In a matrix structure, a person in a particular position reports to a hierarchical superior (also termed a "solid line"), but has a dotted line relationship to one or more other members of the organisation, which are generally cross-functional relationships. The "dotted line" relationship in this case would be the Global Head of Group, which means that the CEO liaises with this person, but does not report to him as a hierarchical superior.

The terms "solid line" and "dotted line" come from the organisational chart, which in the case of a matrix organisation, portrays hierarchical relationships with a solid line and cross-functional matrix relationships with a dotted line.

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Often in matrix management there is a distinction between the solid line manager and dotted line manager. This is to make it easier for the employee to understand the reporting structure. The solid line manager is typically the functional manager and will not change. In the purchasing example, the solid line manager is the purchasing manager. The solid line manager handles day-to-day issues such as vacation requests and, in most cases, delivers performance appraisals.

The dotted line manager may be a project manager who is coordinating many different departments on a specific project. The employee would report to the dotted line manager for issues regarding that project only. Once the project is complete, the project manager is assigned to a new project that may or may not include the same team of employees as before. The employee may also move on to a new project run by a different manager. In that case, the new project manager would replace the previous dotted line manager while the solid line manager remains the same.