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The matrix style of project management came into existence in the 1970s as a result of continuous efforts to improve organizational structure and operations. A matrix organization uses a structure that has functional managers who are in charge of groups of employees who perform similar roles. The structure of such organizations led to managers seeing this change as a threat to their area of control. These results in what can be called, unnecessary tensions between the project managers and the functional managers because of the need to perform different activities with the same set of employees.
Initially introduced to cope up with the growing complexity of projects in the aerospace industry, this structure of project management has been adopted in many cases to deal with internal and external problems of an organization. There are manifold advantages that such a style of management offers. To start with, there is better coordination on shared resources and technologies across the organizations. It also improves the coordination and communication across the business along with increasing the employees’; access to a broad range of skills. Matrix management works best when an organization has goals that have defined clearly and it is properly cascaded to the goals of the horizontal and vertical components within the matrix. Apart from these advantages, the matrix management style also has a few major challenges.
The segregation of the reporting structure to project managers and functional managers can lead to conflict and stress in the organization. These multiple reporting lines can result in people not taking accountability for their work, which in turn can erode the organizational culture. Such organizations are vulnerable to constant and repeated reorganization. Reorganization can disrupt the normal functioning of the organization and the know-how of the same.
Often, we have also noticed that the matrix management has its focus on short-term goals rather than long-term success. The root of this problem lies in the fact that there is no clarity on who is responsible for what and people also have no idea what to address for information that is needed to solve a problem or take a decision. This not only causes immediate issues but also leads to long-term problems. One of the other biggest challenges to the concept of matrix management is getting "buy in" from those affected. Matrix management is often regarded as another popular fad of the month as it lays emphasis on core competencies because of which the employees are suspicious of management. Companies are resorting to matrix management as a standard for rebuilding organizations and this is evident from the market demands these days.