Matrix management for Project Teams

Reading Kerzner recently on project management maturity, an important principle was reinforced - effectiveness of the organisation in matrix management of project team members is a requirement for level 3 maturity. In this context, matrix management usually refers to dual management of individuals making up the project team. The first, traditional management line is the functional one - e.g. engineering, procurement, design, accounting. The second is the project organisation under which the project manager directs the resources for the effective execution of the project to deliver the product - and sometimes appears under the title 'product management'.
Since a project is, by definition, temporary in nature it can be difficult to visualise a permanent matrix organisation since only the functional management dimension is permanent. Worse, there may be multiple projects on which team members would work so there could be multiple reporting lines for a team member. If you add in recent trends towards individuals having more than one functional responsibility the situation can be terribly complicated.
Looking for some additional insight into the issue, I came across this paper from the Journal of Management. It describes the continuum of matrix management styles and discusses the influences at work. One really important point is that the success of any level of matrix organisation depends on the quality of communication across the different management dimensions. Of course - aren't we always crying out for effective communication? Well, yes. But this is more - it's not only sharing information, it also implies the effective receipt and approeciation of the communicated information. There's more gold in the article and it deserves reading in full.
Journal of Management: Cross-functional structures: a review and integration of matrix organization and project management