Given a realistic commitment to implementation, structural reorganization along functional or divisional lines has worked out successfully in many companies. This is to be expected, since the concepts of functional dominance and product-line autonomy are fair approximations of what actually goes on in functional and divisional organizations respectively. Indeed, in the latter case the structure often fits the basic strategy like a glove; hence its continuing success.
In contrast, matrix rests on an overly optimistic model of how people in organizations actually behave. Its central concept—that simultaneous decisions can routinely be made along multiple dimensions with fragmented accountability—overestimates the information-processing capacity of most human brains and the problem-solving capability of most social systems. Multiplying the signals to which managers are expected to respond eventually overloads the circuits.
Author: Tom Peters
Source: McKinsey Quarterly
Subjects: Management, Organizational Behavior
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