From a Functional Organization to a Matrix Organization

Subject: Organizational Management
Pages: 10
Words: 2763
Reading time:
10 min
Study level: PhD


Organizations have the challenge of keeping up with the changes that happen around the globe. These changes have brought about the introduction of technology and new ways of management in business organizations. Organizations also face the challenge of maintaining their reputation, revenues, and gradual growth in a constantly competitive and changing environment. The changes have brought obstacles as well as opportunities in the business environment. Challenges have emerged as the organizations attempt to make changes to accommodate the changes. The transition from an existing functional organization to a matrix organization must be carefully undertaken so as to maintain the existing established name of the organization. The objectives of this term paper include a definition of functional department and matrix organization, explanations of the reasons why the transition must occur, and an explanation of how the transition occurs.


What is a functional department?

A functional department is characterized by hierarchy. There is a chain of command where employees report to one ultimate person. The human resources are therefore grouped into levels where the people in a lower level report to those in a higher level. A functional department is therefore a well-defined unit within an organization that is mandated to perform a specialized task. For instance, the sales department and human resource department can be examples of functional departments. The term functional organization depicts the entire company hierarchy. It depicts the totality of the entire human resource body and the ability of the employees to perform tasks ( 2007, p. 1).

What is a matrix organization?

Scholars have given many definitions of the Matrix. All the definitions imply that a matrix organization is an organization that merges functions or structures to perform specific tasks either permanently or within a given period of time. If the tasks are done within a shorter period of time it is referred to as a project, but when the task is permanent, the situation is called a matrix. Some organizations adopt a project before finally settling on a matrix (Ford and Randolph 1992, p. 1).

Reasons for making the transition

Kramer (1994, p. 34) argues that new technologies have emerged and organizations must embrace the changes that come out. Due to sunk costs in business, organizations must incorporate the use of technology so as to remain afloat. What is more is that the process of change is equally challenging as hardships over and above opportunities come up. Existing structures become insufficient during the change process if the change is abrupt. Moreover, a gradual process of change may be accurate in some situations. Ford and Randolph (1992, p. 1) add that, the transition is largely dependent on the cost involved in the transition process. The cost determines the period of transition and at times, the organization may choose to remain the same if the cost is high.

Incorporating the emerging technologies in the organizations enables the organization to participate in global competition as Robbins (1983, p. 7) stipulates. This is because; some services and goods have been replaced by other superior ones hence the companies must adjust. Moreover, an organization must stay informed of what is happening around the globe so as to provide the best. An organization that is keen to make a transition will remain at the forefront of every new development and maintain gradual growth.

The transition is inevitable if the organization plans to continue performing. Change may involve increased interactions between departments to improve services. Interactions make the change process simpler, especially in the case where an organization introduces new policies or products.

Transition is necessary because the introduction of technology has created competition. Technology saves time and can enable the organization to realize greater revenues. The structures that have existed become outdated because new demands emerge and problems cannot be handled adequately.

Companies have different challenges, which emerge from a lack of coordination during a transition. The introduction of new technology requires an organization to have employees who can operate and use new technology. Organizations have to catch up with technology and give the required services as dictated by the demand (Harrison and Christopher 1995, p. 6).

The process of transition

Changes in the organization structure begin from dissatisfaction with the functional organization. Functional organization hierarchical structure is characterized by inadequacies that trigger the overlay. This is because; the business environment keeps changing and continually becomes complicated. The hierarchy which becomes dominant during the overlay makes the situation more complicated. An organization becomes a matrix when a functional organization is transformed to have a new structure. The organization, therefore, acquires a new structure (Sharma 1999, p. 396).

Before a transition, Brynjolfsson et al (1997, p. 1) suggest that a thorough analysis of the organization must be done. This involves identifying areas that need change and relating them with the organizational objectives to identify the areas that need change. The analysis will also make it possible for the organization to outline the objectives of change. Accordingly, the analysis will help in determining the appropriate inputs and outputs in the transition.

Sharma (1999, p. 403) emphasizes that the organization must appoint project managers for the transition. The project managers must be capable of undertaking the tasks outlined and recommendations of the analysis of the organization. Robbins (1983, p. 7) says that the organization can first review its employees to choose a possible candidate before getting a new employee. A clear plan must be put into place and be implemented depending on the needs of the organization.

A team, that includes the project managers, can be formed to check on the process. They can give support to the transition by encouraging the executive to give support. The team should consist of professionals, who are experts in change management (Brynjolfsson et al, 1997, p. 1).

Chi and Nystrom (1999, p. 42) point out that the newly appointed manager should not be the reason for conflict. Instead, the responsibilities can be shared while paying attention to the plan and the need of the organization. The responsibilities of the functional manager and the project manager must be reviewed from time to time to avoid conflicts. Appropriate changes such as sitting arrangement, giving job titles and documenting responsibilities should be made.

The human resources process must be reviewed. Functional managers who are actively involved in the administration can be of help to assist in the management of human resources. They can assist in selecting qualified candidates within the organization and assist in recruiting new employees (Milgrom and Roberts, 1999, p. 512).

The methods and processes of reviewing the performance of the employee must be revised. The progress and the outcomes of a matrix organization will be different from those of a functional organization. The method of measuring performance must be in line with the changes that have occurred. They can also give room for an additional appraisal from the new managers. The performance review may require the organization to train the human resources.

There are different forms of the matrix that an organization can choose to adopt. According to Sharma (1999, p. 397), a matrix can be weak, strong or balanced, depending on the structure. In a weak matrix, functional managers make the most significant decisions. Project managers have limited power and in most cases, they enact the decisions made by functional managers. They depend on functional managers for the provision of resources and cannot make changes concerning human resources. Consequently, human resources see the functional manager as their superior since they have power over them. Efforts of the human resources can only be effectively rewarded by the functional manager after they perform work for them. Human resources lack motivation because projects hardly bring rewards. They prefer to work under the functional manager.

A strong matrix is characterized by a powerful project manager. Functional managers have no authority over human resources in an organization. A project becomes efficient when the project manager is able to control the human resources to perform tasks adequately. The functional managers are in charge of the administration of the human resources. At the onset of a project, the functional and the project manager discuss the accessibility of human resources. The functional managers are allowed access so that they perform functions like training. During the project, the functional managers organize the availability of the staff in the project.

A balanced matrix puts into consideration both the functional and the project manager’s needs. It is possible for one manager to be in control of the best human resources at a given time. A balanced matrix brings stability to the organization. The equilibrium is achieved after policies concerning the distribution of human resources are formulated and enacted. The policies should state when the functional or the project manager can use specific human resources in clearly outlined circumstances. The policies must also ensure that authority and power is equally shared between the functional and the project manager. An organization will therefore have a balanced matrix, if power is fairly distributed amongst the functional and the project managers.

Before implementing a transition, it may be necessary to evaluate a plan to identify conflicting interactions. The design must encourage complementing interaction so that the transition becomes a success. Some practices may be complemented in the functional structure while they may be not applicable in the matrix structure. Therefore, practices that are applicable in the transition must be the ones considered. Conflicting interactions slow down the process of transition (Milgrom and Roberts 1999, p. 512).

Human resources must also be informed about the transition. This will help them be able to bring in innovativeness when they are required to. Involvement of the employees means that they are grouped and given information on the existing objectives and which are target goals.

Communication is vital hence, it may be necessary to formulate appropriate policies to enable communication. The policies must also ensure that authority and power are equally shared between the functional and the project manager. An organization will therefore have a balanced matrix if power is fairly distributed amongst the functional and the project managers.

The executive team of the organization must support the transition. They can make decisions that enable the transition to become successful. They can support the transition by allocating resources to the process of transition. They should be involved in reviewing the powers to which the functional and the project managers are allocated and make necessary changes.

Benefits of a matrix organization

One of the gains that a matrix organization enjoys is enhanced information processing. Non-existing communication channels are formed to contribute to the success of the organizational goals. Moreover, the tasks are project-oriented and, in most cases, the human resources are assigned specific tasks under a project. This avoids overlapping duties. Generally, communication among different departments improves with enhanced interaction among the managers. The managers and the human resources coordinate their activities for the success of the projects.

Galpin et al (2007, p. 39) argue that the matrix structure performs better than the functional structure if the transition is successful. For this reason, the transition must be well planned and implemented. The major challenge is that the functional managers continue to dominate in the organization and at times make the transition extremely challenging.

Matrix has an impact on information processing. Communication amongst workers becomes formal as what is discussed informally is also accepted as legal. Thus, formal communication increases hence the organization is able to achieve its mandate.

Matrix organization is capable of handling large amounts of information. This is a result of interactions among the organizational department. Consequently, the managers, as well as the human resources, have information to make an informed decision and take the least time to access the required information. Whenever there are challenges different departments are able to make adjustments to overcome barriers. Problem-solving takes the shortest time when information is shared. The human resources together with the managers increase their knowledge after sharing information. As a result, the human resources become informed and knowledgeable as individuals. The individual becomes experienced and can demonstrate their capabilities.

The motivation of the employees is another benefit according to Michael et al (1994, p. 325). Employees get the opportunity to develop in their careers when they engage in different projects. Human resources tend to work well in different projects of the organization. They become responsible and capable of making their own decisions.

Matrix organizations have the advantage of providing adequate solutions for complex problems in the organization. Performance is high with quality outcomes. The approach leads to excellent outcomes as human resources use available knowledge and resources to attain the organizational goal.

Challenges of a matrix

Organizations have a great challenge of how power is shared as the project manager and the functional managers struggle to remain powerful. Sharing power complicates the human resources administration. Human resources dislike reporting to two bosses. Other resources in the organization may end up in disputes if the managers have strong differences in defining their responsibilities. Some decisions concerning promotion and human resources assignments may be difficult to make.

Another challenge emerges in the management concerning the prioritization of tasks. There may be differences in the procedures in the administration. What is more challenging is that there can be diverse ideas concerning the funds required for a specific project and the number of personnel required.

Moreover, the managers may differ in their orientation which may lead to disagreements. The human resources may end up confused and find hardship if they report to conflicting bosses. This may be due to different values and professional associations. Sharma (1999, p. 400) argues that Functional managers are resistant to matrix structure and view it as a threat to the existing structure. Functional managers believe that they lose status and that the autonomy of the existing structure is eroded. As a result, functional managers may be hostile and frustrate the efforts of the project managers.

In accordance with Burton and Borge (1998, p. 13), matrix structure requires additional funding to support the additional administration. The management must plan to accommodate the views of different managers and the cost of additional human resources that are employed to assist in the administration. Functional managers together with project managers may take long to arrive at a uniform decision. The organization will have to pay for extra meetings that may come due to differences that emerge from the managers’ diverse decisions. There are also additional costs that are incurred due to the training of the additional project managers. There is also a need for controlling and monitoring the activities in the organization which also require funding.

According to Sharma (1999, p. 401), matrix organizations have a slow response to changes that occur in the external environment. For instance, the matrix organization may be disadvantaged to make adjustments to the requirements of multinational standards due to the complexity of the management structure.


The functional organization is mainly hierarchical, with a clearly defined chain of command. The matrix organization on the other hand is characterized by a structure that incorporates two functions to perform specific tasks either permanently or within a given period of time. The transition occurs so as to incorporate new technologies in the departments and to be at the international standards. It also occurs so as to meet the demand of the market. Companies must strive to maintain the achievements they have accumulated over the years by making necessary changes.

The transition begins with an analysis of the existing structures and objectives. Then, the target objectives are obtained and plans are made considering the available resources and other significant factors. The team and managers in charge of the matrix are selected and mandated. Clear policies are formulated and enacted to avoid conflict. During the implementation of the plan, high standards of interaction and communication are upheld. Assessment is done to evaluate the success of the transition. The transition requires the full support of the executive in decision-making and allocation of resources. The transition results in a weak, strong or balanced matrix. A balanced matrix ensures that the authority is equally distributed between the functional and project managers. The organization benefits from communication and information processing. Better decisions are made within a short time. Interactions within the organization are increased as the human resources gain from the exchange of knowledge, increased experience, and become motivated. Complex problems can be adequately solved in a matrix. The challenge with a matrix organization is that the cost of providing both material and human resources as well as facilitating coordination is costly. Different managers may differ and cause barriers to the transition.

Reference List

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