Prior to 1970, generally sizable business organizations were arranged in silos, which are logical divisions of workers in which a group of people reported to a line or functional manager. The attempt to create a successful restructuring of the organization in order to develop workable project management teams is known as a matrix organization.
For example, one Information Technology company may have software programmers in the customer service department, the finance department, and on development teams because each of those divisions has needed computer programmers to fulfill their job requirements.
In the 1970s, companies started to improve organizational operations, resulting in the development of an organizational structure to become known as "Matrix".
A matrix organization employs a structure that uses functional managers, or, in other words, managers who lead groups of employees that have similar roles. In the previous example of a technology company, all computer programmers are placed in one department under a single manager. This department would conduct the majority of programming for the company.
In a silo style organization, workers with specific skills (such as typing or engineering) are placed under a single functional manager. This manager will usually control all administrative and managerial functions of the group such as promotions and holiday leave. The manger is general someone who is expert or at least has senior understanding of the groups function.
With what we have covered thus far, it may appear that a matrix organization and a traditional company have similar structures excepting the categorization of each silo's workers based on their duties. Another notable exception between the two is that a matrix is ordered into rows or lines, which extend across each column.
While traditional organizations were often successful they were not particularly efficient and often contained the seeds of confusion and failure. The structure of these organizations tended towards duplication of effort and inefficient use of skills within the company. Workers on a project worked for different functional managers instead of being supervised by a single project manager. The concept of a team of workers dedicated to a specific project was at best not generally understood and often viewed by some managers as a threat to their area of control.
Picture the functions of the project manager as leading the workers in a row of a chart which extends horizontally across several columns. Each column represents a group of workers with similar functions who are overseen by one manager. The project manager leads workers from different function groups.
With this kind of organizational structure, tension between project managers and functional managers is present. Because each manager has a different duty to perform, and these duties must be performed by workers shared by both parties, a conflict of interests naturally occurs.
There are several kinds of matrix organizations, each intended to provide the managers with exactly the resources and autonomy they require.
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