Correct Answer: Statement 1 is true, and Statement 2 is false.

Solution : The correct answer is (a) Statement 1 is true, and Statement 2 is false.

Statement 1 is true. A matrix organizational structure is designed to facilitate collaboration and communication across different functional areas within an organization. Employees often work in cross-functional teams, promoting collaboration and the integration of diverse perspectives.

Statement 2 is false. A matrix organizational structure typically involves a flatter hierarchy compared to traditional hierarchical structures. Employees may have dual reporting relationships (functional and project/product-based), but this doesn't inherently mean multiple layers of management. The focus is on collaboration and efficient communication rather than excessive layers of management.