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Resolution often needs to be imposed from above.
A third type of communication problem at firms operating a matrix structure is that of corporate culture clash. In the case of Spectrum, the regional head office may wish to impose upon the different product functions the head office corporate culture. Each of the functional firms, however, may have its own culture and may find that it benefits from certain cultural differences. These differences, however, can cause communication problems and discord.
Within the multidivisional structure, one type of communication that can occur is that the company only shares some types of information well, but not others. When Apple reorganized into a multidivisional structure, some groups communicated very well, but ultimately the results did not generate any congruencies or economies of scale advantages -- the wrong people were communicating about the wrong things (Grant, 2002).
Another form of communication problem that can occur with a cooperative multidivisional structure is that some managers may feel that there is an inherent competition between the units. They may adopt tactics more in line with a competitive multidivisional structure, failing to cooperate and instead causing discord within the company.
A third form of communication problem can be with respect to the imposition of corporate-wide initiatives. Common examples are with respect to ethics, corporate social responsibility and governance. It is to the company's advantage to diffuse its strategies with regards to these types of areas through the entire company. However, each division within the multidivisional structure may have insufficient linkages with head office. Accustomed to high degrees of independence and cooperation only on mutually beneficial issues, the divisions may balk at the imposition of corporate-wide initiatives.
4. For the matrix structure at Spectrum, a high degree of centralization would be most effective. The matrix structure can be difficult to implement, and at Spectrum strong linkages are required to bring the different units together. The benefits of the matrix structure at Spectrum will include the sharing of common knowledge,...
The benefits of allowing substantial freedom for the geographic organizations would be limited -- they would be better to coordinate many issues on a national basis.
The multidivisional structure should be implemented with a medium degree of centralization. Each division within Spectrum can operate with a reasonable degree of independence, but there are significant benefits that can accrue from having a moderate amount of corporate control.
Situations like that with Apple illustrate some of the communications pitfalls if the degree of centralization is low. The company may establish multiple linkages, but the functional managers involved may not have the strategic mindset required to fully leverage the outputs of those linkages to their maximum potential. Apple's products at the time had many similarities, for example, but were incompatible. Stronger centralization would have allowed managers at head office to realize the benefits of their linkages and push towards achieving those.
The cooperative multidivisional structure, however, does not require a strong degree of centralization. The firms benefit from their independence, which creates greater organizational knowledge and more creative solution development. Too much centralization would stifle these processes and reduce the effectiveness of the structure. A cooperative multidivisional structure is focused on leveraging the best in the divisions, and that requires them to have the freedom to find their own best solutions.
Works Cited:
Kerzner, H. (2009). Project management: A systems approach to planning, scheduling and controlling. Wiley p. 109
Hoskisson, R. (2008). Strategic management -- concepts and cases: Competitiveness and Globalization. Cengage, p. 318
Grant, R. (2002). Contemporary strategy analysis: Concepts, techniques, applications. Wiley. p.207
Works Cited:
Kerzner, H. (2009). Project management: A systems approach to planning, scheduling and controlling. Wiley p. 109
Hoskisson, R. (2008). Strategic management -- concepts and cases: Competitiveness and Globalization. Cengage, p. 318
Grant, R. (2002). Contemporary strategy analysis: Concepts, techniques, applications. Wiley. p.207
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