Sei sulla pagina 1di 18

Matrix Management

Method, Not Magic


Waqas Ali Tunio MS (Manufacturing Engineering & Management) Institute of Manufacturing Engineering & Management Pakistan Navy Engineering College (PNEC), National University of Sciences & Technology (NUST), Karachi Pakistan (waqasalitunio@gmail.com) (www.waqasalitunio.tk)

This document contains collection of articles on Matrix Management from various sources for ready reference.

Matrix Management: Method, Not Magic

Waqas Ali Tunio

Contents
The matrix ..................................................................................................................................................................3 Controversy ................................................................................................................................................................4 Advantages and disadvantages ...................................................................................................................................4 Visual representation .................................................................................................................................................5 Clarification.................................................................................................................................................................5 Matrix Management...................................................................................................................................................5 What is Matrix Management?....................................................................................................................................5 There Four Primary Styles of Matrix Management Organization ..............................................................................5 Balanced Power Matrix ..............................................................................................................................................5 Strong Project Matrix .................................................................................................................................................6 Functional Matrix .......................................................................................................................................................6 Soft Boundaries Matrix ...............................................................................................................................................6 The Truth Behind The Myth Of The Matrix ................................................................................................................7 Real Importance Of Project Management .................................................................................................................7 Matrix Management...................................................................................................................................................8 Matrix Basics...............................................................................................................................................................9 Functional Organization. ............................................................................................................................................9 Divisional Organization. ..............................................................................................................................................9 Matrix Organization................................................................................................................................................. 10 Temporary Versus Permanent. ............................................................................................................................... 11 Advantages, Disadvantages, And Applications........................................................................................................ 11 Advantages. ............................................................................................................................................................. 11 Disadvantages.......................................................................................................................................................... 12 Matrix Structure In International Settings .............................................................................................................. 13 Case Study ............................................................................................................................................................... 13 A Note on the Relative Scarcity of What You Seek ........................................................................................ 14 What is a Matrix? .................................................................................................................................................... 15

Institute of Manufacturing Engineering & Management, Pakistan Navy Engineering College National University of Sciences & Technology (www.pnec.nust.edu.pk)

Matrix Management: Method, Not Magic

Waqas Ali Tunio

Matrix Management
Definition: A style of management where an individual has two reporting superiors (bosses) - one functional and one operational. This is commonly seen in project management where an engineer, for example, reports to the chief engineer functionally, but reports to the project manager on operational project issues. Matrix management also is common in branch offices. The accountant in the Tokyo office reports functionally to the Vice President of Accounting in headquarters in London, but reports operationally to the Regional Manager in charge of the Tokyo office. Generally the functional reporting relationship is stronger, because the functional manager controls the individual's compensation and evaluations.i

Matrix management is a type of organizational management in which people with similar skills are pooled for work assignments. For example, all engineers may be in one engineering department and report to an engineering manager, but these same engineers may be assigned to different projects and report to a different engineering manager or a project manager while working on that project. Therefore, each engineer may have to work under several managers to get their job done.

The matrix
Some organizations fall somewhere between the fully functional and pure matrix. These organizations are defined in A Guide to the Project Management Body of Knowledge (PMBOK) 4th Edition

Institute of Manufacturing Engineering & Management, Pakistan Navy Engineering College National University of Sciences & Technology (www.pnec.nust.edu.pk)

Matrix Management: Method, Not Magic

Waqas Ali Tunio

as composite. For example, even a fundamentally functional or matrix organization may create a special project team to handle a critical project. Whereas project-centered organizations (like those in engineering, construction or the aerospace industries) have structures built around project teams as their functional units, matrix organizations follow the traditional structures, with some adjustments to their hierarchy to support project units.

Controversy
Proponents of matrix management suggest that two advantages exist to matrix management. First, it allows team members to share information more readily across task boundaries. Second, it allows for specialization that can increase depth of knowledge and allow professional development and career progression to be managed. The disadvantage of matrix management is that employees can become confused due to conflicting loyalties. The belief is that a properly managed cooperative environment can neutralize these disadvantages. Opponents of matrix management believe that it is an outdated method to organize a company. One disadvantage of matrix management is that it doubles the number of managers when compared to line management, and as the time to reach a decision increases with the number of managers the result may be an increase in management related overhead expenses.

Advantages and disadvantages


The advantages of a matrix include: Individuals can be chosen according to the needs of the project. The use of a project team that is dynamic and able to view problems in a different way as specialists have been brought together in a new environment. Project managers are directly responsible for completing the project within a specific deadline and budget. Whilst the disadvantages include: A conflict of loyalty between line managers and project managers over the allocation of resources. Projects can be difficult to monitor if teams have a lot of independence. Costs can be increased if more managers (i.e. project managers) are created through the use of project teams.

Institute of Manufacturing Engineering & Management, Pakistan Navy Engineering College National University of Sciences & Technology (www.pnec.nust.edu.pk)

Matrix Management: Method, Not Magic

Waqas Ali Tunio

Visual representation
Representing matrix organizations visually has challenged managers ever since the matrix management structure was invented. Most organizations use dotted lines to represent secondary relationships between people, and charting software such as Visio and OrgPlus support this approach. Until recently, Enterprise resource planning (ERP) and Human resource management systems (HRMS) software did not support matrix reporting. Late releases of SAP software support matrix reporting, and Oracle eBusiness Suite can also be customized to store matrix information.

Clarification
Matrix management should not be confused with "tight matrix". Tight matrix, or co-location, refers to locating offices for a project team in the same room, regardless of management structure. ii

Matrix Management
Matrix Management is a compelling buzzword with a tempting nirvana of shared resources and unlimited access to expertise that lies in other functional areas. But are the resources really ready to be monopolized by multiple managers in a redesign of the organizational structure? Think twice before you plug yourself into the matrix.

What is Matrix Management?


Matrix management is a style of organization in which people are pooled for work assignments or to concentrate on specific tasks. In a standard structured environment, employees in a department report directly to a Functional Manager or supervisor responsible for the performance of a department or business unit. However, in a matrix environment, some of these employees may be assigned with select employees from other departments to simultaneously report to a Project Manager appointed for a specific project. In the matrix organization, employees are treated as shared resources between managers and may have to work under multiple managers simultaneously. Managers may have responsibilities for employees shared on isolated projects as well as sharing manpower for several departmental functions.

There Four Primary Styles of Matrix Management Organization Balanced Power Matrix
In a Balanced Power Matrix organization the resources are assigned from multiple departments and power is shared equally between the Project Manager and the Functional Managers. Philosophically, this type of equality in authority empowers Project Managers to facilitate rapid results by bestowing equal power for making decisions and dictating schedules. However, more often than not, this perception of balanced authority creates conflict. A servant can not serve two masters. The employees are typically

Institute of Manufacturing Engineering & Management, Pakistan Navy Engineering College National University of Sciences & Technology (www.pnec.nust.edu.pk)

Matrix Management: Method, Not Magic

Waqas Ali Tunio

caught in a conflict between the ongoing performance requirements of existing job responsibilities with a Functional Manager and the disparate assignments dictated by a Project Manager. Over extended periods of time either the functional job or the project performance suffer. This is frequently underscored by personality conflicts that arise from inability to monopolize the time of shared resources.

Strong Project Matrix


In a Strong Project Matrix organization the Project Manager is primarily responsible for the project and may recruit resources from multiple business units to achieve a specific task. Functional Managers assign resources as needed to support the project. Frequently the same resources are recruited for multiple projects, creating a strain for the Functional Managers and associated business unit performance. While the Project Manager may have responsibility for the attainment of a defined task, the Functional Manager is ultimately responsible for the performance and assessment of the individual contributor as an employee. In this environment the Project Manager is bestowed with authority, but lacks the balance of accountability and responsibility for the individual contributor. This creates the allure of an "accountability free zone" for Project Managers and recruited resources which eventually degrades into projects with insignificant results, lack of focus and a detriment to functional performance.

Functional Matrix
In a Functional Matrix organization the Project Manager maintains limited authority to oversee the cross-functional aspects of a project. Functional Managers maintain control over the manpower and assign resources according to project requirements. The Project Manager is primarily responsible for documenting the milestones and the progress of the project, communicating regularly with the Functional Managers. In this style of matrix management, the Functional Managers share in the responsibility to achieve project results and the project manager acts as a facilitator, rather than a controlling management capacity.

Soft Boundaries Matrix


In a Soft Boundaries Matrix organization the functional team members provides individual expertise and assign resources on an as needed basis. In this environment it is not necessary for a Project Manager or Functional Manager to oversee the assignment of resources. Individuals may contribute as necessary based on a balance of functional responsibilities and the needs of a particular project, assessing the relative importance and urgency of the day to day job responsibilities and the project tasks. This can be an effective matrix solution in a mature environment that has motivated and capable resources available to contribute as needed for projects.

Institute of Manufacturing Engineering & Management, Pakistan Navy Engineering College National University of Sciences & Technology (www.pnec.nust.edu.pk)

Matrix Management: Method, Not Magic

Waqas Ali Tunio

The Truth Behind the Myth of the Matrix


Proponents of the matrix organization are allured by the concept that highly capable resources can be shared between business units to expedite important strategic projects. Typically the most vocal proponents of adopting matrix management as an organizational structure are those managers that desire to draft the expertise and resources from surrounding functional areas in an effort to compensate for shortcomings in their own functional areas. Such shortcomings are defined as strategic projects and resources are drafted from surrounding functional areas to work under the control of a Project Manager. While this style of organization trumpets the occasional notable project result, it is a mere distraction to the underlying impact of strain and diminished performance of the functional organization. Conceptually the matrix organization is designed to share expertise, knowledge and talent of each individual as needed in multiple functional areas and multiple projects. If all employees shared the same amount of expertise and responsibility in different contexts, then this would be an effective balance. In reality, turn-over of employees creates an unequal balance of experience. Expertise, intellectual capital and experience are rarely equal, so the demands for project related tasks are rarely equal. This can easily create a strain on the most valuable resources within the organization and the associated functional management structure. Matrix management organizations are designed to mandate a formal structure in order to compensate for a lack of coordination and cooperation between functional areas. This can be an indication of a lack of vision, unclear or undefined strategy, conflicts or compartmentalized functional business units. If it is necessary to an independent organized management structure that is distinctly separate and equal in authority to the existing management structure, then there is probably something else broken within your business.

Real Importance of Project Management


Project Management is a very important and valued aspect of many organizations. Effective Project Management is typically characterized by the definitions associated with the Soft Boundary Matrix or the Functional Matrix. When associated with well defined projects that have clearly defined objectives and timelines, the role of Project Manager can be an essential element to the success of an organization. Frequently these projects are associated with implementation projects, integration or installation projects that have easily defined purpose and ends. This is distinctly different from a matrix management organization in which Project Managers exist with a goal to justify their existence by creating new projects. On the contrary, an effective Project Manager should be indistinguishable from a functional team member, sharing the responsibilities, documenting and coordinating progress toward finite goals with well defined purpose.

Institute of Manufacturing Engineering & Management, Pakistan Navy Engineering College National University of Sciences & Technology (www.pnec.nust.edu.pk)

Matrix Management: Method, Not Magic

Waqas Ali Tunio

______________________________________________________ Words of Wisdom "So much of what we call management consists in making it difficult for people to work." - Peter Drucker "Management is too often dictated by the migration toward a good idea, rather than the practice of one." - John Mehrmann, Executive Blueprints "You can't really know how something works until you know why it doesn't work." - Art Sakaguchiiii

MATRIX MANAGEMENT
During the 1920s and 1930s, new ideas about the structure and nature of organizations began to surface. Inspired by the work of thinkers and behaviorists such as Harvard researcher Elton Mayo, who conducted the famed Hawthorne Experiments, theories about management structure began to incorporate a more humanistic view. Those theoretical organizational structures were classified as "organic," and recognized the importance of human behavior and cultural influences in organizations. While the mechanistic school of thought stressed efficiency and production through control, organic models emphasized flexibility and adaptability through employee empowerment. From a structural standpoint, mechanistic organizations tended to be vertical or hierarchical with decisions flowing down through several channels. Organic models, on the other hand, were comparatively flat, or horizontal, and had few managerial levels or centralized controls. Many proponents of organic organizational theory believed it was the solution to the drawbacks of mechanistic organizations. Indeed, mechanistic organizations often stifled human creativity and motivation and were generally insensitive to external influences, such as shifting markets or consumer needs. In contrast, companies that used organic management structures tended to be more responsive and creative. However, many organizations that adopted the organic approach also discovered that, among other drawbacks, it sometimes lacked efficiency and personal accountability and failed to make the most productive use of some workers' expertise. As an alternative to basic organic structures, many companies during the mid-1900s embraced a model that minimized the faults and maximized the benefits of different organic management structures, as discussed below. Possibly the first application of what would later be referred to as the "matrix" structure was employed in 1947 by General Chemicals in its engineering department. In the early 1960s a more formalized matrix method called "unit management" was implemented by a large number of U.S. hospitals. Not until 1965, however, was matrix management formally recognized.

Institute of Manufacturing Engineering & Management, Pakistan Navy Engineering College National University of Sciences & Technology (www.pnec.nust.edu.pk)

Matrix Management: Method, Not Magic

Waqas Ali Tunio

The first organization to design and implement a formal matrix structure was the National Aeronautics and Space Administration (NASA). NASA developed a matrix management system for its space program because it needed to simultaneously emphasize several different functions and projects, none of which could be stressed at the expense of another. It found that traditional management structures were too bureaucratic, hierarchical, slow-moving, and inflexible. Likewise, basic organic structures were too departmentalized (i.e. myopic), thus failing to productively use the far-reaching expertise NASA had at its disposal. NASA's matrix solution overcame those problems by synthesizing projects, such as designing a rocket booster, with organizational functions, such as staffing and finance. Despite doubts about its effectiveness in many applications, matrix management gained broad acceptance in the corporate world during the 1970s, eventually achieving fad status. Its popularity continued during the 1980s as a result of economic changes in the United States, which included slowing domestic market growth and increasing foreign competition. Those changes forced many companies to seek the benefits offered by the matrix model.

MATRIX BASICS FUNCTIONAL ORGANIZATION.


Most organizational structures departmentalize the work force and other resources by one of two methods: by products or by functions. Functional organizations are segmented by key functions. For example, activities related to production, marketing, and finance might be grouped into three respective divisions. Within each division, moreover, activities would be departmentalized into subdepartments. The marketing division, for example, might encompass sales, advertising, and promotion departments. The chief advantage of functionally structured organizations is that they usually achieve a fairly efficient specialization of labor and are relatively easy for employees to comprehend. In addition, functional structures reduce duplication of work because responsibilities are clearly defined on a company-wide basis. However, functional division often causes departments to become short-sighted and provincial, leading to incompatible work styles and poor communication.

DIVISIONAL ORGANIZATION.
Companies that employ a product or divisional structure, by contrast, break the organization down into semiautonomous units and profit centers based on activities, or "projects," such as products, customers, or geography. Regardless of the project used to segment the company, each unit operates as a separate business. For example, a company might be broken down into southern, western, and eastern divisions. Or, it might create separate divisions for consumer, industrial, and institutional products. Again, within each product unit are subdivisions.

Institute of Manufacturing Engineering & Management, Pakistan Navy Engineering College National University of Sciences & Technology (www.pnec.nust.edu.pk)

Matrix Management: Method, Not Magic

Waqas Ali Tunio

One benefit of product or project departmentalization is that it facilitates expansion (because the company can easily add a new division to focus on a new profit opportunity without having to significantly alter existing systems). In addition, accountability is increased because divisional performance can be measured more easily. Furthermore, divisional structures permit decentralized decision making, which allows managers with specific expertise to make key decisions in their area. The potential drawbacks to divisional structures include duplication of efforts in different departments and a lack of horizontal communication. In addition, divisional organizations, like functionally structured companies, may have trouble keeping all departments focused on an overall company goal.

MATRIX ORGANIZATION.
Matrix management structures combine functional and product departmentalization. They simultaneously organize part of a company along product or project lines and part of it around functional lines to get the advantages of both. For example, a diagram of a matrix model might show divisions, such as different product groups, along the top of a table (See Figure 1). Along the left side of the same table would be different functional departments, such as finance, marketing, and production. Within the matrix, each of the product groups would intersect with each of the functional groups, signifying a direct relationship between product teams and administrative divisions. In other words, each team of people assigned to manage a product group might have an individual(s) who also belonged to each of the functional departments, and vice-versa. Theoretically, managers of project groups and managers of functional groups have roughly equal authority within the company. As indicated by the matrix, many employees report to at least two managers. For instance, a member of the accounting department might be assigned to work with the consumer products division, and would report to managers of both departments. Generally, however, managers of functional areas and divisions report to a single authority, such as a president or vice president. Although all matrix structures entail some form of dual authority and multidisciplinary grouping, there are several variations. For example, Kenneth Knight identified three basic matrix management models: coordination, overlay, and secondment. Each of the models can be implemented in various forms that differ in attributes related to decision-making roles, relationships with outside suppliers and buyers, and other factors. Organizations choose different models based on such factors as competitive environments, industries, education and maturity level of the workforce, and existing corporate culture. In the coordination model, staff members remains part of their original departments (or the departments they would most likely belong to under a functional or product structure). Procedures are instituted to ensure cross-departmental cooperation and interaction towards the achievement of extra-departmental goals. In the overlay model, staff members officially become members of two groups, each of which has a separate manager. This model represents the undiluted matrix form described above. In the third

10

Institute of Manufacturing Engineering & Management, Pakistan Navy Engineering College National University of Sciences & Technology (www.pnec.nust.edu.pk)

Matrix Management: Method, Not Magic

Waqas Ali Tunio

version, the secondment model, individuals move from functional departments into project groups and back again, but may effectively belong to one or the other at different times.

TEMPORARY VERSUS PERMANENT.


As these examples and models suggest, matrix structures are more likely than other structures to exist on a temporary or ad hoc basis. Indeed, some scholars group matrix structures under a broader category of organizational forms called "adhocracies," or temporary work configurations, created to deal with a particular problem or project. Large-scale use of adhocracies dates to U.S. military practices during World War II, when the war effort required flexible teams of experts to be convened on short notice and delegated certain tasks, often without a great deal of micromanagement by military brass. Once the objectives were reached, the team would be disbanded and the members reassigned to other duties. A similar rationale and process exist in the business world, and thus many formal matrix structures fall into the ad hoc category. Permanent matrix structures are centered on more enduring aspects of business operations, such as product lines or processes. A common practice is to have a product or brand manager who is responsible for overseeing the development and production of an ongoing product, but staff who work on the product may also contribute to other products from time to time. This permanent set-up creates accountability, coordination, and perhaps most of all, continuity for the product as a whole, while enabling staff, who generally have a direct supervisor who is not a product manager, to be flexibly assigned where they are needed most.

ADVANTAGES, DISADVANTAGES, AND APPLICATIONS ADVANTAGES.


The cardinal advantage of a matrix structure is that it facilitates rapid response to change in two or more environments. For instance, a telecommunications company might be extremely concerned about both unforeseen geographic opportunities and limited capital. By departmentalizing its company with the financial function on one axis and the geographic areas on the other, it might benefit from having each of its geographic units intertwined with its finance department. For example, suppose that an opportunity to purchase the cellular telephone rights for a specific area arose. The matrix structure would allow the company to quickly determine if it had the capital necessary to purchase the license and develop the area, or if it should take advantage of an opportunity in another region. Matrix structures are flatter and more responsive than other types of structures because they permit more efficient exchanges of information. Because people from different departments are cooperating so closely, they are eager to share data that will help them achieve common goals. In effect, the entire organization becomes an information web; data is channeled both vertically and horizontally as people exchange technical knowledge, marketing data, product ideas, financial information to make decisions.

11

Institute of Manufacturing Engineering & Management, Pakistan Navy Engineering College National University of Sciences & Technology (www.pnec.nust.edu.pk)

Matrix Management: Method, Not Magic

Waqas Ali Tunio

In addition to speed and flexibility, matrix organization may result in a more efficient use of resources than other organic structures. This occurs because highly specialized employees and equipment are shared by departments. For example, if the expertise of a computer programmer is needed in another department, he or she can move to that department to solve its problems, rather than languishing on tasks of low priority as might happen in a nonmatrix setting. Other benefits of matrix management include improved motivation and more adept managers. Improved motivation results from decision-making within groups becoming more democratic and participatory because each member brings specialized knowledge to the tablend since employees have a direct impact on day-to-day decisions, they are more likely to experience higher levels of motivation and commitment to the goals of the departments to which they belong. More adept management is the result of top decision makers becoming more involved in, and thus better informed about, the day-to-day operations of the company. This involvement can also lead to improved long-term planning.

DISADVANTAGES.
Despite their many theoretical advantages, matrix management structures have been criticized as having a number of weaknesses. For instance, they are typically expensive to maintain, partly because of more complex reporting requirements. In addition, many workers become disturbed by the lack of a chain of command and a seeming inability to perceive who is in charge. Indeed, among the most common criticisms of matrix management is that it results in role ambiguity and conflict. For instance, a functional manager may tell a subordinate one thing, and then a product/project boss will tell him or her something different. As a result, companies that change from a comparatively bureaucratic structure to matrix management often experience high turnover and worker dissatisfaction. Supporting critics' derision of matrix management are several examples of companies that have implemented and later abandoned matrix structures. For example, one study showed that between 1961 and 1978 about one-quarter of all teaching hospitals in the United States moved to unit or matrix management structures. By the late 1970s, though, nearly one-third of those hospitals had rejected the concept, citing reasons such as high costs, excessive turnover, and interpersonal conflict. Although the hospital study suggested that matrix management was better suited to larger organizations, General Motors Corp.'s experience indicated otherwise. After a seven-year test of a matrix structure, GM jettisoned matrix management in the 1980s in favor of a more traditional, product oriented organizational structure. It cited managers' lack of control over incentives as a primary shortcoming of the matrix system. Although matrix management was often viewed during the 1970s as a cure-all for organizational design, the perceived breadth of its potential for application has gradually diminished. In general, matrix structures are assumed to be most appropriate for larger corporations that operate in unique or fast-paced environments; a coal-mining company, for example, might be less likely to benefit from a matrix structure than would a pharmaceutical company. Matrix management also works best for organizations

12

Institute of Manufacturing Engineering & Management, Pakistan Navy Engineering College National University of Sciences & Technology (www.pnec.nust.edu.pk)

Matrix Management: Method, Not Magic

Waqas Ali Tunio

that are managed and staffed mostly by professionals or semi-professionals, e.g., engineers and scientists. Matrix management further requires a workforce that has a diverse set of skills and employees that have strong interpersonal abilities. Finally, matrix management is usually more effective when a project manager, who is technically working under the authority of a product and a functional boss, is given the authority to make critical decisions. Because of their limitations, matrix management structures frequently are integrated into an organization as one facet of a larger plan. For example, a research team organized to develop a new product might be placed in a division of the company that is set up as a matrix. After the initial stages of the project are completed, the ongoing management of the product might be moved to a division of the company that reflects a more conventional functional or product/project structure. Indeed, as evidenced by NASA's successes in the 1960s, matrix management is particularly effective in accomplishing "crash" and hightech projects, such as those related to medical, energy research, aerospace, defense, and competitive threats.

MATRIX STRUCTURE IN INTERNATIONAL SETTINGS


A special and popular application of matrix management is in the overseas operations of an international firm. This is sometimes known as a three dimensional matrix when management intersects along product/market, function, and country lines. Under such an arrangement there is typically a worldwide product manager, a local or worldwide functional manager, and a country specific manager; however, many variations of the international matrix exist. The product manager is generally concerned with product-specific issues that cut across regional or national boundaries. Depending on the type of task and the company's preference, the functional manager may focus on international issues (e.g., worldwide finance) or local concerns (e.g., domestic finance). Finally, the country manager is concerned with all the implicationsoth product and functionf producing and/or marketing the goods or services in a particular locale. As with other uses of the matrix structure, the international format is not without its weaknesses. A particular concern is the role of ambiguity across international lines, and especially when it pits managers of different nationalities against one another. If the system is not handled carefully and the potential for cultural bias recognized by top management, it could lead to favoritism of some international managers while disenfranchising others, thereby defeating the purpose of a matrix structure. In addition, international matrix structures may be unacceptably inefficient and costly to maintain.

CASE STUDY
Bayer AG of Germanyhe company best known in the United States for its Bayer aspirin productss one of the largest and oldest chemical and health-care products companies in the world. Because of massive sales gains and increased activity overseas in the early 1980s, Bayer announced a reorganization in

13

Institute of Manufacturing Engineering & Management, Pakistan Navy Engineering College National University of Sciences & Technology (www.pnec.nust.edu.pk)

Matrix Management: Method, Not Magic

Waqas Ali Tunio

1984. Bayer had been successful with a conventional organizational structure that was departmentalized by function. However, in response to new conditions the company wanted to create a structure that would allow it to achieve three primary goals: (1) shift management control from the then-West German parent company to its foreign divisions and subsidiaries; (2) restructure its business divisions to more clearly define their duties; and (3) flatten the organization, or empower lower level managers to assume more responsibility, so that top executives would have more time to plan strategy. Bayer selected a relatively diverse matrix management format to pursue its goals. It delineated all of its business activities into six groups under an umbrella company called Bayer World. Within each of the six groups were several subgroups made up of product categories such as dyestuffs, fibers, or chemicals. Likewise, each of its administrative and service functions were regrouped under Bayer World into one of several functions, such as human resources, marketing, plant administration, or finance. Furthermore, top managers who had formally headed functional groups were given authority over separate geographic regions, which, like the product groups, were supported by and entwined with the functional groups. The net effect of the reorganization was that the original nine functional departments were broken down into 19 multidisciplinary, interconnected business groups. After only one year of operation, Bayer management lauded the new matrix structure as a resounding success. Not only did matrix management allow the company to move toward its primary goals, but it had the added benefits of increasing its responsiveness to change and emerging opportunities, and of helping Bayer to streamline plant administration and service division activities.iv

Matrix Management: Method, Not Magic


By Ronald A. Gunn, Strategic Futures principal As organizations take more multidisciplinary approaches to accomplishing work and as management and staff juggle multiple assignments at once, there is renewed interest in the power of matrix organization and management. At Strategic Futures, we receive e-messages from throughout the world asking for more information about matrix management. This article is posted on our Web site to help our site visitors access some information and learn how Strategic Futures can provide additional assistance on a fee-for-service basis. A Note on the Relative Scarcity of What You Seek If you are reading this, you are probably aware that there is a relative paucity of useful literature concerning matrix management. The best stuff is no longer in print; I was lucky enough to be exposed to some of it by one of my most cherished management professors nearly two decades ago. I have my opinionated, possibly vitriolic, theories as to why this literature shortage exists. Suffice it to say that more complicated, less sexy, management approaches that were honed in engineering and other R&D environments some four decades ago dont garner much interest from many of todays business

14

Institute of Manufacturing Engineering & Management, Pakistan Navy Engineering College National University of Sciences & Technology (www.pnec.nust.edu.pk)

Matrix Management: Method, Not Magic

Waqas Ali Tunio

book publishers. Theres neither management magic nor mysticism in the matrix approach. This is about the hard-driving, producing organizationnot fluff-of-the-month. A disciplined, methodical approach is required and, in case you havent noticed, this is in relatively short supply and it suffers from less-thanburning popularity. If your organization is ill-positioned for a disciplined, methodical approach to work organization and management, you may want to lobby quietly against matrix management and on behalf of a different meaning slower, simpler, less powerfulapproach in your organization. Im serious.

What is a Matrix?
Webster is useful here. Websters defines a matrix as "something within which something else originates or develops." The relevance of this definition to matrix management is that the matrix matters less than the projects or multidisciplinary processes which emerge from this approach to organization and management. More to the point, however, is the definition which states "something resembling a mathematical matrix, especially in its rectangular arrangement of elements into rows and columns." Rows and columns: The horizontal and the vertical. The horizontal and the vertical intersecting into a grid, where the grid is a network of interfaces. A matrix interface is where the focus of authority and responsibility comes into play, largely determining who works with whom on a project, product, or other process flow. These interfaces can be between the project teams and the functional elements of an organization.

Or, a horizontal axis can be a process flow, product line, or activity set that is not a project, but which requires multidisciplinary cooperation if timely success is to be achieved.

15

Institute of Manufacturing Engineering & Management, Pakistan Navy Engineering College National University of Sciences & Technology (www.pnec.nust.edu.pk)

Matrix Management: Method, Not Magic

Waqas Ali Tunio

A Network of Interfaces The matrix model is a network of interfaces between teams and the functional elements of an organization. In the above model, there are 12 interfaces. Dont read too much into matrix management. Matrix management is not a metaphysical experience. Its profundity is to be found in its simplicity. Think horizontal. Think vertical. Think interface. Why do some otherwise fine minds race unproductively when presented with the concept of an organizational matrix? Why do these minds "hypercomplexify" the matrix? It may be because most organizations todayand most employees in those organizationshave considerable experience in relating to a traditional vertical management chain. Most people are hard-wired to think "up the chain:" What do the bosses above us want and how shall we organize our efforts to please and provide? The vertical aspect of the organization is not erased when matrix management is introduced, its just that non-traditional horizontal management becomes as important, if not sometimes more important than traditional vertical management. This is unfamiliar and it is counterintuitive, particularly to those who are accustomed to binary, all-or-nothing thinking which holds if organizational power is not vertical, then it must be all horizontal, rather than both. Furthermore, the matrix model is an apparent violation of the unity of command principle, which states that one should receive orders from one and only one individual in the chain of command. That was then. This is now. The apparent violation can be avoided by the use of the Basic Matrix Role Dichotomy, which attaches vertical responsibilities as to how the task will be done and who will do it, to functional management where such decisions properly reside, as examples. The horizontal responsibilities and prerogatives address team or process management questions such as what, when, why, budget, and post mortem evaluation. The successful matrix is "both/and" rather than "either/or," i.e., both the horizontal and the vertical must be in balance and alignment with one another. As we shall see later, this fine-tuning of the vertical and the horizontal is one of the most difficult aspects of matrix management. A growing number of organizations have experience with a horizontal chain of people working in a multidisciplinary, or cross-functional team setting. Where there are one or two such teams operating at the same time, things can be relatively manageable. Its when several or many of these cross-functional teams are cobbled together into a matrix which requires that people relate to one another vertically, horizontally, and diagonallyall at the same time!that the terrain becomes unfamiliar and downright tricky. What color is the sky on your matrix-managed planet?! Lets see how this plays out in a live example, drawn from, say pharmaceutical R&D. Peter is a biostatistician who is currently assigned to 3 separate cross-functional drug teams. He "reports" to three Project Team Directors as well as to the head of his functional department, the Vice President for Biostatistical Research. Two of the drug teams are working on schedule and the biostatistical aspect of the work is going swimmingly. Unfortunately for Peter, the third drug team is behind schedule. There are problems in almost every function associated with this drug, including Regulatory Affairs. This team promises to consume more effort from all of its members and detract effort from other teams that are

16

Institute of Manufacturing Engineering & Management, Pakistan Navy Engineering College National University of Sciences & Technology (www.pnec.nust.edu.pk)

Matrix Management: Method, Not Magic

Waqas Ali Tunio

functioning smoothly. What should be done? How do we not abandon the herd to chase one errant lamb? There are several possibilities for managing this situation, but all of them assume that someof the essentials of the matrix organization are available: An essential part of organizational design and implementation planning is to map out the organizational arrangements that will be used in managing the enterprise. All too often this mapping is given short shrift. Magically, somehow, people are supposed to "know what to do." They dont. I eschew sports analogies, but the inescapable fact is that the matrix is like a football team: The individual and collective roles must be planned in advance so all the players know their own authority and responsibility and that of the other players. A Linear Responsibility Chart which maps consultation and coordination requirements, along with actual decision-making authority depicts the scope of advance thinking that needs to get done. It needs to get done with the active involvement and consensus of participating managers, both vertical and horizontal. Another ingredient required for success is that the participants in a matrix organization must have a clear sense of the goals, objectives, and accountable performance metrics. There must be both vertical and horizontal alignment of goals, objectives, and metrics if the matrix is to function properly. Misalignment, competition or conflict among managers goals, objectives, and metrics will create gridlock in the matrixacross functions, across locations, or all of the above and more.

Another ingredient required for success is that the participants in a matrix organization must have a clear sense of the goals, objectives, and accountable performance metrics. There must be both vertical and horizontal alignment of goals, objectives, and metrics if the matrix is to function properly. Misalignment, competition or conflict among managers goals, objectives, and metrics will create gridlock in the matrixacross functions, across locations, or all of the above and more. Gridlock occurs, the matrix can readily degenerate, melting into personalities and power politics. If the matrix lacks an explicit, rational foundation, then politicsthe human way of solving problems and allocating resources when rational means dont workcome into play, with all of the attendant organizational dysfunction that unbridled politics typically bring. Rich and rapid communications about issues that matter are essential to the success of the matrix organization. Without such communications, the vertical and horizontal lines of the matrix will sag, as will the spirits, talents, and contributions of the people in the matrix To make communications matter, there needs to be a shared view of the benefits, the advantages of the matrix organization. Potential benefits may include advantages such as: A reduction in the number of organizational levels, resulting in a flattened hierarchy. An elimination of unnecessary work that fails to add value to the enterprise, particularly "coordinative" and "checkers-checking-checkers" kind of work.

17

Institute of Manufacturing Engineering & Management, Pakistan Navy Engineering College National University of Sciences & Technology (www.pnec.nust.edu.pk)

Matrix Management: Method, Not Magic

Waqas Ali Tunio

An organization design based on processes which add genuine value, such as product development or order entry, rather than functions or departments that may become processobsessed or narcissistic. A structure which is capable of bringing focus and power to the management of change and to rapid agility within the Firm. The use of management across and diagonally in the Firm. Managing the "white spaces" between traditional vertical lines is the real payoff because organizational boundaries can be reduced or blurred as core processes are performed more efficiently and effectively. Greater professional development opportunities afforded by rich interaction with other disciplines. More self-management and a wider realm of work in the jobs. Higher-and-better use of staff time and talent. Stark illumination of resource constraints with a corresponding requirement to set priorities in an explicit way. More rapid team-based elimination of work that fails to add value to the enterprise. Yes, there is more, but not now

If the benefits of the matrix organization are unknown to the participants, the organizational design may take on a "flavor-of-the-month" characteristic. If the potential benefits are perceived, but participants havent figured out how to function together to access these benefits, there will be frustration, cynicism, and great opportunities for the Dilbert cynic-voyeur. With this description of the matrix organization and three essentials for making it work, this article draws to a close. Yes, there are other operational definitions and examples of how the matrix works. Of course, there are other essentials, but you dont really expect to get much more for free do you? Do you work for free? You are also not going to get a "school solution" to Peters Matrix Dilemma, introduced earlier. However, free of charge, you get the following closing paragraph: If wishes were horses, then beggars would ride: The matrix cannot be "wished" into place. Drive-by management wont make it happen either. Tantrums, stomping, and two-bit power plays, while entertaining, dont make it happen. The hard work of defining and negotiating how this structure should work simply cannot be avoided. Then and only then can the tedious-at-first process of learning how to derive matrix managements powerful benefits be pursued with lasting success. Strategic Futures can help with the heavy lifting. Call us if youre serious. Call a big, bloated, paint-by-numbers outfit with plenty of hour-churning juniors if you are not serious; they will roll you with a smile, belching out a spiral-bound report that takes you nowhere slowly.v
i

http://management.about.com/od/projectmanagement/g/MatrixManagemen.htm http://en.wikipedia.org/wiki/Matrix_management iii http://www.executiveblueprints.com/tips/070826matrixmanagement.htm iv http://www.enotes.com/matrix-management-and-structure-reference/matrix-management-and-structure v http://www.strategicfutures.com/library/matrix-management/article-matrix-management-method-not-magic/


ii

18

Institute of Manufacturing Engineering & Management, Pakistan Navy Engineering College National University of Sciences & Technology (www.pnec.nust.edu.pk)