We investigate the Picard group of a structural matrix (or incidence) algeb
ra A of a finite preordered set P over a field and we consider five interre
lated problems. Our main technique involves establishing a connection betwe
en the group of outer automorphisms Out(A) of A and the group of outer auto
morphisms of the basic algebra (A) over tilde which is an incidence algebra
of the associated partially ordered set (P) over tilde of P. We discuss ne
cessary and sufficient conditions for Out(A) to be a natural invariant for
the Morita equivalence class of A, and necessary and sufficient conditions
for M-n(K) to be strongly graded by a group G and coefficient ring A contai
ning n primitive, orthogonal idempotents. (C) 2000 Published by Elsevier Sc
ience Inc. All rights reserved.