Matrix structures and performance: The search for optimal adjustment to organizational objectives

Matrix structures continue to be utilized at high-tech companies despite co nsiderable evidence about the many shortcomings of the method. Empirical re search among companies employing matrix structures revealed three different resource allocation policies: 1) profit and cost centers; 2) direct priori ties; and 3) comprehensive allocation planning, In order to evaluate organi zational performance for each policy, a simulation was constructed to ascer tain the optimal distribution of influence for managers under different wor k parameters and for various organizational objectives. The simulation prov ided answers for when organizational and market conditions necessitate incr eases or reductions in the influence of project managers in order to reach optimum performance. Based on the organizational objectives selected for th is study, different patterns were found to characterize decision-making, Pa tterns varied considerably, At one extreme, the distribution of influence f or reaching a specific objective remained stable despite changes in work pa rameters. In contrast, another pattern involved a high dependence between a specific work profile and the optimization of performance, with changes in each work parameter leading to quite different decisions about whether to increase, decrease, or maintain influence.