Table Disadvantages Of A Pure Matrix Organizational Form

• Multidimensional information flow.

• Multidimensional work flow.

• Continuously changing priorities.

• Management goals different from project goals.

• Potential for continuous conflict and conflict resolution.

• Difficulty in monitoring and control.

• Company-wide, the organizational structure is not cost-effective because more people than necessary are required, primarily administrative.

• Each project organization operates independently. Care must be taken that duplication of efforts does not occur.

• More effort and time are needed initially to define policies and procedures, compared to traditional form.

• Functional managers may be biased according to their own set of priorities.

• Balance of power between functional and project organizations must be watched.

• Balance of time, cost, and performance must be monitored.

• Although rapid response time is possible for individual problem resolution, the reaction time can become quite slow.

• Employees and managers are more susceptible to role ambiguity than in traditional form.

• Conflicts and their resolution may be a continuous process (possibly requiring support of an organizational development specialist).

• People do not feel that they have any control over their own destiny when continuously reporting to multiple managers.

customers or corporate or other personnel in addition to his superior and the functional line managers.

Most companies believe that if they have enough resources to staff all of the projects that come along, then the company is "overstaffed." As a result of this philosophy, priorities may change continuously, perhaps even daily. Management's goals for a project may be drastically different from the project's goals, especially if executive involvement is lacking during the definition of a project's requirements in the planning phase. In a matrix, conflicts and their resolution may be a continuous process, especially if priorities change continuously. Regardless of how mature an organization becomes, there will always exist difficulty in monitoring and control because of the complex, multidirectional work flow. Another disadvantage of the matrix organization is that more administrative personnel are needed to develop policies and procedures, and therefore both direct and indirect administrative costs will increase. In addition, it is impossible to manage projects with a matrix if there are steep horizontal or vertical pyramids for supervision and reporting, because each manager in the pyramid will want to reduce the authority of the managers operating within the matrix. Each project organization operates independently. Duplication of effort can easily occur; for example, two projects might be developing the same cost accounting procedure, or functional personnel may be doing similar R&D efforts on different projects. Both vertical and horizontal communication is a must in a project matrix organization.

One of the advantages of the matrix is a rapid response time for problem resolution. This rapid response generally applies to slow-moving projects where problems occur within each functional unit. On fast-moving projects, the reaction time can become quite slow, especially if the problem spans more than one functional unit. This slow reaction time exists because the functional employees assigned to the project do not have the authority to make decisions, allocate functional resources, or change schedules. Only the line managers have this authority. Therefore, in times of crisis, functional managers must be actively brought into the "big picture" and invited to team meetings.

Middleton has listed four additional undesirable results of matrix organizations, results that can affect company capabilities13:

• Project priorities and competition for talent may interrupt the stability of the organization and interfere with its long-range interests by upsetting the traditional business of functional organizations.

• Long-range plans may suffer as the company gets more involved in meeting schedules and fulfilling the requirements of temporary projects.

• Shifting people from project to project may disrupt the training of employees and specialists, thereby hindering the growth and development within their fields of specialization.

• Lessons learned on one project may not be communicated to other projects.

Davis and Lawrence have identified nine additional matrix pathologies14:

• Power struggles: The horizontal versus vertical hierarchy.

• Anarchy: Formation of organizational islands during periods of stress.

• Groupitis: Confusing the matrix as being synonymous with group decision making.

• Collapse during economic crunch: Flourishing during periods of growth and collapsing during lean times.

• Excessive overhead: How much matrix supervision is actually necessary?

• Decision strangulation: Too many people involved in decision-making.

• Sinking: Pushing the matrix down into the depths of the organization.

• Layering: A matrix within a matrix.

• Navel gazing: Becoming overly involved in the internal relationships of the organization.

The matrix structure therefore becomes a compromise in an attempt to obtain the best of two worlds. In pure product management, technology suffered because there wasn't a single group for planning and integration. In the pure functional organization, time and schedule were sacrificed. Matrix project management is an attempt to obtain maximum technology and performance in a cost-effective manner and within time and schedule constraints.

We should note that with proper executive-level planning and control, all of the disadvantages can be eliminated. This is the only organizational form where such control is possible. But companies must resist creating more positions in executive management than are

13. Reprinted by permission of Harvard Business Review. From C. J. Middleton, "How to Set Up a Project Organization," Harvard Business Review, March-April 1967. Copyright © 1967 by the Harvard Business School Publishing Corporation; all rights reserved.

14. Stanley M. Davis and Paul R. Lawrence, Matrix (adapted from pp. 129-144), © 1977. Adapted by permission of Pearson Education, Inc., Upper Saddle River, NJ.

actually necessary as this will drive up overhead rates. However, there is a point where the matrix will become mature and fewer people will be required at the top levels of management.

Previously we identified the necessity for the project manager to be able to establish his own policies, procedures, rules, and guidelines. Obviously, with personnel reporting in two directions and to multiple managers, conflicts over administration can easily occur. According to Shannon15:

When operating under a matrix management approach, it is obviously extremely important that the authority and responsibility of each manager be clearly defined, understood and accepted by both functional and program people. These relationships need to be spelled out in writing. It is essential that in the various operating policies, the specific authority of the program direction, and the authority of the functional executive be defined in terms of operational direction.

Most practitioners consider the matrix to be a two-dimensional system where each project represents a potential profit center and each functional department represents a cost center. (This interpretation can also create conflict because functional departments may feel that they no longer have an input into corporate profits.) For large corporations with multiple divisions, the matrix is no longer two-dimensional, but multidimensional.

William C. Goggin has described geographical area and space and time as the third and fourth dimensions of the Dow Corning matrix16:

Geographical areas . . . business development varied widely from area to area, and the profitcenter and cost-center dimensions could not be carried out everywhere in the same manner. . . . Dow Corning area organizations are patterned after our major U.S. organizations. Although somewhat autonomous in their operation, they subscribe to the overall corporate objectives, operating guidelines, and planning criteria. During the annual planning cycle, for example, there is a mutual exchange of sales, expense, and profit projections between the functional and business managers headquartered in the United States and the area managers around the world.

Space and time. . . . A fourth dimension of the organization denotes fluidity and movement through time. . . . The multidimensional organization is far from rigid; it is constantly changing. Unlike centralized or decentralized systems that are too often rooted deep in the past, the multidimensional organization is geared toward the future: Long-term planning is an inherent part of its operation.

Goggin then went on to describe the advantages that Dow Corning expected to gain from the multidimensional organization:

• Higher profit generation even in an industry (silicones) price-squeezed by competition. (Much of our favorable profit picture seems due to a better overall understanding and practice of expense controls through the company.)

15. Robert Shannon, "Matrix Management Structures," Industrial Engineering, March 1972, pp. 27-28. Published and copyright © 1972 by the Institute of Industrial Engineers, 25 Technology Park, Norcross, Georgia 30092 (770-449-0461). Reprinted with permission.

16. Reprinted by permission of Harvard Business Review. From William C. Goggin, "How the Multidimensional Structure Works at Dow Corning," Harvard Business Review, January-February 1974, pp. 56-57. Copyright © 1973 by the Harvard Business School Publishing Corporation; all rights reserved.

• Increased competitive ability based on technological innovation and product quality without a sacrifice in profitability.

• Sound, fast decision-making at all levels in the organization, facilitated by stratified but open channels of communications, and by a totally participative working environment.

• A healthy and effective balance of authority among the businesses, functions, and areas.

• Progress in developing short- and long-range planning with the support of all employees.

• Resource allocations that are proportional to expected results.

• More stimulating and effective on-the-job training.

• Accountability that is more closely related to responsibility and authority.

• Results that are visible and measurable.

• More top-management time for long-range planning and less need to become involved in day-to-day operations.

Obviously, the matrix structure is the most complex of all organizational forms.

Grinnell and Apple define four situations where it is most practical to consider a matrix17:

• When complex, short-run products are the organization's primary output.

• When a complicated design calls for both innovation and timely completion.

• When several kinds of sophisticated skills are needed in designing, building, and testing the products—skills then need constant updating and development.

• When a rapidly changing marketplace calls for significant changes in products, perhaps between the time they are conceived and delivered.

Matrix implementation requires:

• Training in matrix operations

• Training in how to maintain open communications

• Training in problem solving

• Compatible reward systems

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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