A matrix organization is created by overlaying product-based departmentalization on lo a functional structure. A matrix design is seldom used for an entire organization and is often used for a portion of it. A matrix design allows an organization to capitalize on the advantages of both functional and product departmentalization. It has also some drawbacks such as an organization lacks a clear chain of command thereby ‘resulting into confusion about which manager lies authority over a given employee. The organization also has to devote more resources to coordination because of high levels of interdependence that result from a matrix.
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