Small Business Terms: Define Matrix Organization

by Craig Anthony

0 min read

A matrix organization is an organizational structure, often temporary in nature, designed to support the management of a specific project or business-specific processes. The lines of authority and reporting extend both vertically and horizontally, forming a matrix. It typically involves bringing together employees and managers from different departments under a new command and control structure. Employees in a matrix organization report horizontally to a project manager while still reporting vertically to their department manager.

The concept of a matrix organization is to create cross-company collaboration by merging different functional disciplines for the purpose of achieving a specific goal. Companies cite higher employee productivity and more efficient problem-solving as major benefits of using a matrix organization. Employees are exposed to different functions apart from their core function, which fosters employee development.

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