From the course: Managing in a Matrixed Organization

Defining a matrixed organization

From the course: Managing in a Matrixed Organization

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Defining a matrixed organization

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- A matrix organization is one where there are dual reporting relationships, one boss runs one area and the other boss runs another related area. You're accountable to both of those bosses for results. These areas can be functional, geographic, or operational. Here are a couple of examples. You may have a situation where there is a plant manager. They are responsible to the global head of operations. They are also responsible to the head of the German business unit where that plant is located. The head of global operations wants global efficiency. The head of the German business unit wants to maintain the German profit and loss statement. You may have a situation where there is a hospital oncology service line. It has its own profit and loss statement, and it's accountable to the system for the performance of that service line. It's also accountable to the hospital where it resides, and managing the economics of those individual hospitals is where the second reporting relationship exists. You may have an advertising technology form. There is an Irish sales team. They are accountable to the global sales vice president. They also drive Irish top line revenue, working with the Irish general manager. The goal of a matrix organization is to accelerate decision-making and help functional teams work more efficiently with one another. It accelerates decision-making because it brings all the players to the table and forces goal alignment across them. It drives efficiency from having direct relationships with areas where a boss owns the resources for getting things done versus having to rely on influence to make things happen in the organization. While a matrix organization is a bit complex to operate, the benefits can be tremendous.

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