Difference Between Matrix and Functional Structure

Management Structure is a fundamental and necessary part of every business and organisation. It is an essential component that defines how roles and responsibilities are assigned, how information flows, and how the employees and teams are administered. There is no one size fits all for a management structure.

Different organizations will require varying structures to lay down the management. This article will discuss Matrix and Functional Structure in an organization. Knowing the ins and outs of both will enable more informed decision-making and implementation of the more suitable management structure according to the situation.

Matrix Structure

As the name might suggest, in a Matrix structure, instead of following an old school top-down hierarchy, the reporting hierarchy is organized in a matrix or grid. There are two main personnel that the employees report to- Functional Manager, and Project Manager. Function Manager acts as the expert in the employees' fields and take reports. Project Manager acts as the manager for a specific project and take employee reports regarding that project.

Types of Matrix Structure

1. Weak Matrix: In this structure, the functional managers hold most of the power while the project managers only coordinate.
2. Balanced Matrix: Each department head holds equal power.
3. Strong Matrix: Project Managers control the majority of resources and decision-making processes.

Advantages of Matrix Structure

1. Efficient Resource Sharing: Employees from different fields collaborate on a project and report to a common project manager. This allows the project manager to utilise everyone's set of skills, project resources, sharing of expertise and knowledge etc.
2. Employee Growth: Since, various employees with different areas of expertise collaborate in a Matrix management, it enables them to develop new skills, gain knowledge about the other subjects and adds to their overall experience and knowledge.
3. Improved Communication: Matrix structures, by nature, encourage more communication between the team members, the managers and the various department heads. The employees serve as bridges to their departments for other team members. This improves the overall communication within the organisation and its departments.
4. Job Security: Employees in a Matrix Organisation enjoy better job security. This is due to the fact that one individual alone cannot fire an employee based on their perception of said employee without consulting and arriving at agreement with other involved department heads.
5. Flexibility: Since, the resources from various departments are pooled in this structure. This allows higher-ups to allocate the best candidates for a requirement internally and then re-allocate them to their regular duties without much of an issue.
6. Less downtime: Instead of making the employees from one department learn new skills for a project, the work responsibilities can be distributed according the team members involved from that department, so that everyone is working with what they are well-equipped at. This reduces any downtime that would otherwise occur if employees had to adapt to new things and develop new skills.

Disadvantages of Matrix Structure

1. Disagreement between Managers: Multiple managers and supervisors exist in a matrix structure. Thus, it is vital that they are on the same page. If there is any disagreement, or lack of communication between the managers, then it directly affects the productivity of the entire organisation.
2. Power Struggle between Managers: It is entirely plausible for managers to try and hold more control over the decision-making processes and resources on a project team. This leads to a discord in the project team.
3. Employee Personal Agenda: Sometimes, some employees might try to create a discord between supervisors intentionally by manipulating them with deceptive talk, holding information or spreading false information etc. in order to fulfil their personal agendas, such as reducing work while the managers get busy in a dispute, or to get rid of an individual entirely.
4. Complexity: The matrix system can be pretty complex for less experienced individuals. In a traditional top-down hierarchy, the organisation works in a clear and simple manner. However, with a matrix system, high degree of cooperation, reporting to multiple managers as employees, or managing multiple employees with different departments alongside other managers as a supervisor can prove to be a complex structure to get used to.
5. Increased Workload: Employees have to do a greater amount of reporting and communicating within such a structure, while also being involved for varying responsibilities. Moreover, if a worker is skilled in a particular area, then they might be overloaded with more work for different projects, since selecting employees internally is promoted in a matrix structure.

Functional Structure

As the name might imply, in a Functional management structure, the work force of an organisation is divided based to the respective departments and areas of expertise. Each of the departments have a functional head that acts as the supervisor for all the employees in that department.

Every important field required by the organisation has its own department - Marketing, Customer Support, Sales, HR, IT etc. are a few examples. The employees report to their department head, who then reports to the higher authority executives.

Advantages of Functional Structure

1. Better Employee Specialization: As everybody is assigned to their respective departments where they can apply and use their particular sets of skills, it creates the opportunity for workers to focus on that specific field, allowing them to gain an even deeper understanding, more experience and eventually specialization in the subject.
2. Better Efficiency: In this structure, employees are allocated to only one department, roles and daily responsibilities are clearly defined, and the lack of any changes within the department brings clarity, reduces redundancy and improves overall efficiency.
3. Accountability: Having clearly defined roles and responsibilities enables employees to develop the realisation for their responsibility and form a sense of accountability for their work and department.
4. Improved Communication: Since all employees are designated to their respective departments, the communications within that department get more efficient as everyone is on the same page, equally informed about the subject.
5. Resource efficiency: In a functional structure, each department has clearly defined fields of expertise and roles, which also enables the allocation of resources being necessary in only one place for that specific field instead of having the need to micromanage resources across various departments.
6. Faster Decision-making: With all the minds for one subject are allocated in the same department, it allows those with expertise to quickly make better and informed decisions as there is no need to go over any specific information.

Disadvantages of Functional Structure

1. Isolation: Teams and employees in one department are usually assigned for the long-term and continue to work with the same responsibilities within the department only. This reduces the opportunities to collaborate with other departments of the organisation.
2. Lack of common Goals: When the workers are all focused only on their departments on a daily basis, then it naturally leads them to work towards individual goals and their respective department goals rather than working for the organisation's goals.
3. Resource Conflicts: The lack of collaboration and communication makes it so when more than one department need a common resource, then it is likely for a conflict to arise. The presence of isolation hinders the ability of these employees to coordinate with other departments.
4. Reduced Adaptability: As the employees only follow strict pre-defined rules, and responsibilities, it makes the work environment rigid, which often times leads these employees to having reduced adaptability if the work environment changes or if they had to work with other department workers on a common project.
5. Limited Creativity: When an employee is only doing the same type of work over and over each day, while being constrained by their department, it discourages innovation and creativity.

Differences Table

Conclusion

In conclusion, the matrix structure is a more modernised approach to management in an organisation whose main goal is to promote collaboration, communication, flexibility, and efficiency while the functional structure is a more traditional oriented approach, whose main goal is to enhance productivity and encourage skill specialization in pre-defined departments. Both have their own strengths and weaknesses. Both sides of the coin need to be weighed and informed decision should be made by an organisation to implement the most appropriate management structure.