Every organization has a structure that defines how it operates. This can be either a formal or informal structure. When it is a formally defined structure, an organizational chart shows who reports to whom and at what level they function. Top-level management is normally at the top of the organization chart with lower levels flowing down under the person to whom they report. A matrix organizational chart is a specialized organizational chart that defines more complex structures.
A matrix organizational chart describes the areas of communication on a matrix-shaped chart. It couples hierarchy with multiple levels of communication responsibilities. This structure is more complex than traditional structures, but allows for better understanding of organizations where various levels may answer to more than one department head. The matrix contains two axes of power--one vertical and one horizontal.
While most organizational charts are pyramid shaped, a matrix organizational chart describes levels of hierarchy in a matrix-shaped diagram. Traditional organizational charts keep authority positions higher on the pyramid, where the matrix organization chart may keep authority levels on similar lateral lines. This is to better illustrate lines of communication rather than authority.
In organizations where there are multiple departments that share authoritative responsibilities, a matrix organizational chart is the most effective way to demonstrate communication. An example of this is a company that may have a a sales force that answers to legal departments, corporate management and advertising executives.
Project management often requires a variety of departments and teams to work in conjunction with each other to effectively complete the task. Without a clear level of how department leaders interact with each other and lower-level team members, time is lost, mistakes are made and clients go elsewhere. A matrix organizational chart maintains the quality of functional performance through streamlining team structure.
Because a matrix organizational chart is working with a more complex communication structure and hierarchy, it needs to be structured properly. One that isn't properly thought out and executed can be dysfunctional by creating confusion rather than clarity. Confusing communication is always a detriment to the organization or a team.