Matrix structures and performance: the search for optimal adjustment to organizational objectives

Matrix structures continue to be utilized at high-tech companies despite considerable evidence about the many shortcomings of the method. Empirical research among companies employing matrix structures revealed three different resource allocation policies: (1) profit and cost centers; (2) direct priorities; and (3) comprehensive allocation planning. In order to evaluate organizational performance for each policy, a simulation was constructed to ascertain the optimal distribution of influence for managers under different work parameters and for various organizational objectives. The simulation provided answers for when organizational and market conditions necessitate increases or reductions in the influence of project managers in order to reach optimum performance. Based on the organizational objectives selected for this study, different patterns were found to characterize decision-making. Patterns varied considerably. At one extreme, the distribution of influence for reaching a specific objective remained stable despite changes in work parameters. In contrast, another pattern involved a high dependence between a specific work profile and the optimization of performance, with changes in each work parameter leading to quite different decisions about whether to increase, decrease, or maintain influence.

[1]  T. A. Stewart,et al.  The search for the organization of tomorrow. , 1992, Fortune.

[2]  Jay R. Galbraith.  Matrix organization designs How to combine functional and project forms , 1971 .

[3]  L. Burns,et al.  Adoption and abandonment of matrix management programs: effects of organizational characteristics and interorganizational networks. , 1993, Academy of Management journal. Academy of Management.

[4]  W. Joyce.  Matrix Organization: A Social Experiment , 1986 .

[5]  William F. Joyce.  MEGACHANGE: How Today's Leading Companies Have Transformed Their Workforces , 1999 .

[6]  W. C. Wall.  Integrated management in matrix organization , 1984, IEEE Transactions on Engineering Management.

[7]  Frederick S. Hillier,et al.  Introduction of Operations Research , 1967 .

[8]  P. B. de Laat,et al.  Matrix Management of Projects and Power Struggles: A Case Study of an R&D Laboratory , 1994 .

[9]  Franklin Given Moore.  A management sourcebook , 1964 .

[10]  D. Teece,et al.  DYNAMIC CAPABILITIES AND STRATEGIC MANAGEMENT , 1997 .

[11]  Dimitri Golenko-Ginzburg.  A two-level decision-making model for controlling stochastic projects , 1993 .

[12]  Dimitri Golenko-Ginzburg,et al.  On-line Control Model for Cost-simulation Network Projects , 1996 .

[13]  D. Golenko-Ginzburg.  On the Distribution of Activity Time in PERT , 1988 .

[14]  S. Ghoshal,et al.  Matrix management: not a structure, a frame of mind. , 1990, Harvard business review.

[15]  J. D. Wiest,et al.  Management Guide to PERT/CPM , 1969 .

[16]  N Roberts,et al.  Introduction to Computer Simulation—A System Dynamics Modeling Approach , 1994 .

[17]  Richard A. Goodman.  Organization and manpower utilization in research and development , 1968 .

[18]  Paul C. Nystrom,et al.  An Economic Analysis of Matrix Structure, Using Multinational Corporations as an Illustration , 1998 .

[19]  D. Keith Denton.  Horizontal Management: Beyond Total Customer Satisfaction , 1998 .

[20]  Bruce A. Pasternack,et al.  The CENTERLESS CORPORATION: A NEW MODEL FOR TRANSFORMING YOUR ORGANIZATION FOR GROWTH AND PROSPERITY , 1998 .

[21]  Victor E. McGee,et al.  Designing Lateral Organizations: An Analysis of the Benefits, Costs, and Enablers of Nonhierarchical Organizational Forms* , 1997 .

[22]  R. H. Waterman,et al.  In Search of Excellence , 1983 .

[23]  Paul R. Lawrence,et al.  The human side of the matrix , 1977 .

[24]  D. R. Fulkerson,et al.  Flows in Networks. , 1964 .

[25]  Dimitri Golenko-Ginzburg,et al.  Hierarchical decision-making model for planning and controlling stochastic projects , 1996 .

[26]  Harry Boer,et al.  Balanced matrix structure and new product development process at Texas Instruments Materials and Controls Division , 1999 .

[27]  Richard Alan Goodman,et al.  Organizational Preference in Research and Development , 1970 .

[28]  D. Malcolm,et al.  Application of a Technique for Research and Development Program Evaluation , 1959 .

[29]  Dawn R. Utley,et al.  Project Managers and Functional Managers: A Case Study of Job Satisfaction in a Matrix Organization , 1998 .

[30]  Ronald N. Ashkenas,et al.  The boundaryless organization : breaking the chains of organizational structure , 1995 .

[31]  R. Sbragia.  Clarity of manager roles and performance of R&D multidisciplinary projects in matrix structures , 1984 .

[32]  L. Vogel,et al.  Strategy and Structure , 1986 .

[33]  G. Walker,et al.  Asset Choice and Supplier Performance in Two Organizations-US and Japanese , 1994 .

[34]  E. Larson,et al.  Organizing for product development projects , 1988 .

[35]  M. W. Cardullo.  Introduction to managing technology , 1996 .

[36]  Jay R. Galbraith.  Competing with flexible lateral organizations , 1993 .

[37]  O. Williamson,et al.  Markets and Hierarchies: Analysis and Antitrust Implications. , 1977 .

[38]  E. Larson,et al.  Matrix Management: Contradictions and Insights , 1987 .

[39]  Michael J. C. Martin.  Managing Innovation and Entrepreneurship in Technology-Based Firms , 1994 .

[40]  J. K. McCollum,et al.  The effects of matrix organization size and number of project assignments on performance , 1991 .

[41]  Mary L. Tucker,et al.  Organizational Communication: Development of Internal Strategic Competitive Advantage , 1996 .

[42]  R. Katz,et al.  Project team aging and performance: The roles of project and functional managers , 1988 .

[43]  Thomas J. Allen,et al.  The Influence of Communication Technologies on Organizational Structure , 1987 .

[44]  G. Meyer,et al.  Communicated Knowledge: A Learning Foundation , 2011 .