Thursday, June 18, 2009

How to survive and thrive in a matrix management organizational structure?

In an effort to succeed and thrive in an increasingly competitive global business environment, organizations commonly make changes to their organizational structures, making them flatter, customer-driven, and product-centered. Several organizations have implemented a matrix management approach to leverage economies of scale, increase product development capabilities, and augment customer satisfaction levels (Corporate Leadership Council [CLC], 2002). The CLC emphasizes that matrix organizations combine functional and product expertise to keep pace with short product development cycles. The CLC also indicates the strategies employed by organizations to successfully implement a matrix management reporting relationship. These include a common understanding of the company vision and strategy, formalizing reporting relationships, managing matrix issues upfront, and aligning functionally.

Additionally, the CLC identified that strong communication skills, teamwork, adaptability, and shared goal and rewards systems play a critical role for the success of matrix management.
Kochansky and Donnolo (2005) note experiences gained from organizations like GM in the use of matrix organizational structures, and offers valuable suggestions to making them more effective by including a clear definition of roles, development of key competencies such as collaboration and teamwork, the development of supervisors within the structure, and a redefinition of the company’s operational model.

Despite the benefits reported by some organizations with the use of matrix organization structures, the CLC (2002) also notes that organizations frequently abandon this organizational arrangement because of two main reasons: duplication of efforts and inefficiencies. Other important issues reported by the CLC around matrix management are the lack of accountability, and frequent conflicts over allocation of resources and division of authority.

As literature indicates, the use of a matrix organizational structure may provide important benefits to global organizations; however, its implementation requires new organizational arrangements, and increased focus on measurable results, giving up power, and the development of new competencies such as teamwork and collaboration.

References:
Corporate Leadership Council. (2002). Matrix management (CLC1UR1UD): Fact brief, Corporate Executive Board, Washington, DC.
Kochansky, J. & Donnolo, M. (2005). Enter the matrix GM: The general manager for today’s markets. Sibson Consulting. Retrieved on October 5, 2006 from:
http://www.imakenews.com/sibson/e_article000384170.cfm?x=b4k945J,b1vhTtNh,ww

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