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13.03.2023 | KPMG Law Insights

Podcast series “KPMG Law on air”: Matrix organizations – opportunities and risks of corporate transformation

Suddenly, what seemed unthinkable just a few years ago is possible: employees no longer come to work at corporate headquarters, but are hired wherever skilled workers are found. Often also at other companies in the Group or even abroad. This creates matrix organizations with multiple reporting lines. Digitization makes this possible; Corona has additionally accelerated the process.


A solid legal framework is part of a matrix

But matrix organizations also harbor many legal and tax risks. Dr. Martin Trayer, partner and specialist attorney for labor law, therefore recommends: The matrix organization needs a solid legal framework and clear rules.

In the podcast, Dr. Martin Trayer addresses the labor law challenges in particular and talks about how companies should approach the transformation to make the matrix a success.


The core topics of the podcast are:

  • From minute 1:12: What is meant by matrix organizations and what are some examples?
  • From minute 2:32: Matrix organizations that cross national and/or corporate borders are emerging as a new trend.
  • From minute 3:31: The pandemic has accelerated development and shown that virtual work is possible.
  • From minute 4:31: Behind the change in organization should be a regulatory framework that takes into account the various jurisdictions involved.
  • From minute 6:28: From the perspective of labor law, the following points must be observed, among others: Compliance with the Employee Transfer Act, limits to the transfer of instruction rights, works council participation rights.
  • From minute 8:44: How is the matrix implemented technically and, in particular, how can instruction rights be transferred to superiors in other companies?
  • From minute 9:44: The matrix also raises questions of corporate law, especially for the governing bodies involved.
  • From minute 10:43: A matrix structure can also be introduced only within the company for individual departments.
  • From minute 11:50: Tax issues such as the change of economic employer or permanent establishments abroad can be addressed through guardrails and clear jurisdictional boundaries.
  • From minute 13:27: When exchanging data within the Group, attention must be paid to data protection. Existing data protection rules must be adapted.
  • From minute 14:40: Summary and conclusion

All “KPMG Law on air” episodes can be found here.

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Dr. Martin Trayer


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