Sometimes, an organization’s structure needs to be multi focused in that both product and function or product and geography are emphasized at the same time. One way to achieve this is through the matrix structure. The matrix can be used when both technical expertise and product innovation and change are important for meeting organizational goals. The matrix structure often is the answer when organizations find that the functional, divisional and geographical structures combined with horizontal linkage mechanisms will not work.

The matrix is a strong form of horizontal linkage. The unique characteristics of the matrix organization are that both product division and functional structures are implemented simultaneously. The product managers and functional managers have equal authority within the organization, and employers report to both of them. The matrix structure is similar to the use of full-time integrators or product managers, except that in matrix structure the product managers are given formal authority equal to that of the functional managers.

Conditions for the Matrix: A dual hierarchy may seem an unusual way to design an organization, but the matrix is the correct structure when the following conditions are met.

1. Pressure exists to share scarce resources across product lines. The organization is typically medium sized and has a moderate number of product lines. It feels pressure for the shared and flexible use of people and equipment across those products.

2. Environmental pressure exists for two or more critical outputs, such as for in-depth technical knowledge and frequent new products. This dual pressure means a balance of power is needed between the functional and product side of the organization and a dual-authority structure is needed to maintain that balance.

3. The environmental domain of the organization is both complex and uncertain. Frequent external changes and high interdependence between departments require a large amount of coordination and information processing in both vertical and horizontal directions.

The matrix formalizes horizontal teams along with the traditional vertical hierarchy and tries to give equal balance to both. However, the matrix may shift one way or the other. Many companies have found a balanced matrix hard to implement and maintain because one side of the authority structure often dominates. As a consequence, two variations of matrix structure have evolved- the functional matrix and the product matrix.

In a functional matrix, the functional bosses have primary authority and the product managers simply coordinate product activities. In a product matrix, by contrast, the project manager have primary authority and functional manager simply assign technical personnel to projects and provide advisory expertise as needed.