Organizational structures, such as traditional organizational hierarchies, often focus too much on departmental objectives. This can sometimes be to the detriment of the objectives of the enterprise itself.

The matrix organization can solve this problem by assigning specific tasks for a specific purpose. It gives rise to units with different tasks that can make decisions to fulfill the tasks without, for example, having to turn to the management of the enterprise.

Using the matrix tool, you can create different types of matrix organizations.

The objective of this organizational type is to use project groups to process new and fixed-term tasks for more than one area. Projects integrate employees from different areas within the enterprise for all, or part, of the time.

Unlike team work, project work describes alternating groups of employees who work together in special areas. The project employees do not have to originate from a single group of employees.

The employees of an organizational unit are subordinate to the line manager with regard to disciplinary matters, and to the project manager with regard to subject matter.

When project reporting is carried out, the most important question is who belongs to a project. An employee can belong in part to a project. His or her position does not, therefore, have to be assigned 100% to a project.

A team organization is used to carry out more complex projects at an enterprise. It includes several areas, and requires a wide range of specialized knowledge.

A team is characterized by far-reaching task orientation, and autonomy with regard to the methods used to fulfill the task.

Teams exist for a fixed term. When assigned to a team, employees are released from their staff and line tasks. Their competencies, tasks, and assignment within the organization are based purely on the requirements of the team.

Team work often constitutes a considerable part of a work group. Unlike project work, team work is characterized by a continuous exchange of information, being the main responsibility of each individual employee.

When team reporting is carried out, all employees and positions assigned to a team are evaluated. A position is assigned 100% to just one team. The employees can originate from different areas, so they are assigned to different organizational units.

Matrix organizations are often used in production environments, and enterprises that manufacture and distribute a variety of products.

An example of this type of matrix organization is a car manufacturer that is divided into the sales and distribution, financial accounting, and production departments. The company manufactures a variety of products, namely Model 1, Model 2, Model 3, and so on.

In a matrix organization, a Salesperson position reports to the Sales and Distribution department, and to the Model 1 group or department.

When product reporting is carried out, all of the Salesperson positions are evaluated, for example, that are assigned to Model 1, Model 2, Model 3, and so on.

These matrix organizations are not restricted to Organizational Management objects only. For example, organizational units such as the Executive Board, Sales and Distribution, and Development can be placed on the vertical level. At the same time, legally autonomous units such as SAP Holding, SAP Germany, and SAP USA can be placed on the horizontal level. Existing assignments between these dimensions are then highlighted at the points of intersection within the matrix, and the relationship period is displayed.

The following matrix organization can be used, for example, to simplify applicant selection. You can use a matrix in which:

• Applicant groups are created using applicants
• Appraisal teams are created using employees
• Applicant groups are assigned to appraisal teams

The Simple Maintenance function in Organizational Management enables you to process not only hierarchical, but also matrix and other complex organizational structures.

When you maintain a matrix, these are the activities you perform:

• Customizing matrix types
• Accessing matrix maintenance
• Matrix processing

• Matrix view processing
• Structure view processing

• Maintaining the structure