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Lecture 5

BU398. Lecture 5.docx

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Wilfrid Laurier University
Rosemary Mc Gowan

LECTURE 5 FUNDAMENTAL OF ORGANIZATIONAL STRUCTURE Chapter Three Matrix Structurecan be used when both technical expertise and product innovation and change are important for meeting organizational goals strong form of horizontal linkageboth division and functional structures horizontal and vertical are implemented simultaneouslyproduct managers and functional managers have equal authority within the organization the employees report to both Conditions for matrixCondition 1 Pressure exists to share scarce resources across product lines The organization is typically medium sized and has a moderate number of product lines Feels pressure for the shared and flexible use of people and equipment across those productsCondition 2 Environmental pressure exists for two or more critical outputs such as for indepth technical knowledge functional structure and frequent new products divisional structure Dual pressure means a balance of power is needed between the functional and product sides of the organization and dual authority structure is needed to maintain balanceCondition 3 environmental domain of the organization is both complex and unstable Frequent external changes and high interdependence between departments require a large amount of coordination and information processing in both vertical and horizontal directionsfunctional matrix functional bosses have primary authority and project simply coordinate product activitiesproduct matrix the project or product managers have primary authority and functional managers simply assign technical personnel to projects and provide advisory expertise as neededStrengths achieves economy of scale and flexibility 1 Achieves coordination necessary to meet dual demands from customers 2 Flexible sharing of human resources across products 3 Suited to complex decisions and frequent changes in unstable environmentfacilitates discussion and adaptation to unexpected problems 4 Provides opportunity for both functional and product skill developmentresources people equipment can be flexibly allocated across different products and the organization can adapt to changing external requirements to acquire functional or general management skills 5 Best in mediumsized organizations with multiple productsWeaknesses 1 Causes participants to experience dual authority which can be frustrating and confusingroles and responsibility are not defined clearly 2 Means participants need good interpersonal skills and extensive training conflict resolution skills human relations 3 Is time consuming involves frequent meetings and conflictresolution sessions4 Will not work unless participants understand it and adopt collegial rather than verticaltype
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