Organizational Wellness

Drive Innovation With a Matrix Organizational Structure

Apr 23, 2023
Last Updated May 10, 2024

You know how the chain of command at work usually goes something like you, your boss, your boss’s boss, and so on until you reach the CEO? This structure works for a lot of situations so it’s become the default — but there are other options for how you organize your employees to actively encourage collaboration and improve the quality of their work. 

If that sounds too good to be true, buckle up! There’s a way to have the best of both worlds: clear organization and the dream team for every project. It’s called matrix organization.

Matrix management structures can transform the way your employees interact with their managers and colleagues for greater efficiency, more diverse insights, and consistent employee growth. And more inclusive cultures have been shown to lead to higher employee retention, so you can keep your top performers around for the long haul.


What Is Matrix Organizational Structure?

A matrix organizational structure is an alternative to the top-down structure familiar to most people. 

Employees are still organized within departments, as in the traditional functional structure, but those departments frequently work together. Instead of always working within static departments, project-specific teams are created based on initiative or deliverable goals to ensure optimal performance. These project-based teams are built with members from different departments based on skills and expertise.

Working within this structure requires two different styles of managers. Companies often have  functional managers, who oversee specialists, and project managers, who oversee teams.

Advantages of Matrix Organizational Structures

One of the biggest advantages of this organizational structure is increased collaboration. Because specialists work on projects with members from other departments, they have more opportunities to hear other perspectives and learn from each other. And with increased collaboration comes more innovation. Information is more openly shared and employees can offer suggestions on projects that they may not have been involved in with a traditional organizational structure. 

This organizational structure plays a large role in shaping a company culture. With more flexibility, teams can address specific challenges, projects, and goals with diverse experience and expertise. This also means that employees have more opportunities for development and greater autonomy over their own roles within the company. 

Another advantage of a matrix organizational structure is more informed decisions and better alignment behind those decisions. Employees from each department can contribute to the decision-making process to ensure that crucial information is not overlooked. 

As employees are given chances to work on projects that highlight their strengths, your company will experience higher employee engagement and increased performance. In fact, employees who use their strengths every day are six times more likely to be engaged on the job. Employees want to understand how they fit into the company and understand the impact of their contributions, and a matrix organizational structure can help.

Disadvantages of Matrix Organizational Structures

While the flexibility of a matrix organizational structure can be an advantage, it can also lead to confusion about roles and responsibilities among managers and specialists. With the overlap between specialists and project teams, employees can become stressed about understanding their primary responsibilities and confused about who they report to. If an employee takes a question to both their functional management and project manager, they could receive differing answers which increase confusion and slows down productivity. Similarly, there is the potential for unclear management and communication issues between departments. As the functional and project managers work to create clear goals and priorities, employees can be left in a state of limbo with no clear direction. 

All of these factors can combine to slow down the decision-making process and create difficulty in balancing priorities. With more input from different teams, there is more information to sift through and there can be conflicting opinions about the best solutions for problems. Managers can focus on different priorities, which means less cohesion across the company. This leads to longer time spent finding a resolution and executing a plan that supports the primary goals and successful projects.

Is a Matrix Organizational Structure the Best Choice for You?

As with any other organizational structure, matrix organizational structure comes with different advantages and disadvantages that you will need to consider. It is designed to support flexible and diverse teams and encourage collaboration, but there is the potential for miscommunication and conflict between multiple managers. A strong and well-executed matrix organizational structure, however, can promote employee engagement. 

The structure that you choose and the benefits that you offer your employees have a large influence on company culture as a whole, so be sure to carefully consider the many options available before you make a decision. Wellhub is passionate about helping you provide your employees with the tools and resources they need to experience wellbeing both in and out of the workplace. For more details about what we offer, talk to a Wellness Specialist today.

Company healthcare costs drop by up to 35% with Wellhub! (* Based on proprietary research comparing healthcare costs of active Wellhub users to non-users.) Talk to a Wellbeing Specialist to see how we can help reduce your healthcare spending!



Wellhub Editorial Team

The Wellhub Editorial Team empowers HR leaders to support worker wellbeing. Our original research, trend analyses, and helpful how-tos provide the tools they need to improve workforce wellness in today's fast-shifting professional landscape.


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