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This document summarizes and compares matrix and flat organizational structures. It describes matrix structures as having employees report to multiple managers or teams simultaneously. Three types of matrix structures are outlined based on the level of authority given to project vs functional managers. Flat structures are defined as having little to no middle management and empowering employees to make decisions. The advantages and disadvantages of each structure are listed. Philips and Valve are provided as examples that have implemented matrix and flat structures, respectively.

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22 views13 pages

Ob Presentation

This document summarizes and compares matrix and flat organizational structures. It describes matrix structures as having employees report to multiple managers or teams simultaneously. Three types of matrix structures are outlined based on the level of authority given to project vs functional managers. Flat structures are defined as having little to no middle management and empowering employees to make decisions. The advantages and disadvantages of each structure are listed. Philips and Valve are provided as examples that have implemented matrix and flat structures, respectively.

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cifex10357
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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TYPES OF

ORGANIZATIONAL
SYSTEM
Topic:-MATRIX AND FLAT ORGANIZATIONAL SYSTEM

~JOSEPH SUNNY
3. MATRIX ORGANIZATIONAL
SYSTEM
• Unlike other organizational structures, the matrix structure is
complex. While most businesses implement a hierarchical system, a
matrix organization creates a reporting relationship by creating a grid
i.e., a matrix. Therefore, an individual reports to two or more
managers or team leaders at the same time. Typically, a project or
product manager and a functional manager supervise an employee.
• An individual engages with multiple functional areas and works on
different projects. Big projects or product development processes
often rely on matrix structures. They are becoming more common in
today’s world of business. Large organizations, especially those with
global operations and multiple business units benefit from a matrix
structure.
• This type of structure is often useful when skills need to be shared
across departments to complete a task and can allow companies to
utilize a wide range of talents and strengths.
• There are three types of matrix organizational structures:

1. Weak matrix organization


This type of matrix organizational structure is most similar to a
traditional workplace hierarchy. A functional manager oversees all
aspects of a project and acts as the primary source of decision
making. While there is a project manager who also acts as a point of
authority, they ultimately answer to the functional manager.
2. Balanced matrix organization
In this type of matrix organizational structure, more authority is given
to the project manager. While there is still a functional manager who
is the primary authority, employees also report to the project
manager

3. Strong matrix organization


A strong matrix organization provides the project manager with equal
or more power than the functional manager. The project manager has
primary control over resources and distribution of tasks.
Advantages of matrix organizational
system
• There are several benefits of implementing a matrix organizational
structure within the workplace. These benefits include:
1. Increased communication efficiency
2. Increased teamwork
3. Maximizes resource usage
4. Increased employee professional development
Disadvantages of matrix organizational
system
1. Potential conflict between managers and projects
2. Authority confusion
3. Reduced employee effectiveness
4. Increased management overhead costs
EXAMPLE FOR MATRIX
ORGANIZATIONAL SYSTEM
• PHILIPS
You’ve probably heard about Philips, the Dutch multinational electronics enterprise. Set up in
the 1970s, it’s an early example of matrix structure.
In fact, it was the first organization to set a matrix structure after the Second World War.
It created a network of national organizations (Nos) and product divisions (PDs). Despite the
large network, it successfully managed conflicts by setting up a coordination committee.
However, Philips realized that it was too confusing for everyone because of a lack of
accountability.
It was in the 1990s that the organization upgraded its structure to solve the recurring
challenges. This reorganization separated a few powerful PDs who had worldwide
responsibilities of managing the profits and losses.
Currently, employees report to both product division and geographical managers and the
structure continues to excel.
4. FLAT ORGANIZATIONAL SYSTEM
• Flat organizational structure is defined as an entity where the top
management is in direct contact with the front-line salespeople,
employees at the floor levels as well as the customers.
• In such an organization leadership is decentralized, and there is no
role and responsibility of the mid-management levels. The purpose of
a flat organizational structure is to have very little hierarchy so that
everyone becomes adept at handling whatever work comes their way.
• This organization is also described as self-managed.
• The idea behind this organizational structure is to reduce bureaucracy
and empower employees to make decisions, become creative
problem solvers, and take responsibility for their actions.
• Since there are minimal or no levels of middle management, a
company that adopts this structure can end up being more productive
by speeding up the decision-making processes.
• Apart from increased productivity, firms with flat organizations have
leaner budgets, since they don’t involve any pricey middle-
management salaries.
Advantages of flat organization structure
• Cost-efficient
• Improved employee retention
• Improves employee morale
• Encourages faster decisions
• Clear and direct communication
• The direct route to customer
Disadvantages of flat organizational
structure
• The chance of losing control is high
• Hinders growth
• The chance of errors is high
• Creates power struggle
• Employee retention is severe
• Motivation level is less
• Wastage of time
Example for Flat Organizational System
The most famous example of this comes from Valve, the gaming
company responsible for classics such as Half-Life, Counter-Strike,
Portal, and many others. At Valve there are no job titles and nobody
tells you what to work on. Instead all the employees at Valve can see
what projects are being worked on and can join whichever project they
want. If an employee wants to start their own project then they are
responsible for securing funding and building their team. For some this
sounds like a dream for others, their worst nightmare.

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