Matrix organization is any organization that employs a multiple command system that includes not only. The multiple command structure, but also related support mechanism and an associated organizational culture and behaviour pattern.
Matrix organization also referred to as multiple command system has two claims of command. One chain of command is functional in which the flow of authority is vertical. The second chain is horizontal depicted by a project team which is led by the project or group manager who is an expert in his teams assigned area of specialization.
Merits / Advantages of Matrix organization in supply management
- Dual Benefit It is a combination of functional departmentalization and purpose departmentalization i.e. technical specialization and emphasis on the overall goal.
- Better Planning And Control It focuses the organizational resources on the specified projects enabling better planning and control.
- Environmental Adaptivity It is the most appropriate structure to respond rapidly to external change. For example, to beat the actions of a competitor, matrix organization may be used to meet customer demand for a better quality product.
- Flexibility It is highly Flexible as regards adherence to rules, procedures e.g., in its case experience is the best guide to establishing rules and procedures
- Better Motivation As any department or division has to harness its efforts towards an accomplishment of a single project, employees are effectively motivated.
- Development of Personnel It provides an excellent framework for training and developing able and efficient managers who, under traditional structures, are subject to restricted functional specialization
- Full use of all available resources The staff used can be utilised in different areas at the same time and therefore no duplication of personnel is necessary.
- Excellence in inter-disciplinary specialisation Since the expertise of the specialists is fully utilised in inter-disciplinary areas and the organization itself demands high quality solutions of complex problems, these opportunities provide a sound basis for expanding the technical excellence into many interdisciplinary activities.
- Top management has more time for strategic planning Since most of the authority is delegated to project managers; it leaves the central management comparatively free to get involved in long range planning rather than operational activities.
Demerits of Matrix organization in supply management
- Violation of unity of command principle As the matrix organization does not follow one subordinate, one boss principle and an employee is often required to report to more than one superior, the result is likely to be an anarchy in which subordinates are at a loss to identify their respective bosses.
- Power Struggle Due to duality of command, intensive power struggle may arise between project and functional departmental heads which may jeopardize an early completion of projects.
- Excessive Emphasis on Group decision making A matrix organization requires joint decision making as regards sharing of organizational resources. In the absence of a spirit of accommodation and understanding, it may not always be possible to make quick decisions, so vital for the successful completion of projects. Too much of democracy may mean inadequate action.
- Excessive Emphasis on conflict Resolution A matrix organization sets a great store by identifying and confronting conflicts and situations which are bound to arise as regards sharing of resources. However, too much of self-analysis and accent on resolution of conflicts may retard efforts towards accomplishment of objectives.
- Heterogeneity A matrix organization is brought into being by temporary drafting of people, mainly professional, from diverse departments. It is therefore, difficult to coordinate the functioning of a heterogeneous group, particularly in the absence of line of authority.
- Administrative costs Continuous vertical and horizontal communication increases the paper work and thus costs.