Management control in matrix structures

The matrix organization is an organizational structure in which the work is divided in

projects. Each project is a profit center and is looked after by the project manager. Each
project team has functional level employees that report to their respective functional
managers and their project manager

Matrix organizational structure assigns multiple responsibilities to the functional heads.

Evaluation of performance of such organizational entities is very difficult. Though they
offer economies of using scares functional staff, it poses problems of casting the
individual responsibility. This form of organization is very complex, from the point of
view of management control system.

At the end we must not forget that the management control system is for the organization
and not the organization exists for management control system. One has to mold and
remold the management control system to suit the given organization structure

Usually in an advertisement agency, account supervisors are shifted from one account to
another on periodic basis, this practice allows the agency to look at the account from the
perspectives of different executives. However taking in to consideration the time lag of
result realization in such services is quite large. And this may pose problem of
performance assessment of a particular executive. This does not mean a control system
designer should insist on abandoning the rotation system of the executives.

Matrix structure offers advantages such as faster decision making process, efficiency and
effectiveness but simultaneously it may pose problems such as added complexity in
control function, assignment of responsibility and authority etc.

Following are the advantages of Matrix organizational structure:

1 Minimization of project costs, due to sharing of resources.

2 Mimimization of conflicts , Stress distribution between the team
3 Balance between time, cost and performance
4 Sharing of authority and responsibility
5 Information sharing
6 Resource sharing
7 Ideal for project based organization
8 Better coordination between the team

Following are the disadvantages

1Two bosses can create conflict of authority

2 Limited applicability
3 Not suitable for small organizations
4 Complete responsibility of the Manager for success or failure
5 Suitable only for project based organization