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Perils of Matrix Organization Structure
By Atul Gaur

Given the complex nature of engineering projects, it is pertinent to mention that there should be a well defined project organization structure at all times. Project teams should know exactly who to report for all matters of the project, diluting this structure affects the overall team dynamics and greatly impairs project progress. An engineering project requires a well defined organization structure and an established chain of command, with project manager at helm of affairs. However, with a matrix organization structure the authority, role, and responsibility of a project manager gets diluted to a great extent.

Theoretically, we have three main types of project organizations viz; functional, projectized, and matrix. Matrix organization has been further sub divided into weak and strong matrix. Irrespective of the nomenclature, the problems faced while working in matrix organization remains the same. The most serious problems faced are lack of centralized leadership, absence of a cohesive team, and improper implementation of project plan. It is essential that a project is executed in the absence of above factors; presence of all or any of these will definitely harm project success and will leave the client highly dissatisfied.

  1. Lack of Centralized Leadership: Very nature of matrix organization promotes dual reporting as project team members tend to remain in good books of their functional bosses. This in turn leads to lack of leadership as functional manager also tries to ascertain his existence in the organization and his influence over the important aspects of the project. Project Manager has to constantly manage the aspirations and personal ego of such functional managers and ensure that the ego of such manager does not affect the project in anyway. Project Management to a great extent is reduced to an ego management exercise. Under such circumstances the credibility of the project manager lies in his ability to satisfy professional ego of his functional counterparts. As the project organization structure gets diluted project team members thus take undue advantage of this situation and indulge in various tactics to shun their responsibilities. The unhealthiest situation is when a project manager has to approach a functional manager to get day-to-day tasks done from his project team members.

    In a projectized organization structure, project manager is the de facto leader of the project and has to drive his team as well as his counterparts to achieve the project deliverable. Friction due to ego clashes is negligible as the onus of completing the project lies with one leader only. Unified command and control of projectized organization yields better and faster decision making for the project.

  2. Absence of Cohesive Team: Important feature of project management is to have a dedicated team, which can rise to a demanding situation, a team that any project manager can rely on. However, under matrix organization structure project team fails to stand up to such occasions since all team members are borrowed resources from their functional units, they try to find an escape route and minimize their exposure to difficult situations. These situations could be anything like meeting fresh project completion deadlines imposed by the customer, or ensuring the performance of a newly designed plant. Once again, these resources make use of dual reporting structure, to escape from these demanding situations and their functional bosses try to justify how extended involvement of one resource on one project will hamper progress of other projects. In such a condition, project manager has to approach top management and convince them of the requirement and ensure that the functional managers respond to the requirements of the project. Project team also lacks focus, as a result of that, various important contractual obligations are missed due to negligence of the team members. This mainly happens when close level of coordination is required between various functional departments. Project Manager then has to review each and every action of his team members and compare those actions with respect to contractual obligations.

    A similar situation can never arise in a projectized organization, as the project team is a set of dedicated resources with a clear mandate from the management, to work only on the assigned project and not any other ongoing projects within the organization. The project team is dismantled only on completion of the project.

  3. Improper Implementation of Project Plan: The above two serious drawback of matrix organization structure conclusively prove that, in a matrix environment it is not an easy task to develop and implement a project plan. In fact developing a plan in itself is a challenging task as each department tries to buy extra time to complete its tasks irrespective of the project requirements. Project Manager gets little or no cooperation while preparing a project schedule as participation in basic inputs like developing activity schedule, assigning duration estimates are neglected by team members as well as the functional heads. Since other than the project manager, no team member takes ownership of the project schedule, implementing a project schedule becomes a daunting task for a project manager. The problem magnifies when the activities needs to be crashed or resources needs to be augmented in order to meet the deadlines. Since the functional managers responsible for resource mobilization keep themselves aloof from ground realities, important milestones are missed due to undesired redtapism within the organization. This not only impacts the project schedule but also reduces project profitability.

    In a projectized organization structure decision making process is highly simplified, project organization can swiftly respond to the needs of the project, thereby ensuring adherence to project schedule.

However, it would be rather inappropriate to state that there are only drawbacks with this system. A matrix system does have a few advantages as well, the major advantages of having a matrix organization is that it helps the management to achieve profitability by optimizing resource utilization, organization can work on multiple projects at any given time and knowledge of functional experts can be leveraged during crisis situation. However, the serious lacunae associated with matrix organization structure certainly outweigh the advantages associated with it. Therefore for engineering projects, which requires dedicated efforts in terms of planning, scheduling, scope, integration and cost management should never adopt a matrix project organization structure.

Atul Gaur has aggregated over twelve years of professional experience and devoted more than ten years in the field of Project Management. He’s a Mechanical Engineering graduate from Manipal Institute of Technology (Manipal) and has Operations Management qualification from Management development Institute in Gurgaon. You can read more from Atul on his blog.

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