, an employee participates in multiple staff meetings. They receive emails and invitations to attend events offered by multiple leaders. Information conveyed by one function may differ from that conveyed by another, typically due to interpretation. This leads to confusion. Delay or procrastination often results when directives are not clear. In a matrix structure, leaders need to coordinate communication activities to prevent distractions. Messages that get cascaded through the hierarchy must present a clear, concise and consistent message. This improves productivity, increases employee satisfaction and typically leads to increased profits, as well.


Inspired by an article from Tara Duggan