You would think that people generally agree on what the benefits and costs of matrix organizations are, but this blog posts illustrates pretty well some of the contradictory ideas out there about the issue.
The matrix structure has been both praised and harshly criticized (e.g. Peters, 1979; Ford and Randolph, 1992; Galbraith, 2008). This post nicely illustrates some of the opposing forces operating inside organizations where people report to multiple bosses. Let's take some of the advantages and disadvantages of the matrix structure listed in that post and put them together.
Sharing valuable resources and knowledge across units is easier, but if the resource is scarce then there may be competition for it leading to hostility.
The matrix allows employees to communicate better and creates good working and cooperative environment, but workload tends to be high and employees are often exhausted.
Employees tend to be loyal and hence the efficiency of matrix is higher, but matrix requires more managers and resources, making it more expensive.
Just as Knight (1976) remarked, upon reviewing the literature on matrix organizations, many of the dissadvantages are produced by the same factors as the advantages, only with the opposite sign!
Ford RC, Randolph WA. 1992. Cross-functional structures: a review and integration of matrix organization and project management. Journal of Management 18(2): 267–294.
Galbraith JR. 2008. Designing Matrix Organizations That Actually Work: How IBM, Procter & Gamble and Others Design for Success. John Wiley & Sons: New York.
Knight K. 1976. Matrix organization: a review. Journal of Management Studies 13(2): 111–130.
Peters TJ. 1979. Beyond the matrix organization. Business Horizons 22(5): 15-27.