The Project or Matrix Organisation

Principle & Practice of Management

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The Project or Matrix Organisation

This is one of the latest types of organisational design. It has been developed to establish flexible structure to achieve series of project objectives. Matrix organisation, also known as grid, is an answer to the growing size and complexity of the undertaking, which require an organisation structure more flexible and technically oriented than the line and staff and functional structures.
The matrix organisation is a combination of the project organisation and the functional organisation. Authority flows vertically within functional departments, while authority of project managers flows horizontally crossing vertical lines. Thus, martix organisation is created, “when project management is superimposed on a stable hierarchical structure, usually of a functional nature. Here the individuals working on a project have a continuing dual assignment; to their project and to their base department.”

Matrix Organisation


The important features of the matrix organisation are as follows:
1. Built around specific projects: The matrix organisation is built around specific projects. The charge of the project is given to the project manager who has the necessary authority to complete the project in accordance with the time, cost, quality and other conditions communicated to him by the top management.
2. Personnel from various departments: The project manager draws personnel from various functional departments. He assigns the work to the various functional groups. Upon completion of the project, the functional groups return to their functional departments for reassignment to other projects.
3. Different roles: The project and the functional manager have different roles. The project manager exerts a general management viewpoint with regard to his project. Each functional manager is responsible for maintaining the integrity of his function. However, both the project and functional managers are dependent on each other as they have to take several joint decisions in order to execute the project. So there is proper coordination between the project and the functional groups.
4. Management by objectives: Management by project objectives is paramount to the way of thinking and working in it.


The matric organisation has many advantages. Many organisations which otherwise face problems of structural and technical complexities should adopt this type of organisation. The functional vertical relationships as well as interdependent horizontal relationships lead to operational flexibility. This makes it more adaptable to crisis and change. It provides focus on projects and retains the benefits of specialised expertise and capabilities of functional departments.


It is of a temporary nature. Further, there may be a conflict between project groups and functional groups. It requires coordination of a number of specialised skills. Project personnel entertain considerable fear that termination of a project may bring discharge rather than reassignment to a new project. Frequent movements from one project to another also create considerable anxiety about career progress.
It is very difficult to say which of the types of organisation is the best. On a careful analysis, we find that the line and staff organisation is quite popular in the business world.