One of the advantages of implementing the matrix organizational structure in a business is that it can lead to an efficient exchange of information. Departments work closely together and communicate with each other frequently to solve issues. Efficient lines of communication enhance productivity and allow for quick decision-making. For example, in a matrix structure, individuals from the marketing, finance and product departments may confer with one another to formulate strategies. The specialized information exchange allows managers to respond quickly to the needs of customers and the organization. Increased Motivation
The matrix structure encourages a democratic leadership style. This style incorporates the input of team members before managers make decisions. The ability to contribute valuable information before decisions are made leads to employee satisfaction and increased motivation. In a matrix structure, each employee brings his expertise to the table. Managers are involved in the day-to-day operations, which allows them to make decisions through the viewpoint of employees. Related Reading: Advantages of Hybrid Organizational Structures Internal Complexity
A disadvantage of the matrix structure is that it can result in internal complexity. Some employees may become confused as to who their direct supervisor is. For example, an employee may receive different directions concerning the same thing from supervisors in different departments. The dual authority and communication problems may cause division among employees and managers. Miscommunication and ineffective managing can result in employee dissatisfaction and low morale. Prolonged issues may cause an organization to experience high employee turnover. Expensive to Maintain and Internal Conflict
Another disadvantage of the matrix organizational structure is that it is expensive to maintain. A company’s overhead cost typically increases because of the need for double management. The extra salaries an organization must pay can put a strain on its resources. The sharing of employees may cause unhealthy competition between managers within a company.