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Use of Matrix in Business

A matrix is a two-dimensional arrangement of numbers in rows and columns enclosed in brackets. Matrices are used to describe linear equations, track constants of linear transformations, and record data with multiple limits. They can be added, multiplied, and decomposed, making them a key concept in linear algebra. Matrices have numerous applications in fields like economics, engineering, and statistics. Matrix structures are used in business for organizational structures and decision making. A matrix structure combines traditional departments with project teams, where individuals work across teams and within their own function. For example, a new product team may include specialists from different departments. Matrix structures can improve communication, allow skills to be used across contexts, and encourage idea sharing across departments.

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Anirban Roy
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4K views4 pages

Use of Matrix in Business

A matrix is a two-dimensional arrangement of numbers in rows and columns enclosed in brackets. Matrices are used to describe linear equations, track constants of linear transformations, and record data with multiple limits. They can be added, multiplied, and decomposed, making them a key concept in linear algebra. Matrices have numerous applications in fields like economics, engineering, and statistics. Matrix structures are used in business for organizational structures and decision making. A matrix structure combines traditional departments with project teams, where individuals work across teams and within their own function. For example, a new product team may include specialists from different departments. Matrix structures can improve communication, allow skills to be used across contexts, and encourage idea sharing across departments.

Uploaded by

Anirban Roy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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What is matrix?

A matrix is a two-dimensional arrangement of numbers in rows and


columns enclosed by a pair of square brackets ([ ]).
Matrices are used to describe linear equations, keep track of the
constants of linear transformations and to record data that depend on
multiple limits. They can be added, multiplied, and decomposed in
various ways, which also makes them a key concept in the field of linear
algebra. The subject of matrices has been researched and expanded by
the works of many mathematicians, who have found plentiful
applications of matrices in numerous disciplines such as Economics,
Business, Engineering, Statistics and various other sciences.

Real life applications of Matrix in business


Matrices are one of the most frequently used tools in business. They
are used in linear programming to determine the most lucrative
concoction of ingredients in a product. They are also used widely in the
decision-making process.
A decision matrix can help you not only make composite decisions, but
also arrange tasks, solve problems and craft arguments to secure a
decision you've already made. It is an ideal decision-making tool if you
are debating between a few comparable solutions that each have
multiple quantitative measures.

Matrix structures are also used to create organizational structures in a


very precise and advanced manner. A matrix type of
organizational structure combines the traditional departments seen in
functional structures with project teams. In a matrix structure,
individuals work across teams and projects as well as within their own
department or function. For example, a project or task team
established to develop a new product might include engineers and
design specialists as well as those with marketing, financial, personnel
and production skills. These teams can be temporary or permanent
depending on the tasks they are asked to complete. Each team member
can find himself/herself with two managers - their normal functional
manager as well as the team leader of the project.

An example of a matrix structure is illustrated below:

Matrix structures have advantages

Advantages

 Can help to break down traditional department barriers,


improving communication across the entire organization
 Can allow individuals to use particular skills within a variety of
contexts
 Avoid the need for several departments to meet regularly, so
reducing costs and improving coordination
 Likely to result in greater motivation amongst the team members
 Encourages cross-fertilization of ideas across departments – e.g.
helping to share good practice and ideas
 A good way of sharing resources across departments – which can
make a project more cost-effective

Worked Example: Business Applications of Matrices


Example:
The governing board for a Fortune 500 company is expected to collect
votes of managers within the company on a potential new policy
change in the way it manages clients. It needs at least 250 votes to pass
the policy. From past experience, 30% of technical managers and 60%
of administrative managers voted in favor of a similar policy. In total,
there are 715 managers across the company. What is the least number
of votes from each group necessary to pass the policy?
Solution:
We want to know if the combination of technical and administrative
managerial votes will favor the new policy. How many of each will there
be? Well, there will be ‘x’ technical votes and ‘y’ administrative votes
made. So, let ‘x’ = total #’of technical votes; ‘y’ = total # of
administrative votes
We know or assume:
715 votes will be made
30% of the technical managers along with 60% of the administrative
managers must total up to 250.
Mathematically,
x + y = 715 Total votes will be made
.30x + .60y = 250 Votes in favor of policy needed
Solving, we get
y = 715 – x
.30x + .60(715 – x) = 250
–.3x + 429 = 250
x ≈ 596.7
x ≈ 597
597 +y = 715
y = 118

Thus, we expect that there are 597 technical managers and 118
administrative managers, based on our assumptions. This is not
important, however. We are primarily concerned with how many from
each of these two groups will vote. That is, 30% of 597 means about
179 technical managers’ votes are needed and 60% of 118 means that
about 71 administrative managers’ votes are needed.

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