Matrix management is a type of organizational management in which people with similar skills are pooled for work assignments. For example, all engineers may be in one engineering department and report to an engineering manager, but these same engineers may be assigned to different projects and report to a different engineering manager or a project manager while working on that project. Therefore, each engineer may have to work under several managers to get their job done.
In other words, * A matrix organization is a cross-functional work team that brings together individuals from different functional departments, product departments or divisions to accomplish a specific goal. * As a result, a dual-reporting organization structure is formed where each member of the matrix organization reports to the manager of the cross-functional team as well as the manager of the department that sourced the team member.
The matrix organization is an adhocracy design that has four major disadvantages i.e. psychological stress, conflict, inefficiency and cost.
Psychological Stress * The matrix organization is dynamic in terms of both form and function. The team members, team structure, work roles and work role interfaces lack stability even within a project life cycle. However, the ability of an individual to adapt to change is in part based on the individual's aptitude for establishing human relationships. This conflict between the somewhat rapid fluctuation in the structure and function of the team and the individual's need for stable relationships can lead to team members experiencing psychological stress.
Conflict
* A matrix organization does not exhibit clear lines of authority or responsibility in that the boss-subordinate relationship may not be clear. In addition, a cross-functional team member may receive one direction from a functional manager and a different direction from the cross-functional team manager.