Reminders
C & C Grocery case will be in your mail files by
the end of the week.
University Art Museum revisions are due by
2:00 PM on Monday.
Aquarius Advertising case is due by 2:00 PM on
Monday. Think carefully about possible
structural changes. Don’t jump to conclusions
about appropriate structures simply as a
function of what you have read most recently.
Review of last week
What is structure?
What influences the structure chosen?
What are the options for structuring work?
– Functional Structures
– Task forces and task teams for coordination
– Divisional Structures
What are the characteristics, advantages
and disadvantages of functional/divisional
structures?
Questions?
Understanding and Managing
Organizational Structure: B
BA 152
From last week’s discussion
Functional structures work well when the
environment demands efficiency.
Divisional structures work well when the
environment demands responsiveness.
But what happens if . . .
The environment demands both
efficiency and responsiveness?
Other approaches to putting
organizations together
Hybrid Structures
Matrix Structures
Horizontal/Team Structures
Network/Network/Virtual Structures
A Hybrid Organization
President
International
Domestic Sales Sales
Vice-President Vice-President Vice-President Vice-President
Manufacturing Engineering Research & Dev. Finance & Acct.
Director
Manufacturing
Domestic
Manufacturing
International
Manufacturing
Building a Hybrid Organization
President
Finance &
Personnel Accounting
Vice-President Vice-President Vice-President Vice-President
Eastern Region Southern Region Northern Region Western Region
Director Same as East Same as East Same as East
R&D
Director
Manufacturing
Director
Marketing
A Matrix Organization
CEO
Prod. Director MFG ENG MKT F&A
Prod. A
Prod. B
Prod. C
Characteristics of Matrix
Structures
1. Individuals or work units can have a
combination of functional and divisional
assignments.
2. Methods and procedures will change by
assignment.
Characteristics of Matrix
Structures
3. Shared control and decision making
between functional and divisional leaders
4. Dual reporting relationships and balance of
power needed for success
Characteristics of Matrix
Structures
5. Competitive in dynamic environments
requiring responsiveness and efficiency
A Matrix Organization-NASA
CEO
Program Director Propulsion Engineer. Flight Cont. Operations
Shuttle
Mars
Space
Station
A Matrix Organization
CEO
Program Director MFG ENG MKT F&A
Prog. A
Prog. B
Prog. C
A Matrix Organization
CEO
Country Director MFG ENG MKT F&A
USA
Canada
Mexico
Kenan-Flagler Business School
Matrix Structure
DEAN
Management Accounting Finance Marketing Operations
UDG DB
MBA DB
MAC
PhD DB
Exec. Ed. DB
Can you imagine a 3-D
Matrix Organization?
Function
Country
Product
Matrix Structures
Advantages & Disadvantages
Advantages Disadvantages
– Can meet dual – Lose some economies
environmental demands of scale
– Flexible use of resources – Difficult to maintain
– Relatively quick reaction balance of power
times – Having two bosses can
– Good training for both be stressful
generalists and specialists – Conflict resolution can be
time-consuming
– Requires talented
management
Matrix Structure
What happens when the economy goes bad?
CEO
MFG ENG MKT F&A
Matrix Structure
What happens when the economy looks good?
CEO
Project. Director
Proj. A
Proj. B
Proj. C
Horizontal/Team Structures
Process Product
Top Management Team
Research Testing
Owner Planning
NEW PRODUCT DEVELOPMENT
Process Identification Execution Integration
Owner
MERGERS & ACQUISTIONS
Process Material
Purchasing Distribution
Owner Flow
SUPPLY CHAIN MANAGEMENT
Characteristics of
Horizontal/Team Structures
1. Organized around cross-functional core
processes
2. Self-directed teams are the basis for the
design of the organization.
3. Focus must be on the “customer” of the
process.
4. Requires non-traditional organizational
culture.
Horizontal/Team Structures
Advantages
1. Rapid response to changes in customer demands
2. Focus is on delivering value to the customer.
3. Employees have a broader view of organizational
goals.
4. Promotes focus on teamwork/collaboration
5. Improves quality of work-life for employees
Horizontal/Team Structures
Disadvantages
1. Identifying core processes can be difficult.
2. Requires major changes in most organizational
systems and culture.
3. Requires managers to give up power/authority.
4. Requires significant training for employees.
5. Can limit in-depth skill development
Kenan-Flagler Business School
Horizontal/Team Structure
Process
Admissions Internships Placement
Owner
ADMISSIONS & PLACEMENT
DEAN
Process BSBA MBA PHD
Owner
CURRICULUM DEVELOPMENT
Process Research Service Teaching
Owner Support Support Support
FACULTY DEVELOPMENT
A Modular/Network/Virtual/ Structure
Designers Producers
Corporate Headquarters
Suppliers Distributors
Kenan-Flagler Business School
Modular/Network/Virtual Structure
Placement Admissions
DEAN’S OFFICE
Facilities Faculty
A Modular/Network/Virtual Structure:
Advantages
1. Small organizations can obtain talent and
assistance from anywhere.
2. Organization can “ramp up” without huge
investments in facilities.
3. Increases organization flexibility and
responsiveness.
4. Reduces administrative overhead costs.
A Modular/Network/Virtual/ Structure:
Disadvantages
Little hands-on control of “partners”
Expenses of establishing monitoring systems
Reduced partner-employee loyalty
Weakened corporate culture, if you can talk
about a corporate culture at all.
Is It the Wrong Structure?
How can you tell?
1) If we replaced the people, would the
problems remain?
2) Is the firm inefficient or inflexible?
3) Are decisions made too late?
4) Are decisions of poor quality?
5) Is there too much conflict between units?
Next Time:
Aquarius Advertising Agency