Matrix Structures: A Practitioner’s Guide

We live in a world of growing sales complexity. Organizational structures that were once well equipped to meet business and customer needs now face the challenging task of coordinating multiple goals, decisions, and resources across geographies.

Sales executives, in response, often reorganize and make principled trade-offs between the benefits achieved by centralized and decentralized arrangements. However, each of these structural models fall short as companies are increasingly required to operate in a truly global environment, yet at the same time maintain their regional responsiveness.

While various organizational models have emerged to meet these structural challenges, the most common among these is the matrix organization, in which some form of lateral authority overlies the traditional vertical hierarchy. Sales employees are subject to dual influences, requiring coordination across functional boundaries.

Simply put, matrix structures balance two or more objectives simultaneously, such as responding to product line competition and maintaining customer nuances between geographies.

That said, like the centralized and decentralized models, matrix structures also bring potential challenges; specifically of dual reporting relationships, which result in ambiguous lines of authority, complex divisions of responsibility, power struggles, unclear reward structures, and excessive overhead costs.

In benchmarking sales structures across industries and geographies, we’ve uncovered four practices for the successful management and execution of matrix sales organizations:

Align Sales and Organizational Goals: Matrix structures require all functions and business units to align goals to ensure collaboration and not competition for scarce organizational resources. In the absence of goal alignment, employees with dual-reporting relationships often face conflicting priorities, driving cannibalization between functions and units (see how Seagate aligns organizational goals).


Formally Articulate Roles and Responsibilities: While true for any organizational structure, this is crucial in a matrix organization where employees are managed along two lines of authority creating potential for conflict of interest. The best companies find there is less room for conflict when employees have clearly defined roles and responsibilities, and are empowered to make recommendations.


Institutionalize Mutual Task Dependency: Matrix structures by design make employees across functions, geographies, and business units dependent on each other. Success often is a joint outcome, which requires coordination across different lines of authority. Companies that are able to formalize a team culture within their organizational construct are most likely to succeed here.


Encourage Open Lines of Communication: Create policies that encourage open communication at all levels of the organization. To ensure this, companies hold regular meetings in which senior management openly disseminates corporate information to employees. In addition, teams meet formally to exchange ideas and discuss progress and problems in a matrix management structure.

This list is by no means exhaustive. What are your experiences on operating in a matrix environment? What do you like and dislike about working in matrix structures?

SEC Members, to learn more on matrix structures, review the study on Managing Matrix Sales Organizations that profiles best practices on aligning sales and organizational goals, removing account ownership silos, enabling cross-functional communication, and simplifying compensation plans.