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Designing Matrix Organizations that Actually Work: How IBM, Proctor & Gamble and Others Design for Success



Designing Matrix Organizations that Actually Work: How IBM, Proctor & Gamble and Others Design for Success

Jay R. Galbraith

ISBN: 978-0-470-45054-3 December 2008 Jossey-Bass 272 Pages


Organization structures do not fail, says Jay Galbraith, but management fails at implementing them correctly. This is why, he explains, the idea that the matrix does not work still exists today, even among people who should know better. But the matrix has become a necessary form of organization in today's business environment. Companies now know that if they have multiple product lines, do business in multiple countries, and serve many customer segments through a variety of channels, there is no way they can avoid some kind of a matrix structure and the question most are asking is "How do we learn how to operate the matrix effectively?" In Designing Matrix Organizations That Actually Work, Galbraith answers this and other questions as he shows how to make a matrix work effectively.

Preface viii

Introduction: Matrix Organizations: What Are They?

Where Did They Come From? 1

What Is a Matrix? 3

What Are the Origins of the Matrix? 7

What Happened? 10

The Star Model 12

Implications of the Star Model 17

Part One: Simple Matrix Organizations 21

1. Simple Matrix Structures 25

Two-Dimensional Structures 25

Pharmaceutical R&D Lab Example 35

Summary 40

2. The Two-Hat Model 41

What Is the Two-Hat Model? 41

Examples of Two-Hat Structures 44

Summary 50

3. The Baton Pass Model 51

The Consumer Goods Model 51

The Pharmaceutical Model 54

Summary 63

4. The Matrix Within a Matrix 65

Design Challenges of the Matrix Within a Matrix 65

Matrix Within a Matrix at the Corporate Level 69

Mars Pet Food Example 70

Summary 73

5. Balancing Power and Defining Roles 75

Designing Power Bases 75

Roles and Responsibilities 82

Summary 85

Part Two: Complex Matrix Structures 87

6. The Three-Dimensional Matrix 91

International Strategy 91

The Geography-Dominant Matrix 98

The Balanced Matrix 102

The Business-Dominant Matrix 106

Differentiated Structures 107

Other Three-Dimensional Models 109

Summary 112

7. More Complex Matrix Structures 115

Global Account Teams 115

The Front-Back Hybrid Model 116

Summary 126

8. The IBM Structure 129

The IBM Front-Back Hybrid 129

More Complexity? 136

Summary 137

Part Three: Completing the Star Model 139

9. Communication in the Matrix 143

Informal Communication 144

Formal Communication 145

Summary 150

10. Planning and Coordination Processes 153

Goal Alignment, Dispute Resolution, and Coordination Mechanisms 153

Summary 160

11. Planning Processes in the Complex Matrix 161

What About Complex Matrix Designs? 161

Get the System in a Room 172

Online Processes 175

Summary 178

12. Human Resources Policies 179

Human Capital 180

Social Capital 196

Summary 199

13. Leadership in a Matrix Organization 201

Seeing That Conflicts Are Resolved 202

Managing the Top Team 208

Balancing Power 210

Summary 213

14. Implementing a Matrix 215

Using the Star Model 215

Building Capabilities 218

Summary 229

15. A Synopsis of Matrix Capabilities 231

Epilogue: Personal Stories: The Uses and Abuses of the Matrix 235

Early Phase: “What Is a Matrix, Anyway?” 235

Matrix Takes Off and Becomes Trendy 239

The Phase of Decline 243

The Stealth Matrix Phase 245

Today: Matrix Out of the Closet 247

References 249

About the Author 251

Index 253