Organization structures have been continuously evolving, trying to find the best and the most efficient ways to organize workers and functions of a business into a manner that is easy on the eye. Long gone are the days when organizations divided work into divisions, where the division of labor metaphor was a key player. Division of labor, while appealing to the economic minded people out there, has long since evolved and corporations have moved on to more creative and effective forms of management.
The organization structure that was predominantly in place since the turn of the 19th century was the functional organization, or as they are sometimes called, unitary or U-form organizational structure. This organizational form might sound familiar to some of you, as they are still around and quite common in small scale operations. This organization structure is characterized by departments and sections, each tasked with doing their own work. Each of these groups work independent of each other, in their own little happy place, unaware of the workings of the organizations other organs. Business functions such as operations and projects are broken down to bits and pieces and the task of any individual is to follow the orders from the department head and get things done as they are told. The big picture, is often lost, unknown or simply irrelevant to staff working in the functional organization. There are of course many advantages. All the advantages of division of labor still applies here, the organization structure is super efficient at getting things done, while keeping the costs down.
However, by the mid 20th century, things needed to change. Functional organizations were seen to be too restrictive, lateral communication were non existent, only happening at the senior level and the dependency on the senior management as authoritative heads who hold the big picture was diminutive on the smaller guys. Enter the projectized organization, the divisional or the M-form structure. Things are not too different from the functional structure, aside from the main big difference. The walls still exist in this structure between departments, but instead of each department specializing in a particular skill set, this structure has departments filled with people with all the skill sets required for delivering a business function. Need a project done? A division exists to handle everything related to the project. Need a product? Another division with another set of employees are setup and broken down as the product is initiated and finally delivered. This organization structure is extremely effective and efficient. It, however, is not economical. Staff and resources are never shared and even if the staff does get an immediate short term idea of the big picture, the long term strategic goals are not a big deal for the workers because a) they only do the function they are tasked with and b) they are most likely on the job hunt again once the project finishes.
The shortcomings of the functional organization and the projectized organization gave way to a different breed that kicked off during the space race between USA and USSR. The race was on, the stakes were high and both countries were putting in a lot of resources to conquer the next frontier. Born out of necessity, the matrix organization (or the MX-form) structure is a mix of functional and projectized organization structure. Divisions exists as they do in the traditional functional organizations but what NASA did was to form teams that lie horizontally or the normally vertical hierarchy. So staff now had two bosses, the department head and the project head. This form was quickly adopted by large organizations, particularly multinational organizations, where staff usually answered departmental or the product manager and a geographical manager as well. The matrix fixed all the faults in the stars of the organization structure universe; it was effective, efficient and economical.
However, things haven’t been quite as perky as they should have been. The matrix organization structure had seen many success stories and failures as well. Organizations seems to be picking it up and letting it go to later change their minds about it, over and over. The big innovation to the management world in the last 30 years has had its flaws and a critical eye is needed to see the problem. The matrix organization structure breaks a grand rule of management, unity of authority to gain its advantages and because its broken, the structure suffers greatly. Having two bosses is exactly as daunting as it sounds (because sometimes having one is one too many). The organization structure has been plagued with inter organizational conflicts and stress among over worked employees. The grand success of the structure has not been without its negative aspects.
So what gives? Why do some matrices succeed while other matrices (like Matrix 2 and 3) fail? It’s because of organizational change and the most unpredictable aspect of this change, which is the people aspect.Matrix structures usually are adopted once organizations have reached its adolescence and asking an adolescent to move out of his/her comfort zone is usually met with natural resistance to change or give anything else a try. Managers walk in, ready to give instructions to his/her workers, knowing full well that he/she should probably talk to the other manager first… but still don’t. Why? Because that’s how things used to be before. He/she is still in authority and as far as the other matrix counterpart is concerned, that’s just an abomination he/she has to deal with now. These kinds of scenarios have lead to unnatural amount of conflicts in the matrix structure. Conflicts that are not advantageous, by the way. Conflicts that are more personal in nature. A great amount of research has been conducted to work out why some matrix works and a whole load of them points to the training given to staff (including managers) about the organizational change taking place when moving into a matrix. Organizations just need to put in a little forethought into the emotions of their workers to make things work like a charm.