C. Hybrid structure is a form of departmentalization that adopts parts of both functional and divisional structures at the same level of management.
1. Hybrid structures are adopted by large organizations to gain the advantages of functional and divisional structures.
a. Functional departments are created to take advantage of resource utilization efficiencies, economies of scale, or in-depth expertise.
b. Divisional departments are usually created to benefit from a stronger focus on products, services, or markets.
2. The hybrid structure has several advantages.
a. Corporate and divisional goals can be aligned.
b. Specialized expertise and economies of scale can be achieved in major functional areas.
c. Adaptability and flexibility may be achieved in handling diverse product or service lines, geographic areas, or customers.
3. The hybrid structure has several disadvantages.
a. Conflict may arise between departments and divisions.
b. Hybrid organizations tend to develop excessively large staffs in the corporate-level functional departments.
c. There may be a slow response to exceptional situations requiring coordination between a division and a corporate functional department.
4. The hybrid structure is best used under particular conditions.
a. The organization faces environmental uncertainty best met by a divisional structure.
b. The organization requires functional expertise and/or efficiency.
c. The organization has sufficient resources to justify the structure.
D. A matrix structure is a type of departmentalization that superimposes a horizontal set of divisional reporting relationships onto a hierarchical functional structure.
1. An organization with a matrix structure has a functional and a divisional structure at the same time.
2. Employees who work in a matrix organization report to two “bosses,” thus, the unity-of command principle is violated.
3. Organizations that adopt a matrix structure usually go through several identifiable structural stages.
a. Stage 1 is a traditional structure, usually a functional structure, which follows the unity-of command principle.
b. Stage 2 is a temporary overlay in which managerial integrator positions are created to handle issues of finite duration that involves coordinating across functional departments.
c. Stage 3 is a permanent overlay in which the managerial integrator positions become permanent.
d. Stage 4 is a mature matrix, in which matrix bosses have equal power.
4. As an organization passes through the matrix stages, horizontal integration increases at the cost of greater administrative complexity. The matrix form of organization has several advantages.
5. The matrix form of organization has several advantages.
a. Decision making can be decentralized.
b. Horizontal coordination is strengthened.
c. Environmental monitoring is improved.
d. Responses to environmental changes are quickly made.
e. Functional specialists can be added to or resigned to projects as needed.
f. Support systems can be allocated to projects as needed.
6. Matrix designs have several disadvantages.
a. Administrative costs are increased.
b. Lines of authority and responsibility may not be clear to individual employees.
c. Possibilities of conflict are increased.
d. Individuals can become preoccupied with internal relations at the expense of clients and project goals.
e. All decisions may become group decisions, leading to gross inefficiency.
f. Reactions to change may be slowed if interpersonal skills are lacking or top management fights for control.
7. Matrix designs are usually appropriate when the following three conditions are met:
a. The considerable pressure from the environment that necessitates a simultaneous and strong focus on both functional and divisional dimensions.
b. The demands placed on the organization are changing and unpredictable, making it important to have a large capacity for processing information and coordinating activities quickly.
c. There is pressure for shared resources.
8. Research indicates some of the factors that may be necessary to the success of a matrix systems
a. The organizational culture may need to be changed to support collaboration.
b. Managers may need special training, especially in interpersonal relations.
E. Of particular interest are two new types of organizational structure that have recently emerged: the process structure and the networked structure.
1. A process structure is a type of departmentalization which groups positions into process team which are given beginning-to-end responsibility for that process or that specified work flow. The process structure is sometimes called the horizontal organization.
2. The networked structure is a form of organizing in which many functions are contracted out to other independent firms and coordinated through the use of information technology networks. Sometimes the networked structure is called the virtual corporation because it performs as virtually one corporation.
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