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Challenges Executive Coaches face in working with Matrix Structures

Posted on October 6, 2010 at 7:00 AM

This paper was writtenby Lina Nangalia PCC as part of her doctoral work at XLRI, Jamshedpur.

 


Part 1: Introduction

 

The success ofany organization structure lies not only in the design but in thoughtfulimplementation; this includes not only alignment of processes and rewards butall human resource (HR) practices (Buono,2009). To accommodate the complexity of global business, many organizationshave adopted matrix structures (Galbraith,2009). The majority of the Information Technology firms operating in Indiaare designed as matrix structures. This author’s work and consulting experiencewith many IT firms in India has brought to light the many challenges thatmanagers and team members face in their day to day work within these matrixstructures. Seeking to understand the cause of these problems - organizationdesign, culture, and leadership – was the impetus for this research paper. Theobjective of this paper is to understand from literature the characteristics ofmatrix organizations, the influence of culture on the success of effectivematrix functioning, and the influence of dominant coalitions in matrix structures.

 

What is a Matrix Structure?


     Kotter & Sathe (1978)identified common problems that plagued rapid growth companies.  According to this author many IT companies inIndia share the problems listed by them. These include:

·       problems caused by the need for rapid decisions; problems caused byrapidly expanding job demands;

·       problems caused by large recruiting and training demands;

·       problems caused by constant change;

·       and problems caused by a constant strain on the resources. 

 

One of the solutions Kotter & Sathe (1978) suggest to deal with suchrapid growth is the use of matrix structures; they claim that thisorganizational design is capable of successfully handling a volatile and rapiddecision making environment.  Theyrecognize that matrix structures are difficult to implement because theyundermine the dictum that most managers follow, ‘authority must equalresponsibility’.  They suggest that teambuilding activities can help the successful implementation of matrixstructures.  They also recommend that theorganizational culture be developed to include a shared belief in openness, ashared sense of what the company is and where it is going, a clearly perceivedcommitment to employee welfare and norms supporting welfare and change.

 

A matrix is defined as a type of organization structure that is built around two or moredimensions, such as functions, products, or regions, and in which people havetwo or more bosses (Galbraith, 2009). Such a structure is typical of many IT companies inIndia.

Why would a companychoose a matrix type of organization structure and risk confusing people bygiving them two bosses?  According toGalbraith (2009), “it does so becauseits business strategies require it to be excellent simultaneously at two orthree different things” (p.1). The drivers for choosing a matrix structure arethe pursuit of a dual- or multiple-priority strategy and the sharing ofspecialized and expensive resources. Using a matrix structure requirescomplementary and reinforcing changes to the Information Technology system,planning and budgeting processes, the performance management system, the bonusawards, the selection and development criteria and so on. Explaining further, (Sy & D'Annunzio, 2005) states that thematrix is a grid-like organizational structure that allows a company to addressmultiple business dimensions using multiple command structures. While complexvariations exist, the basic structures have two dimensions, for example, functionby product matrix, geography by product matrix. According to Sy &D’annunzio, the matrix offers many advantages to global organizations; theseinclude:


·      allowing the company to leverage vast resources whilestaying small and task-oriented;

·      encouraging innovation and fast action;

·      and making information available to those who know howto use it.

 

Some of the disadvantagesof the matrix are:

 

·      it violates the traditional principles of authority;

·      it can breed ambiguity and conflict;

·      it can require more managerial and administrativesupport.

 

Matchingclosely to what she has observed in Indian IT companies, this author found thatSy & D'Annunzio (2005) identified fivechallenges of matrix organizational structures:


·      misaligned goals,

·      unclear roles and responsibilities,

·      ambiguous authority,

·      lack of a matrix guardian

·      and silo focused employees. 

·       

Aligning goalsalong the different dimensions of a matrix structure, (for example, function,products, or geographic regions) is a key challenge for top levelmanagers.  Managers and team members inIndian IT companies also struggle with competing or conflicting objectives betweenthe dimensions; inadequate processes to align goals; lack of synchronizationand coordination; and in sufficient communication between matrixdimensions. 


According toSy & D’Annunzio, managers state that there is often confusion whenfunctional objectives conflict with regional requirements and confusion overroles and responsibilities is a common problem in almost all matrixorganizations.  This stems from unclearjob descriptions and guidelines for roles and responsibilities that createtension among employees and confusion over who the boss is. 


Ambiguousauthority stems from the fact that leaders can have responsibility withoutauthority because of the dual reporting structure.  In addition, leaders are unaccustomed tosharing decision rights, and this delays the decision making process. 


The matrixguardian is a member of the senior management team who identifies bestpractices that can be disseminated throughout the organization; the keyfunction of the matrix guardian is to monitor the performance of the matrix.  Often the lack of consequences and rewardsfor matrix performance fails to motivate the employees to make the matrixwork. 


Employees inlarge matrix organizations tend to be silo focused because they view theirmembership and loyalty as belonging to a certain subunit of the organization,leading to a mentality that impedes coordination and collaboration required fora successful matrix.   Furthermore,personal conflict between leaders hinders collaboration between units, whichcontributes to lack of trust between members of the different businessunits. 

 

     To overcome some of these challenges, Sysuggests the following:


·      Establishment of clear description of roles and areasof responsibilities;

·      a set plan for communication and information sharing;

·      appointment of a senior management member as thematrix guardian;

·      skills development to work in matrix;

·      providing cross functional work experience;

·      and encouraging relationship building through informalnetworking.

 

Needless tostate, the maturity and capability of senior management is critical in ensuringthat the matrix structure works effectively. Since matrix organizations aredesigned to balance opposing dimensions (functions, products, regions), theessential leadership challenge is to manage complexity in multiple reportingstructures; this requires a high level of collaboration and communicationbetween the two or more bosses (Buono,2009). However, as will be seen in the next part, establishing and managingthe culture in an organization is easier said than done.

 


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