The way a business is structured depends on a number of factors, including size, geography, resources, departments and lines of business. In many cases, companies create their structure by combining two or more structures, creating a hybrid or matrix structure.
A customized organizational structure can help your business to run more efficiently and increase your productivity. Regardless of how you structure your organization, it’s important to ensure your employees understand how the organizational structure works, to whom they report and who reports to them.
Features of the Hybrid Structure
A matrix or hybrid structure is an organizational model that combines two or more reporting structures. It’s best suited for work environments that are dynamic, as hybrid structures can shift from project to project.
Most commonly, the hybrid structure combines the functional and product organizational structures. A functional structure is where the company is organized by what people do. For example, all marketing personnel are overseen by a marketing manager, and all sales personnel are overseen by a sales manager. In a product organization, the business is divided by lines of business, such as a baby food manufacturer having specific groups for dry snacks, jarred food and toddler meals.
In a hybrid structure, if the baby food manufacturer was establishing a new product line, it could take functional expertise from various groups such as marketing, research and development and sales to create a product launch team. Those employees would report to their functional managers as well as the project manager for the product launch team.
Benefits of Matrix Departmentalization
There are many benefits of the hybrid organization. The main advantage is that working groups get functional expertise from across the organization. The company can share highly skilled resources for different projects, maximizing the value of their employees.
The employees get to work on a variety of projects and broaden their skill sets in addition to learning new processes and systems within the company. This helps them to expand the scope of their careers within the business. In large organizations, employees may work on several projects at a time, further adding to their knowledge base.
Matrix structures are known to create company loyalty, as employees feel more invested in their position in the organization because they are contributing to multiple areas of the business. This also increases productivity and efficiency within the organization.
Disadvantages of Matrix Departmentalization
There are also some disadvantages of hybrid business models. Since employees report to two or more managers, conflicts in scheduling and priorities may arise. If both managers have equal authority, the employee may be pulled in multiple directions. The managers themselves may have a conflict about who holds the most authority and where resources should be directed. Often, the overhead costs for a matrix structure are high because there are more managers than in a functional or product structure.
If the roles and responsibilities of all employees and managers within a matrix structure are not clearly identified and communicated, there can be confusion about the projects on which people should be working. This can lead to a lack of productivity or delays in the schedule. The workload in a matrix organization is generally high, as employees have to complete their functional responsibilities in addition to their project tasks. Employees can burn out or feel overwhelmed by the amount of work they need to do.
Creating a Hybrid Structure for Your Business
When considering a hybrid structure for your business, carefully plan out the responsibilities of each employee and manager. This way, you can ensure there aren’t any redundancies or duplication of tasks. Similarly, you’ll need to ensure that employees don’t become overworked. In addition, it’s important to outline which manager has higher authority in case conflicts arise.
Anam Ahmed is a Toronto-based writer and editor with over a decade of experience helping small businesses and entrepreneurs reach new heights. She has experience ghostwriting and editing business books, especially those in the "For Dummies" series, in addition to writing and editing web content for the brand. Anam works as a marketing strategist and copywriter, collaborating with everyone from Fortune 500 companies to start-ups, lifestyle bloggers to professional athletes. As a small business owner herself, she is well-versed in what it takes to run and market a small business. Anam earned an M.A. from the University of Toronto and a B.A.H. from Queen's University. Learn more at www.anamahmed.ca.