Page 80 - DMGT521_PROJECT_MANAGEMENT

Unit 5: Functions of a Project Manager

5.6 Matrix Organisation Notes

Matrix Organisation was introduced in USA in the early 1960s. It was used to solve management
problems in the Aerospace industry. Matrix Organisation is a combination of two or more
organisation structures. For example, matrix organisation include Functional Organisation and
Project Organisation.
The organisation is divided into different functions, e.g. Purchase, Production, R&D, etc. Each
function has a Functional (Departmental) Manager, e.g. Purchase Manager, Production Manager,
etc.
The organisation is also divided on the basis of projects, e.g. Project A, Project B, etc. Each project
has a Project Manager, e.g. Project A Manager, Project B Manager, etc.

The employee has to work under two authorities (bosses). The authority of the Functional
Manager flows downwards while the authority of the Project Manager flows across (side wards).
So, the authority flows downwards and across. Therefore, it is called “Matrix Organisation”.
An example of matrix organisation is shown in the following table:

Table 5.1: Example of a matrix Organisation

Functions Purchase Production R & D Marketing Finance
Manager Manager Manager Manager Manager
Projects
Project A
Manager
Project B
Manager
Project C
Manager
Project D
Manager
Project E
Manager
MATRIX ORGANISATION

Did u know? Employees in a matrix organisation report on day-to-day performance to the
project managers whose authorities flow in horizontal directions.

5.6.1 Features of Matrix Organisation

The peculiarities or characteristics or features of a matrix organisation are:
1. Hybrid Structure: Matrix organisation is a hybrid structure. This is so, because it is a
combination of two or more organisation structures. It combines functional organisation
with a project organisation. Therefore, it has the merits and demerits of both these
organisation structures.
2. Functional Manager: The Functional Manager has authority over the technical (functional)
aspects of the project.

LOVELY PROFESSIONAL UNIVERSITY 75