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Management Control Systems

Notes a matrix structure. The distinguishing characteristic of a matrix structure is that it operates under
a dual authority. A person is accountable to two bosses at the same time, one his usual boss and
the other his boss for the duration of the project. Obviously the problems emanating from this
type of structure relate to conflicting roles and authority arising out of an ambiguous demarcation
of authority and responsibility. Matrix structures are increasingly used in organisations as they
become more complex and as the pace of change increases. They are similar to project
management arrangements, although matrix structures may be a permanent feature. Matrix
structures, like project management, involve the creation and management of multi-disciplinary
teams. The team leaders have a dual reporting relationship. For the structures to work effectively
they should only be introduced when appropriate and even then after careful planning. An
important aspect is the training of multi-disciplinary team leaders. However, it can also be
crucial to ensure that those other key members of management who need to monitor and
support matrix structures are properly selected and have received appropriate management
training.
Since each project is a potential profit centre, the power and authority of project managers come
directly from the general manager. He is totally responsible and accountable for the project
success. Functional departments are responsible to maintain technical excellence. A unified
technical information base is maintained and made available and exchanged for each project.
Functional departments are expected to keep track of latest technical advances in the industry.
Thus, while a project management is a "coordinative" function, a matrix management is a
"cooperative" function. In matrix organisation, both vertical as well as horizontal communication
and information channels must exist for decision making. The horizontal line must be permitted
to operate as a separate entity except for administrative purpose. All managers, functional and
project, must have an input in the planning process, And a quick and efficient conflict resolution
mechanics must be constituted.

The basis for matrix concept is an attempt to create synergism through shared responsibility
between project and functional management, there shall be a base of mutual understanding
between the two. Since both maintain some authority, responsibility and accountability on a
project, they must continuously negotiate. The process is more behavioral than quantitative; the
inter-personnel and communicative skills are of paramount importance. Problem solving will
be a fragmented and diffused process. There exists a tendency to seek solutions and to identify
the problems in terms of duties of the particular unit rather than looking beyond it in the context
of entire organisation. Such "tunnel vision" can exist at all levels of management. It is, therefore,
inevitable that conflicts occur between functional and project managers. The individuals placed
at the interface positions, thus become critically important. They have to convince both the
functional and project managers to communicate with each other to resolve the problem.
The advantages of matrix structure are:
1. Allows individual specialists to be assigned where there talent is the most needed.
2. Foster creativity because of pooling of diverse talents.

3. Provides good exposure to specialists in general management.
The disadvantages of matrix structure are:
1. Dual accountability creates confusion and difficulty for individual team members.
2. Requires a high level of vertical and horizontal combination.

3. Shared authority may create communication problems.

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