Explain the advantages and disadvantages of a matrix structure in organisations.

Essay by baizUniversity, Master'sB, December 2003

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In the economic literature no one generally corresponding definition for the concept "Matrix-Organisation" exists. Nevertheless some general principles can be found:

-While in the conventional organisation forms just one criterion is selected and used for the structure on a certain level, it is typical for the matrix organisation that simultaneously and with equal rights two or more structure features are taken into consideration.

-Thereby emerges a "mixed organisation form", which also contains a horizontal responsibility as an addition to the vertical hierarchy. Under the concept "mixed organisation form" it is understood, that more than one principle of the "classic management theory" with regard to the groups formation (e.g. customer group, process, place) can be inserted. As a result, a double influence sphere can be recognised where the corresponding team or employee is. The employees stand therewith in a "system of dual leadership".

-In this organisation form, consequently, a two partly or even multidimensional channel exists, where authority, responsibility for the performance execution, evaluation and control are exercised.

The history of the matrix organisation and the reasons for its establishment

The origin of the matrix organisation can be expressed as a developmental variation in project management. After the American Ministry for Defence gained some beneficial experience in project management during the Second World War, for the development and the building of the first atomic bomb (project Manhattan), several government departments encouraged this type of organisational structure in the private industry sector stipulating, that all companies who would like to receive orders, needed to present one contact person who was competent in answering all necessary questions. In this manner, the government departments could avoid being in contact with several contact people inside the same company which, due to the variety of projects and participating companies would have...