What characterizes a matrix structure in an organization?

A matrix structure in an organization is characterized by a dual reporting relationship, where employees are grouped both by function and by product teams. This allows for greater flexibility and responsiveness to changing business needs. Employees typically report to two managers: one for their functional area (such as marketing or engineering) and another for a specific project or product team. This structure fosters collaboration across different departments and encourages the sharing of resources and expertise, making it adaptable to various projects.

In contrast to other options, grouping employees solely by functions does not provide the cross-functional collaboration aspect that a matrix structure promotes. Centralized decision-making contradicts the decentralized and collaborative nature of matrix organizations, where teams often have more autonomy to make decisions relevant to their projects. Lastly, the notion of employees working independently without team collaboration fails to reflect the essence of a matrix structure, which thrives on teamwork and interdependence across various functions and projects.