Org Structure a Matrix Structure

Org Structure

A matrix structure has several advantages. With multiple reporting lines involved in decision-making and management, a company can function more quickly and share information better. For each company within the structure, independent policies and procedures can be set up. The company can respond better to difficulties because of the increased access to resources (Kerzner, 2009).

For Spectrum, the matrix structure should be based around geography and product. Although each company within the Spectrum family is different, they can all be broadly categorized as producers of consumer products. Therefore, significant advantages can accrue through use of a matrix structure. The companies would be one part of the matrix; the other part would be regional management offices.

The regional management offices would coordinate back office support in terms of a variety of categories, from accounting to compliance to market research. Furthermore, each geographic center can help the Spectrum head office to monitor and measure the activities of each of its constituent firms within a given area. By doing this, the knowledge within the company can be improved, and this leveraged to benefit all geographical sections and other companies within Spectrum.

1a. The cooperative form of the multidivisional structure is the most appropriate for Spectrum. The cooperative form is best suited for corporations whose sub-units do not compete directly against one another, either for customers or for organizational resources. The cooperative structure allows each to operate with relative independence, but to share information and knowledge to the benefit of each division (Hoskisson, 2008).

The firms within the Spectrum banner do not compete directly against one another, but each of them has similar target markets. They may also benefit from knowledge-sharing with respect to technology development, production management and logistics.

Spectrum appears to already have a multifunctional structure. To ensure that this structure functions in the cooperative form, links must be made at the managerial and occasionally at the functional levels. At the managerial levels, there should be open, informal communication links. There should also be regular, structured communications such as meetings or conferences that bring the managers together. Issues and challenges faced by one firm can be discussed for all firms so that knowledge will be shared. Communication links and relationships can be forged to facilitate the informal communication process.

2. I believe a cooperative multidivisional structure would be the most beneficial for Spectrum. The company primarily operates in North America, whereas many firms find that the matrix structure can be best to put to use in a multinational situation. The matrix structure is also difficult both to implement and to execute.

Spectrum's current organizational structure and the nature of its business support the simplicity of the multidivisional structure. With each company operating independently, they will be able to address specific needs within their markets and their own unique corporate cultures within the context of the Spectrum culture. Once the communications linkages are formed, the multidivisional structure will allow the companies to share information and attain economies of scale where such opportunities present themselves. Unlike with the matrix structure, there will be no competitive for resources since each division is a stand-alone unit with respect to top input drivers such as human resources and capital.

3. With a matrix structure, there are several communication problems that can arise. The first one is the set of complications that can arise from having multiple competing chains of command. Employees and managers often have two supervisors and can be unsure of which one to give precedence.

Because of the multiple managers, firms with a matrix structure can have difficulty resolving internal conflict. The matrix structure, when at its best, is an effective way to address problems because resources can be marshaled quickly. Resource competition can lead to internal conflict, however. This internal conflict can be difficult to resolve as the competing actors in a matrix system build negativity around each other and their conflict. 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, building into systems and processes economies of scale, all while allowing regions to implement their own flexible policies.