Fundamentals of Level Three Leadership

99. The Matrix Organization

Concept

In the post-World War II defense industry, TRW came up with an innovative way to save costs in the development of large budget programs, the matrix organization. The idea was to merge M-Form organizations to reduce redundancies of expensive technical skills like engineers and have those engineers working as needed on more than one program/project at a time. The functional managers would control the talent (engineers), while the program managers (say a missile or an aircraft) would control the budget. The two managers would then negotiate (or have decided for them by management) a pay scale and hours needed.

Matrix organizations ramped up significantly the complexity of large organizations. Now, there were two ...