The nature of matrix organisations

Hello. My name is Dr. Mike Clayton, and I'm the founder and presenter of the Management Courses YouTube channel. This is the second of our short series of talks on matrix organisations. In this one, we're going to look at the nature of matrix organisations.

In that last talk, we saw a little of how matrix organisations work with individual managers in reporting relationships with several other managers in different dimensions. Each of those more senior managers is responsible for a different aspect or dimension of the organisation. But what I didn't answer is the obvious question. Why do we call these matrix organisations?

In mathematics, the simplest non-trivial matrix has two dimensions. Therefore, it is an array of numbers with a certain list of numbers across one dimension and a certain list of numbers in another. A two-dimensional matrix organisation looks rather similar. In this diagram, we can see that we have four different regions and five functions. Therefore, we have, in principle, 20 elements to the matrix. An individual who works in Asia for logistics has two reporting lines to their senior manager, at the Asia level and to their senior manager in the logistics function. Of course, matrices can have three or more dimensions. In fact, the example I gave at the start of this talk was a three-dimensional matrix organisation, which had functions and regions and also service lines. Can matrix organisations have even more dimensions, like four or five or six? Yes, in principle. But thankfully, the most common is three dimensions, because at three dimensions, it's already complex enough for managers to navigate their way through the organisation.