In a matrix organizational structure, employees are grouped by which two criteria?

In a matrix organizational structure, employees are typically grouped by function and product. This structure allows for a more dynamic organization where individuals can benefit from multiple perspectives and expertise. By organizing by function, teams can focus on specific roles such as marketing, finance, or operations, ensuring that specialized knowledge is utilized effectively. When paired with product-based grouping, organizations can respond more flexibly to market demands. This dual grouping allows for enhanced collaboration among different functions while still maintaining a clear focus on specific products or projects.

This approach promotes communication and coordination between various functional areas and product lines, ultimately leading to improved innovation and responsiveness to changing market conditions. Moreover, employees may report to both a functional manager and a product manager, facilitating a balance between resource efficiency and product focus.