Matrix Organization
Organizational Structure
Consider the costs and benefits of Matrix structures in companies compared to traditional Hierarchical management systems.
Content
Why is organizational structure important?
Different types of organizational structure
Hierarchical organizational structure
Hierarchical organizational structure advantages and disadvantages
Matrix organizational structure
Cost and benefits of Matrix organizational structure
Key points Hierarchical vs. Matrix organizational structure
Challenges when adopting a Matrix structure
Organizational Structure
Helps improve communication, increase productivity
Provides guidance to all employees by laying out the official reporting relationships that manage the workflow of the company.
Without a formal organizational structure, employees may find it difficult to know who they officially report - Unclear exactly who has the final responsibility for what.
A company can have a clear mission, talented people, and great leaders and still not perform well because of poor organizational design.
The structure will depend on the size of the business and the type of business. The larger an organization grows, the more need there is for formal structure, defined work assignments, and clear lines of authority
Poor organizational structure :
Confusion within roles, a lack of co-ordination among functions, failure to share ideas.
E.g SONY The different divisions often had no idea about products being developed by other divisions. The Walkman was as the iPod is today. Inter-conflicts between the different divisions kept Sony from seeing the iPod potential.
Types of organizational structures
FUNCTIONAL
PRODUCT
CEO
CEO
Finance
Marketing
R&D
Finance team Marketing team R&D
Team
Product A
Product B
Product C
MATRIX
GEOGRAPHICAL
CEO
CEO
Region
Region
Marketing
Region
Countries Subsidiaries
Finance
Product A
Product B
R&D
Hierarchical organizational structure
Every employee in the organization, except
Consider the costs and benefits of Matrix structures in companies compared to traditional Hierarchical management systems.
Content
Why is organizational structure important?
Different types of organizational structure
Hierarchical organizational structure
Hierarchical organizational structure advantages and disadvantages
Matrix organizational structure
Cost and benefits of Matrix organizational structure
Key points Hierarchical vs. Matrix organizational structure
Challenges when adopting a Matrix structure
Organizational Structure
Helps improve communication, increase productivity
Provides guidance to all employees by laying out the official reporting relationships that manage the workflow of the company.
Without a formal organizational structure, employees may find it difficult to know who they officially report - Unclear exactly who has the final responsibility for what.
A company can have a clear mission, talented people, and great leaders and still not perform well because of poor organizational design.
The structure will depend on the size of the business and the type of business. The larger an organization grows, the more need there is for formal structure, defined work assignments, and clear lines of authority
Poor organizational structure :
Confusion within roles, a lack of co-ordination among functions, failure to share ideas.
E.g SONY The different divisions often had no idea about products being developed by other divisions. The Walkman was as the iPod is today. Inter-conflicts between the different divisions kept Sony from seeing the iPod potential.
Types of organizational structures
FUNCTIONAL
PRODUCT
CEO
CEO
Finance
Marketing
R&D
Finance team Marketing team R&D
Team
Product A
Product B
Product C
MATRIX
GEOGRAPHICAL
CEO
CEO
Region
Region
Marketing
Region
Countries Subsidiaries
Finance
Product A
Product B
R&D
Hierarchical organizational structure
Every employee in the organization, except
References: 8 Types of Organisational Structures, 2015: their Advantages and Disadvantages. Available at: http://www.yourarticlelibrary.com/organization/8-types-of-organisational-structures-their-advantages-and-disadvantages/22143/. Science Quarterly. Vol. 34, No. 3 (Sep., 1989), pp. 349-368.