This design is created by super-imposing a product—based form of departmentalisation on functional departmentalisation. It allows an organization to retain the efficiency of functional departments and gain the advantages of product departmentalisation. The rationale for a matrix organization is quite simple. Functional departments allow the firm to develop and retain unified and competent functional specialists, whereas the product design directs special and focused attention to individual products or product groups e.g. when a firm wants to create a new product, specialists from each of the functional departments are brought together and formed into a team under the direction of the project manager. A matrix design is generally likely to be more applicable under the following situations:
· when the firm has diverse set of products and a complex environment
· when there is a great deal of information to be processed (when the environment is highly uncertain and the company has broad product lines) the firm is confronted with a lot of information and the matrix allows managers to categorize this information systematically and direct it to the key individuals.
· when there is pressure for shared resources—a company may need eight product groups but only have the money to hire only four marketing specialists. The matrix provides a convenient way for the eight groups to share the four specialists.
Advantages of the Matrix
(a) It is very flexible. Teams can be created, changed and dissolved with major disruption.
(b) Often it improves motivation. The team has so much responsibility. Its members are likely to be committed to its success.
(c) It promotes the development of human resources. Managers get a wide range of experience and as a result they can take increasingly important roles in the firm.
(d) It does enhance cooperation. Since there is so much interdependence, it is important that members will work together.
(e) It facilitates managerial planning because so much of the day to day operation of the organization is delegated to the teams top managers who have considerably more time to concentrate on planning.
(a) Potential conflict created by having a number of bosses. If for example a marketing specialist is a part of three project groups and still has work to do within his functional role, he may not be able to satisfy all of his bosses when he is pressured for time.
(b) Coordination is difficult in a matrix. Two or more groups may need the same information and each could end up paying a market research firm to get the information without realizing the other has already done the same.
(c) The group work tends to take longer than the individual work. Each manager in a matrix is likely to spend considerable amounts of time meeting and talking
with other managers and putting one set of activities aside and picking up others, thus he may have less time to devote to task accomplishment.
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