Matrix organisations, featuring multiple reporting lines, have been a mainstay of business for decades. Yet, they often face criticism for their complexity and inefficiency. Despite these criticisms, matrix structures remain relevant, especially for global companies needing to balance power between functions and regions.
A successful matrix organisation requires clarity, which can be achieved through clearly defined roles and responsibilities. The role of the corporate centre should be to set strategy and values, and manage the portfolio. Business units should be responsible for operational execution.
One of the main challenges in matrix organisations is decision making. To overcome this, companies should establish ‘soft’ decision points, where a single executive has the final say, and ‘hard’ decision points, where decisions are made collectively. This approach can help balance power and ensure effective decision-making.
Another critical aspect is talent management. Matrix organisations demand leaders who are comfortable with ambiguity and can manage through influence rather than authority. To develop such leaders, companies should provide training and coaching.
In summary, matrix organisations can be successful if they have clear roles and responsibilities, effective decision-making processes, and leaders who can manage through influence. Despite their complexity, they can provide a balance of power that is vital for global companies.
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