The reason we choose the matrix organization is because we know this structure will be very important in the future. Matrix organization is the best-know application of project management, a project structure imposed on top of a functional structure. Matrix organizations evolved to capitalize on the advantages of project and matrix structure while minimizing their disadvantages. An important aspect of the matrix structure is each person work on the project and has two superiors which are project manager and functional manager. The project managers' report to a top-level manager and this will help a lot in decision making. Example users of matrix structure include bank, insurance, companies, chemical manufactures and colleges.
The matrix organization combines the best feature of the project and functional structure. It is flexible, yet it offers the advantages of task specialization. Matrix structure is known for its ability to facilitate high-quality and innovative solutions to difficult technical problems. The project structure also gives people a degree of freedom that enhances their development as managers. Also of note is the fact that the matrix organization offers ample opportunity for job rotation on many projects. So should a company employ the matrix structure in order to have better management?
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The answer is yes. Why? Because in this modern life the matrix structure will help company perform better. Matrix structure also will make the company organization become more systematic and more efficient.
The matrix structure will make the company become more systematic. In matrix organization there have functional manager and product managers. The work will be divided and job can be done easily. This will bring benefit to the company and matrix organization will minimize the weakness of the company. Every employee in the company that uses the matrix structure has their own work that need to be done. So the job is divided and can be done easily and more systematic. (Andrew 1993)
Functional managers are in charge of specialized resources such as production, quality control, inventories, scheduling and selling. They will know in doing they own job and the work can be done with the efficient outcome. Colleges often use matrix organization to setting up the programs, for example industry seminars and adult education. (Andrew 1993)
Product managers in charge of one or more products so they have their own specific jobs to be done. Project managers usually will report to top level managers. The examples of users of matrix structure include banks, insurance companies and colleges. (Andrew 1993)
For example, Champion products Inc, creating the separate marketing department. Furthermore, this allows managers and employees more familiar and specific with the market. (Andrew 1993)
However, the matrix structure also brings risk for the main company. In the matrix management structure, when one company operated loss, it will influence others. The main company supports it by more money, the market budget will be decreases, and this will be relative to the development of new product. Finally, the sales and profit will be influenced.
Although the matrix management structure is easy to design and appears to have advantages, it may be difficult to implement. Problems can arise over shared responsibility, the use of resources in common and the question of priorities. ( Hannagan 2002)
In a matrix management company, most of the data and information are shared, and it is a risk of duplication. Some managers may be not satisfied about the salaries or the job opportunity, when other company provide better reward, those managers will leave and take many useful resource, such as some valuable employees and customers' information. For the main company, the loss is more than what we can imaginable.
Those problems I mentioned have existed in IBM and Shell Oil firms. In 1980s, the Shell Oil Company applied the matrix structure, and it has been influenced in sales because of communication problems.
Matrix structure has those problems, nevertheless, it is also a positive impact, which allowing teams to share information across task boundaries and enabling managers and staff to share skills and experience so that increase whole team's productivity.
Matrix structure will give or open more opportunities for job. The company which uses matrix structure will hire many workers or employees. This will give more opportunity job to people to get a job, and it also decrease unemployment rate in the particular country. Many projects mean needs more employees so this will give or offer the opportunity job to people. (Andrew 1993) For example, if the company like mustang or Taurus comes out with new project or models, they will need employees such as engineering to work with them. (Kinichi & Williams 2003)
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People in particular country will get more knowledge about international management. Employees maybe will train in other country to learn more about the company objective. It will add the employees' knowledge. For example, the US firm, Bow Chemical. In 1970 many firms moved away from using the matrix structure but Bow believes this structure will bring advantages and will give good performance among employees. ( Paul, aleny 1993)
Moreover matrix structure will give local people in particular country to get training, improving their skills and also can learn the skill of different management from different country.
Some problem about cost and communication appeared in matrix structure, Using matrix structure will need more cost and more discussion than action. It's uncountable that using matrix management structure need high cost in a short term period. When a company wants to expand business in other country, it must prepare capital for building new factory, and hiring employees. For those companies that they don't have enough money for high cost and cover the loss in the beginning is high risk.
Another problem is that too much democracy can lead to not enough action ( IreLand 2007). In the company, the matrix management will use much time to discuss the procedures in producing and increasing sales. However, at the end of discussing, just bit actions can be achieved, and sometimes the important decision for major project is also missed. Furthermore, the employees' lazy emotion is easily appearing in matrix structure companies.
To some extent, matrix structure has encouraged power struggles. The managers have ordered their employees help him apply the power, and used had ways and methods, these influence other department managers, even though have a bad impact on the company.
For example, Ford Company has a problem in finance. Because the high management cost and expenses, it decreased the profit directly. Some situations have been happened in IBM, COCA-COLA, and Toyota Company.
Matrix structure will save management time. Every country has the branches that handle about the products in a particular country, so it's totally will save the management time. In matrix structure managers have three main major roles. The work is divided between functional and product managers. So they have the own task to be done. It's will save time and also separates the power or balance the power between the managers. (Jerald Greenbery 1999) Functional and product managers have specific jobs to be done in this structure the employee also must report their task to their manager so it make fair and balance powers between the managers.
Moreover by using matrix structure the main company easy to make decision. Besides that they easy to get feedback from other company under them and it will help to improve their product and services. TRW systems group, Liberty Mutual Insurance and Citibank is some of the company that adopts matrix structure. This will help the company in doing the decision making. (Jerald Greenbery 1999)
On the other hand, the main company also easily to control the company under them and adjust the marketing strategy. In this structure every employee got they own duties and all work hard to raise the return for the company with doing their specific task. Furthermore they can respond to the changing very fast and finding the best environment. However in controlling, matrix structure maybe will cause stressful among managers. But if looking for the benefit that the company will get benefit in future, Matrix structure totally useful. (Jerald Greenbery 1999)
Dow Chemical, it believes that matrix structure will improve their management when other companies stop using the structure, Bow still continue using it because he believe that matrix structure will give improvement and make him easily to control the employees.
Matrix structure is a permanent organization designed to achieve specific results by using teams of specialists from different functional area in the organization. For example, Ford UK produces motor cars aimed specifically at the UK and European markets and adapts its marketing and sales techniques to the requirements of these markets. UK can be treated as a distinct market requiring clear focus on the approach to it. There are many advantages by using the matrix organizations such as focus on end product, stimulus creativity, provides challenges and improves communication and understanding (Mondy & Premeaux 1992)
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On the contrast, matrix structure has creative the problems in communication, management cost, and responsibility. These will influence company's performance even though to be a threat for a company's development and increase company's competition.
However, in a long term, if the company can improve their management and use matrix structure effectively, it will show that matrix structure is very necessary and important strategy for those companies which aim to be the most successful survivors in the competitive market. In USA, one third of most successful companies have used matrix structure, and it illustrates how the matrix structure can help companies close to the famous and success.