A matrix structure is an organizational framework that combines functional and project-based divisions. In this setup, employees report to both a functional manager and a project manager, allowing for more flexibility and collaboration across different departments. This structure is often used in large companies that handle multiple projects simultaneously. The matrix structure promotes efficient resource allocation and enhances communication among teams. However, it can also lead to confusion regarding authority and responsibilities, as employees may receive conflicting instructions from their two managers. Overall, it aims to improve responsiveness and innovation within the organization.