7.2 Contemporary Structures

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 holacracy 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 cross-functional collaboration 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 organizational agility by allowing quick reallocation of resources to meet changing priorities

Challenges of matrix implementation

• Dual reporting lines can lead to role ambiguity 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 matrix structure
• Reduced accountability and ownership of projects or products as responsibility is shared among multiple managers
• Can be challenging to implement with virtual teams 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 participative decision-making 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 groupthink and conformity where dominant personalities influence the committee's direction and dissenting opinions are suppressed
• Differs from functional structure which keeps expertise siloed and divisional structure 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

• Network structure: Relies on external partnerships and collaborations to perform various business functions, allowing for flexibility and access to specialized expertise
• Adhocracy: 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
• Organic structure: Emphasizes adaptability, open communication, and minimal formalization, suitable for dynamic environments (as opposed to mechanistic structures)
• Self-managed teams: Groups of employees given significant autonomy to manage their own work processes and decision-making, often used within larger organizational structures