This is where departments contribute few workers who are relocated far away from the office to the site where the project is taking place until it is completed. It is common in NGO’s and project related organizations.

The project manager coordinates the project and is the accounting officer and reports directly to the CEO. The workers working for the project report to their departmental heads. The project manager provides the technical expertise and ensures the success of the project.

Advantages of matrix strucure

1. It reduces bureaucracy in the organization where procedures are not strictly followed
2. It leads to proper utilization of human resources.
3. There is better control of the project – the project is controlled well.
4. It clarifies who is responsible for the success of the project.
5. There is short project development time.
6. It aids in the development of managers. A training ground for managers.
7. It develops employees’ skills by allowing them to handle different projects with different projects with different challenges. It acts like job rotation.
8. Workers are fully motivated because of the fringe benefits they derive.
9. Employees are able to identify with the end products.
10. The top echelons are left free to plan and strategize for they are not involved directly in the running of the project.
11. It enhances teamwork and cooperation. A bonding develops.

Disadvantages of Matrix structure

1. The functional managers may neglect their duties and let the project manager do everything.
2. Too much shifting of staff from project to project may hinder training of new employees. (You do not abandon or change a winning team).
3. There is conflict because the workers at the site are at loss on whom to pay their allegiance between the project manager and their functional heads.
4. The staff morale is affected after completion of the project because they are socially re-arranged e.g. they have to move far from the newly acquired friends at the end of the project.
5. The structure only works only where interpersonal relationships are well developed.

Customer based structures
This is a structure prepared with a particular client in mind. It is common in service industry e.g. Hospitals, hotels and automobile firms

Disadvantages of customer based structure

1. If the customer rejects a product because of its quality, the entire organization is threatened.
2. It is costly to implement because specilalised departments have to be set up
3. It requires only specialized and skilled workers

Advantages of customer based structure
1. It offers personalized services.
2. They satisfy the customer’s needs.
3. It is easy to get feedback which enables an organization to make necessary changes.


It is the transferring of the authority from supervisors to the subordinates. It is where power is dispersed and shared.

Advantages of decentralization

1. It speeds up the decision making.
2. The echelons (top management) are left free to plan and strategize.
3. It helps in development of professional managers.
4. It enables for multi-skilling and development of junior staff.

Disadvantages of decentralization
1. There is lack of consistency because more people are involved in decision making.
2. Customers are not subjected to the same treatment.
3. There is misallocation of resources especially if controls are not established.
4. Senior managements must do a lot of coordination to avoid units working contrary to the organizational goals.

It is the concentration of power and authority in the hands of few people. It takes place in bureaucratic structure. (Authority is legal and given-comes with the position).
Authority – is bestowed on an individual and it’s legal. It is a right in a position to give orders and expect the orders to be obeyed.
Power – It’s the ability to influence behavior of others and it’s not given but rather it is acquired


Coercion power
This is power that is exercised by causing fear and threatening e.g. A thug having a gun.

Reward power
This is where people’s behavior are influenced through reward and incentives.

Legitimate power.
This is power that comes from one’s position e.g. DO’s, Managers e.t.c.

 Expert power
This is power that’s exercised through one’s knowledge, skills and expertise e.g. Doctors, engineers

Referent power
This is where one identifies with a person who has desirable resources, personal traits that are good or feared.

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