7.2 Contemporary Structures
3 min read•june 18, 2024
Matrix structures blend functional and divisional approaches, allowing employees to report to multiple managers. This setup enhances resource allocation, cross-functional teamwork, and adaptability to market demands. However, it can lead to role confusion and communication challenges.
Committees bring together diverse expertise to tackle specific tasks, fostering collaboration and varied perspectives. Emerging structures like network organizations and offer innovative alternatives to traditional hierarchies, prioritizing flexibility and decentralized decision-making in today's dynamic business landscape.
Organizational Structures
Matrix structure in organizational design
Top images from around the web for Matrix structure in organizational design
Creating an Organizational Structure – Mastering Strategic Management – 1st Canadian Edition View original
Is this image relevant?
Authority and Accountability | Human Resources Management View original
Is this image relevant?
Design Organizacional - Guia Rápido View original
Is this image relevant?
Creating an Organizational Structure – Mastering Strategic Management – 1st Canadian Edition View original
Is this image relevant?
Authority and Accountability | Human Resources Management View original
Is this image relevant?
1 of 3
Top images from around the web for Matrix structure in organizational design
Creating an Organizational Structure – Mastering Strategic Management – 1st Canadian Edition View original
Is this image relevant?
Authority and Accountability | Human Resources Management View original
Is this image relevant?
Design Organizacional - Guia Rápido View original
Is this image relevant?
Creating an Organizational Structure – Mastering Strategic Management – 1st Canadian Edition View original
Is this image relevant?
Authority and Accountability | Human Resources Management View original
Is this image relevant?
1 of 3
- Combines functional and divisional structures where employees report to both a functional manager and a project or product manager
- Enables efficient resource allocation and utilization by sharing resources and expertise across projects or products (marketing, engineering, finance)
- Promotes and knowledge sharing facilitating innovation and problem-solving
- Enhances flexibility and adaptability to changing project or product needs allowing quick response to market demands
- Facilitates employee skill development through exposure to diverse projects and teams expanding their knowledge and capabilities
- Improves decision-making by incorporating multiple perspectives from different functional areas (sales, R&D, operations)
- Supports by allowing quick reallocation of resources to meet changing priorities
Challenges of matrix implementation
- lines can lead to and conflict as employees may face competing demands from functional and project managers
- Requires effective communication channels and protocols to manage increased complexity in coordination and information flow
- Power struggles and political issues may arise between functional and project managers competing for resources and influence
- Increases overhead costs due to additional management positions needed to oversee the
- Reduced accountability and ownership of projects or products as responsibility is shared among multiple managers
- Can be challenging to implement with due to communication and coordination complexities
Committee structure vs other structures
- Consists of groups of individuals assigned to work on specific tasks or projects drawing members from different functional areas or departments (marketing, finance, HR)
- Can be permanent or temporary depending on the nature of the task (annual budget committee vs new product development committee)
- Encourages and problem-solving leveraging diverse expertise and perspectives from committee members
- Promotes collaboration and consensus-building across functional boundaries suitable for addressing complex issues that require input from multiple stakeholders
- Decision-making process can be slow and time-consuming requiring coordination and scheduling of meetings
- Lacks clear authority and accountability as committee members may not have the power to implement decisions and responsibility for outcomes is diffused
- Introduces potential for and conformity where dominant personalities influence the committee's direction and dissenting opinions are suppressed
- Differs from which keeps expertise siloed and focused on specific products or markets
- Can provide a means for employee participation in flat organizations but may introduce additional layers of decision-making compared to pure flat structures
Emerging Organizational Structures
- : Relies on external partnerships and collaborations to perform various business functions, allowing for flexibility and access to specialized expertise
- : Highly flexible and adaptive structure that forms temporary teams to address specific problems or opportunities, often seen in innovative industries
- Holacracy: Decentralized management approach that distributes authority and decision-making throughout self-organizing teams, eliminating traditional hierarchies
- : Emphasizes adaptability, open communication, and minimal formalization, suitable for dynamic environments (as opposed to mechanistic structures)
- : Groups of employees given significant autonomy to manage their own work processes and decision-making, often used within larger organizational structures
Key Terms to Review (21)
Adhocracy: Adhocracy is a flexible, adaptable, and decentralized organizational structure that is designed to quickly respond to changing market conditions and customer needs. It is characterized by a lack of formal hierarchy, emphasis on teamwork, and a focus on innovation and problem-solving.
Committee structure: A committee structure within an organization involves groups of individuals appointed to perform specific tasks or address certain areas of concern. These committees can be permanent or temporary, depending on the nature of the tasks they are designed to accomplish.
Committee Structure: A committee structure is a formal organizational arrangement where specific tasks, responsibilities, and decision-making authority are delegated to a group of individuals, typically within a larger organization. These committees are established to provide specialized expertise, diverse perspectives, and collaborative problem-solving to address complex issues or achieve specific goals.
Cross-Functional Collaboration: Cross-functional collaboration refers to the process of multiple teams or departments within an organization working together towards a common goal. It involves the integration of diverse expertise, perspectives, and resources to tackle complex challenges more effectively.
Divisional Structure: A divisional structure is an organizational structure where the company is divided into semi-autonomous divisions, each with its own functional departments and resources. These divisions are typically based on product lines, geographic regions, or customer segments, allowing the organization to be more responsive to the unique needs of each market or product.
Dual reporting: Dual reporting refers to a structure where an employee reports to two different managers or supervisors, typically involving both functional and project-based roles. This system is often utilized in organizations that aim to improve flexibility and efficiency by leveraging the skills of their employees across multiple teams or projects. It can lead to enhanced communication and collaboration, but also presents challenges in terms of clarity and accountability.
Flat Structure: A flat organizational structure is characterized by minimal layers of management and a decentralized decision-making process, where authority and responsibilities are distributed more evenly across the organization. This structure aims to promote agility, collaboration, and empowerment among employees.
Functional Structure: A functional structure is an organizational design that groups employees based on their specialized skills, knowledge, and tasks performed. It is a common approach to structuring organizations that focuses on efficiency and specialization within distinct functional areas.
Groupthink: Groupthink is a psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome. It is characterized by a reduced ability to think critically and evaluate alternatives, often leading to poor decision-making and a lack of creativity.
Holacracy: Holacracy is an alternative organizational structure that replaces the traditional hierarchical model with a decentralized, self-organizing system. It distributes authority and decision-making across the organization, empowering employees to take on roles and responsibilities that align with their skills and interests.
Matrix structure: A matrix structure is an organizational framework that combines two or more lines of reporting, typically combining functional and product departments. This structure allows for flexibility and dynamic team composition based on project requirements.
Matrix Structure: A matrix structure is an organizational design that combines a functional structure with a project or product structure, allowing for the efficient management of multiple, simultaneous projects or initiatives. This structure blends vertical (functional) and horizontal (project) reporting relationships, creating a grid-like framework that facilitates collaboration and resource sharing across different business units or departments.
Network Structure: Network structure refers to the arrangement and interconnectedness of various elements or nodes within an organizational framework. It describes how these components are linked and interact with one another to facilitate the flow of information, resources, and decision-making processes.
Novartis: Novartis is a global healthcare company based in Switzerland that specializes in the research, development, manufacturing, and marketing of a wide range of pharmaceutical products. It is known for its innovative approach to medicine and its adoption of contemporary organizational structures to enhance efficiency and foster innovation.
Organic Structure: Organic structure refers to the flexible and decentralized organizational design that emphasizes adaptability, communication, and employee empowerment. It contrasts with the more rigid, hierarchical structures traditionally associated with classical management theory.
Organizational Agility: Organizational agility is the ability of an organization to rapidly adapt and respond to changes in the internal and external environment. It involves the organization's capacity to quickly reconfigure its resources, processes, and strategies to capitalize on emerging opportunities or mitigate potential threats.
Participative Decision-Making: Participative decision-making is a management approach that involves employees in the decision-making process, allowing them to contribute their ideas, knowledge, and perspectives to the decision-making process. This approach aims to improve employee engagement, foster a sense of ownership, and enhance the quality of decisions made within an organization.
Role Ambiguity: Role ambiguity refers to a lack of clear and consistent information about the expectations, responsibilities, and boundaries associated with a specific job or position within an organization. This can lead to uncertainty, confusion, and difficulty in effectively carrying out one's duties.
Sandoz and Alcon: Sandoz is a global leader in generic pharmaceuticals and biosimilars, aiming to make accessible medicines more affordable and available. It operates as a division of the multinational corporation Novartis.
Self-Managed Teams: Self-managed teams are autonomous work groups that have the authority and responsibility to plan, organize, and control the processes required to deliver a product or service. These teams operate with minimal direct supervision and have the freedom to make decisions about their work without needing approval from higher levels of management.
Virtual Teams: Virtual teams are groups of individuals who work together towards a common goal, but are geographically dispersed and rely on technology to communicate and collaborate. They operate across time, space, and organizational boundaries using a variety of communication technologies.