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Two alternatives to a matrix organization (video)

by Nicolay Worren on May 31st, 2012

A few weeks ago, I asked some managers that I know about the topics they would like to read about on this blog. Several responded that they were curious about how to better design and manage matrix organizations. This is not a new topic – but it seems to be one that still concerns managers in many large organizations.

The first question I thought we should discuss is what options are available. So in this video, I briefly describe the matrix structure and compare it with two more recent alternatives.

You will find a much more in-depth discussion in my book where I explain how these three organizational models differ in terms of goals and KPIs, reporting structure, resource allocation, and so on.

The organizational models that I discuss have been described before by well known authors (Davis & Lawrence, Galbraith, Ackoff); but as far as I know my book is the first that compares these different models to each other and proposes some design rules to guide the selection of the right model given different circumstances.

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3 Comments
  1. Nicolay
    As you point out Matrix designs were often the result of fuzzy thinking and definitions. Still we have no common definition of a manager or a reporting relationship. The last option of deciding unit goals and managerial accountability is actually Elliott Jaques’s approach…and Ackoff’s solution is consistent with Jaques except that Jaques is much clearer about vertical and lateral accountabilities.
    Also I think your presentations would be clearer if you used levels of work complexity in your examples and said cross-over manager at IV instead of perhaps decided in a leadership role which I find quite fuzzy.

  2. Thanks Nicolay,

    Your illustration with the post-its shows how difficult it is to envisage these complex interrelationships. I tend to distinguish between matrix structure (multiple reporting – which is a choice) and matrix working (complex cross functional and “horizontal work” – which is inevitable in large complex organisations).

    Once you have multiple reporting lines then, as you say, complex issues and trade-offs are inevitably pushed down into the organisation – the alternative is escalation and delay.

    It is actually the networks and the ways people work together, that evolve in this environment that bring success or failure rather than the formal structure.

  3. Nicolay Worren permalink

    Thanks for your comments.

    Kevan – I agree that once an organization has chosen a matrix reporting structure, one has to do one’s best to manage it. But I think that most organizations could achieve significant improvement – and reduce stress among employees – by selecting designs that are simpler. In most cases the matrix is unnecessary given what we know today about organization design.

    Ken – I agree that Jaques probably is the author that has the greatest clarity with regards to definitions of “manager” and “reporting relationship”. I also agree that the presentation could have been improved by using levels of work complexity, but there’s also a chance of confusing this concept with the concept of (organizational) complexity that is alluded to here. In my book I describe both.

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