8.2.1 Matrix structure
A matrix uses two or more integrated co-existing structures simultaneously. What distinguishes a matrix from a hybrid structure is its grid-like intersection of multiple lines of authority and responsibility. The firm shown in Figure 8.3 below creates its matrix by superimposing a product division over a functional group. The functional finance, marketing, operations and human resources units give the matrix its vertical structure, while the product division gives it a horizontal structure.
figure 8.3 A matrix structure
A major feature of the matrix, which has both advantages and disadvantages, is the dual authority system which requires some managers to be accountable to two bosses at the same time. In Figure 8.3, for example, Manager A is responsible to the Marketing Manager as well as to the Manager for Product A. In Ciba-Geigy, the Swiss chemical and pharmaceutical MNE, Product A might be a new drug. Ciba-Geigy, incidentally, has a matrix of three dimensions - product, function and geography - so Manager A might be a marketing manager in Europe or Australia .
Being responsible to two bosses gives rise to conflict, ambiguity and responsibility gaps. This means that managing a matrix requires considerable personal and organisational skills on the part of managers in the matrix. The Royal Dutch Shell case on pages 476-477 of your textbook illustrates well the problems encountered in a matrix organisation.
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