• Given the business situation for Spectrum Brand p. 251, explain how the firm might organize using a Matrix structure for the organization.
• Explain how the firm could operate using a Multidivisional structure.
• Discuss which structure would be more effective? Explain.
• For each of your 2 organizational structures, give 3 examples of potential communication problems the structure might cause. Recommend corrective actions the company can take to address these issues.
• For each of your 2 organizational structures, recommend the degree of centralization that would be most effective. Explain
To answer your questions, let's first understand the two organizational structures: Matrix Structure and Multidivisional Structure.
1. Matrix Structure:
In a Matrix Structure, the organization is divided into both functional and project teams. Employees report to both a functional manager (based on their expertise) and a project manager (based on the specific project they are working on). This dual reporting system allows for cross-functional collaboration and flexibility.
2. Multidivisional Structure:
In a Multidivisional Structure, the organization is divided into separate divisions, often based on product lines or geographic locations. Each division operates as a self-contained unit with its own set of functions and resources. This structure decentralizes decision-making and promotes specialization.
Now let's address your questions:
1. How Spectrum Brand might organize using a Matrix structure:
Spectrum Brand can adopt a Matrix structure by maintaining functional departments (such as marketing, finance, and operations) while also forming project teams based on specific product development projects or customer segments. This structure would enable functional expertise to be combined with project-based collaboration, enhancing flexibility and coordination.
2. How Spectrum Brand could operate using a Multidivisional structure:
Spectrum Brand can implement a Multidivisional structure by dividing their business into different divisions based on product lines or geographical regions. For example, they could have separate divisions for home appliances, consumer electronics, and personal care products. Each division would have its own functional teams to support its specific needs.
3. Which structure would be more effective:
The effectiveness of the structure depends on various factors, such as the company's size, industry, and strategic goals. However, in the case of Spectrum Brand, a Multidivisional structure may be more effective. This would allow each division to focus on their specific products or markets, leading to greater specialization and responsiveness to customer needs.
4. Potential communication problems for Matrix structure:
a) Role confusion: Employees might find it challenging to manage the dual reporting relationships, leading to role ambiguity and conflict.
b) Lack of coordination: Multiple reporting lines may create coordination challenges, as employees may receive conflicting priorities from functional and project managers.
c) Decision-making delays: With multiple levels of approval required, decision-making can become slow and hinder the organization's agility.
Recommendations to address these issues:
a) Clearly define roles and responsibilities to minimize role confusion.
b) Establish effective communication channels and project management tools to enhance coordination and ensure clear priorities.
c) Streamline decision-making processes and empower lower-level employees to make decisions within their expertise.
5. Potential communication problems for Multidivisional structure:
a) Lack of information sharing: Divisions may become isolated, limiting knowledge exchange and cooperation across the organization.
b) Duplication of efforts: Without proper coordination, divisions may unintentionally duplicate functions or projects, wasting resources.
c) Limited innovation and best practice sharing: Siloed divisions may hinder the sharing of innovative ideas and best practices among different parts of the company.
Recommendations to address these issues:
a) Foster a culture of collaboration and knowledge sharing by implementing cross-divisional teams and communication channels.
b) Establish clear guidelines and processes for resource allocation to minimize duplication of efforts and ensure efficient use of resources.
c) Encourage regular forums or platforms for divisions to share innovations and best practices, fostering a culture of continuous improvement.
6. Recommended degree of centralization for each structure:
a) Matrix structure: A moderate degree of centralization is suggested to balance functional expertise and project coordination. Centralizing strategic decisions while empowering project teams for operational decisions can help maintain strategic alignment.
b) Multidivisional structure: A higher level of decentralization is recommended to allow divisions to respond quickly to local or specific market conditions. Each division should have sufficient autonomy to make operational decisions, while important strategic decisions can be made at a centralized level to ensure consistency and alignment.
In summary, the effectiveness of the organizational structure depends on the company's specific context. Both Matrix and Multidivisional structures have their advantages and challenges. It is essential for Spectrum Brand to carefully assess their goals, resources, and the nature of their business to determine the most suitable structure and implement the necessary corrective actions to address communication issues and foster organizational effectiveness.
Matrix Structure:
In a Matrix structure, Spectrum Brand could organize its business by creating cross-functional teams that are responsible for specific projects or product lines. This means that employees would have a dual reporting structure, where they report to both a functional manager (based on their area of expertise) and a project manager (based on the project they are working on). This type of structure allows for better communication and coordination across different functions and projects.
Multidivisional Structure:
Alternatively, Spectrum Brand could operate using a Multidivisional structure. This structure involves dividing the company into separate divisions, each responsible for its own set of products, markets, or geographic regions. Each division operates as a separate entity, having its own functional departments such as marketing, finance, and production. This structure allows for greater autonomy and decision-making at the divisional level, which can result in improved responsiveness and accountability.
Effectiveness:
The effectiveness of each structure depends on various factors such as the company's goals, size, and industry. However, if Spectrum Brand aims to increase coordination and communication across departments and projects, the Matrix structure would be more effective. This is because the Matrix structure encourages collaboration and information sharing between different functions and projects, leading to greater efficiency and synergy.
Communication Problems and Corrective Actions (Matrix Structure):
1. Role Confusion: Employees may find it difficult to understand and prioritize their responsibilities due to the dual reporting structure. To address this, Spectrum Brand can implement clear job descriptions, provide training on roles and responsibilities, and ensure regular communication and feedback between functional and project managers.
2. Decision-making Conflicts: Since employees may receive conflicting instructions from different managers, decision-making can become complex. To mitigate this issue, Spectrum Brand can establish clear guidelines on decision-making authority and create a collaborative decision-making process involving both functional and project managers.
3. Resource Allocation Issues: Competing priorities and resource allocation can be challenging in a Matrix structure. Spectrum Brand can address this by implementing a centralized resource allocation system, ensuring transparent communication and negotiation between different projects, and having a dedicated resource allocation team.
Degree of Centralization (Matrix Structure):
In a Matrix structure, a moderate degree of centralization would be most effective. While some centralization is necessary for overall coordination and control, giving too much power to the central authority may hinder decision-making and slow down the project execution process. By finding the right balance, Spectrum Brand can ensure efficient collaboration and decision-making between functional and project teams.
Degree of Centralization (Multidivisional Structure):
In a Multidivisional structure, a higher degree of decentralization would be most effective. This is because each division operates as a separate entity with its own decision-making authority and accountability. By decentralizing decision-making to the divisional level, Spectrum Brand can foster innovation, adaptability, and responsiveness to local market needs. However, some centralization is still needed for strategic planning and coordination between divisions.