Matrix Management: Benefits, Conflicts, and Organizational Impact

Introduction

Corporations are consistently seeking ways to improve their overall organizational performance and consumers' perceptions of their quality of service and innovativeness. Over the last several years, the matrix structure of management — where an employee has a direct-report manager but is also influenced and heavily directed (and sometimes funded) by another manager or organization — has become a major organizational trend. Matrix management is rapidly becoming popularized and adopted by corporations seeking solutions to budgetary, manpower, and productivity issues.

To the individual, a matrix management strategy presents the challenge of serving two masters. To managers, it presents challenges in directing the behavior of employees who do not report directly to them and whom they cannot directly reprimand or dismiss. For matrix teams, members also often struggle with varying agendas and incentive plans, making it difficult for management to coalesce the team. Power struggles and employee conflicts have plagued many organizations that have adopted matrix systems as an integral part of daily functioning.

The problem that managers face, therefore, is determining whether the faults of a matrix management style outweigh the benefits. The aim of this research study is to examine the nature of the matrix structure of management and the problems inherent in it, in order to propose a better solution or organizational paradigm for management success. The preliminary research review suggests that inherent in any matrix management style is the potential for inter-group conflict; thus this paper will also seek to determine whether solutions to this negative aspect of matrix management can be identified.

Matrix management styles, much like other management programs including total quality management (TQM) and customer relations management (CRM), are rapidly becoming an increasingly popular style of management. Their potential for success and failure are explored in greater depth below.

Literature Review

Hayden, Kaya, and Wood (2002) suggest a model similar to the matrix style of management that may prove beneficial to organizations. Called the "power bloc" theory, Hayden, Kaya, and Wood suggest that the boards or management teams of two different corporations can effectively coordinate plans and decisions "by interlocking directors through the boards of two other corporations." The idea is that by networking, firms can build density and extend their influence and power. Similarly, within any given organization, when used beneficially, more than one manager or director can oversee the operations of a single group of employees in order to facilitate greater productivity and influence. However, when dealing with employee behaviors and attitudes, having more than one manager to report to can prove challenging and cumbersome, particularly when substantial thought is not put into defining each manager's roles and functions.

Burns (1989) conducted a study of 315 hospitals utilizing matrix management programs. His study verifies that matrix management "involves several distinctive elements" that can be used to develop lateral coordinative devices within an organization. When first developed, the concept of matrix management was viewed as the last step of a series of lateral coordinative mechanisms, ranging from liaison roles and task forces to the pure matrix (Burns, 1989). Burns suggests that matrix management systems provide new venues for strategic team-making and productivity. Most organizations are interested in building teams and improving productivity, and a program that facilitates teamwork is therefore eagerly adopted.

Gobeli, Gray, and Larson (1991) describe a matrix organization as a "hybrid structure" in which personnel are assigned to a basic functional area and one or more projects, with each project having a designated project manager whose influence varies according to the matrix type. They describe three distinct types. In the first, a functional matrix, the project manager's role is limited to coordinating and expediting the project, while functional managers are responsible for the design and completion of the technical requirements. In a project matrix, the project manager has primary control over the project's completion, and functional managers are limited to providing personnel and technical advice. In a balanced matrix, functional managers and the project manager share joint responsibility for all aspects of a project (Gobeli, Gray, & Larson, 1991).

Larson and Gobeli (1987) note that although all three matrix structures are commonly used, most managers prefer the project matrix model. Matrix management systems are popular due to the efficiency of resource use they promote and the ability to share personnel across differing projects. Despite these advantages, Gobeli, Gray, and Larson (1991) point out that among the problems related to multi-boss management networks are slow reaction times, power struggles, and dysfunctional conflict.

Project matrix structures have the ability to alleviate some of these problems by assigning the project manager primary control over the project and its employees. Evans (1992) notes that in today's global marketplace the role of management is continuing to develop. He suggests that matrix structures in their simplest forms may offer the promise of combined centralization and decentralization, but cautions that managers must also acknowledge the limits of any matrix system, as too many competing forces can thwart the efforts of any matrix structure.

Macy (2002) states that despite tremendous enthusiasm for models such as matrix management, surveys suggest that "about three out of four managers end up disappointed" with the outcome of such systems. He suggests that the philosophy of matrix management is much like that of a "silver bullet" for solving production and management problems, when the real solution lies in practice and planning.

Opposing this view, however, are supporters such as Walker (2000), who states that agencies — particularly government agencies — "need to employ matrix management principles" in order to bring the right skills to the table to address organizational development issues. Matrix management, according to Walker, when used correctly, can serve to increase productivity. To address the obstacles organizations have faced when employing basic matrix management principles, Walker (2000) suggests minimizing management layers and avoiding redundancies, in order to create more vibrant partnerships between officials and communities. He further suggests that organizations need to align their mission and vision with a matrix management approach, focusing on succession planning and mentoring, training, and paying attention to employee performance issues and feedback from across the agency.

Nurick (1993) suggests that matrix management models have the potential to increase organizational flexibility, further stating that "technological complexity and specialization have increased the need for flexibility." One of the challenges matrix management systems present is "melding the talents" of individuals with diverse backgrounds and skills in order to bring people together cohesively to work toward successful completion of the larger task at hand — a process that might also be referred to as team building.

Nurick cites Wilemon and Thamhain (1983) in stating that team building is "a process of taking a collection of individuals with different needs, backgrounds and expertise and transforming them by various methods into an integrated, effective unit." Task and relationship factors are responsible for defining the parameters of a team, and these factors may also play into defining the parameters of any well-conceived matrix management system.

The majority of researchers (Nurick, 1993; Wilemon & Thamhain, 1983; Walker, 2000) acknowledge that power struggles have the ability to undermine even the most well-structured matrix. Perhaps managers would do better, as Nurick (1993) suggests, to de-emphasize task functions and instead emphasize the group's inner workings and relationships. By improving internal relationships, conflicts are inherently reduced, and matrix systems should naturally result in greater productivity.

Role conflict and power struggles are perhaps the two most severe problem areas related to matrix management systems. Role conflict has the potential to create and perpetuate ambiguity when team members serve multiple roles and report to different leaders (Nurick, 1993). Such situations may result in conflicting loyalties as employees struggle to decide which demands to satisfy first. Role conflict typically occurs across units, whereas power struggles more commonly result in vertical conflict, where different authority levels are represented on a team and certain individuals attempt to exercise more power over the group than others (Nurick, 1993).

Nurick (1985) uses the example of a team established as a collaborative employee-management group whose mission was to improve the quality of work life in one division of an organization. Midway through the project, additional senior managers were included on the team, and rather than acting as team members they assumed individual managerial roles, such that meetings became directive rather than problem-solving sessions as originally intended.

Eom (1999) states that task force teams have long been considered among the most powerful tools organizations have for coping with "complex, interdependent and transient tasks" in a matrix management structure where turbulence and uncertainty are more likely to exist than not. He further suggests that task force teams should be made up of members from multiple departments. Task force teams can band together to solve internal problems that might otherwise result in conflict within a matrix environment. There are limitations to task force teams, including their inability to be organized when members of an organization are physically dispersed (Eom, 1999). This problem, however, might be eliminated through the use of virtual meetings, given today's technologically superior communications systems. Task force teams can assist in defining the core competencies of an organization and its projects, collectively focusing on ensuring organizational survival and transcending productivity-related obstacles.

Epstein and Staw (2000) engaged in a study that examined the effects of adopting popular management techniques, including matrix management, to assess whether organizational performance increased as a result of implementation. They found a strong relationship between organizations that used matrix management and other popular techniques, yet their results indicated a lack of improved corporate performance attributable to adoption of popular techniques such as TQM and matrix management. Implementation of such techniques did, however, tend to improve the reputation of the organizations examined. The results further indicate that firms implementing techniques such as matrices are perceived to be on the cutting edge of innovation and quality. These outcomes were measured over one-, three-, four-, and five-year periods.