Designing Matrix Organizations that Actually Work: How IBM, Proctor & Gamble and Others Design for Success

Designing Matrix Organizations that Actually Work: How IBM, Proctor & Gamble and Others Design for Success

Jay R. Galbraith

Language: English

Pages: 272

ISBN: B0062O7KO2

Format: PDF / Kindle (mobi) / ePub


Organization structures do not fail, says Jay Galbraith, but management fails at implementing them correctly. This is why, he explains, the idea that the matrix does not work still exists today, even among people who should know better. But the matrix has become a necessary form of organization in today's business environment. Companies now know that if they have multiple product lines, do business in multiple countries, and serve many customer segments through a variety of channels, there is no way they can avoid some kind of a matrix structure and the question most are asking is "How do we learn how to operate the matrix effectively?" In Designing Matrix Organizations That Actually Work, Galbraith answers this and other questions as he shows how to make a matrix work effectively.

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return, the customer may prefer—and some will insist—that the vendor create a strong local manager or a dedicated organizational unit with whom it can conduct its business; this unit becomes a front-end customer unit. Some customers want to buy systems rather than products. Wells Fargo Bank is buying products when it orders twenty-five servers from IBM, but Wells Fargo may actually want to buy a consumer banking system. A system consists of many products—desktop computers, teller terminals,

customer segments (financial services, distribution, manufacturing, and government) are shown here. The customer segments are a direct channel served by IBM’s own sales force. The fifth unit shown, channel partners, comprises the indirect channels served by the sales forces from the partners. The customer segment heads lead the strategy and customer planning activities. The people are located in the regions. So the regional heads lead the tactical activities of allocating talent across the

times, they may shift resources to an RNAM or a district. They may accept the reality of an underperformer for the period and have a couple of the green accounts make up the shortfall. Thus the spreadsheet is a useful tool for visually representing the complete national situation, for gaining agreement on the plan, and for managing the fulfillment of that plan. The spreadsheet is also useful as a link to the performance management system and the reward system. The cells in the spreadsheet are

find people who are experienced with customers and with different geographies, and who have the cooperation skills needed in a matrix organization. These firms have learned to grow their own. An audit firm can serve as an example. A young Swiss auditor was identified as a talented performer on audits of banks in Zurich. When a global team was created for Citibank, the auditor, who had experience in audits of Citibank’s subsidiary, became the Swiss representative on the Citibank team. On the basis

Management’s role is to seize the opportunity and drive the change. Leaders may sponsor a formal development program, such as training sessions for team members. These sessions can facilitate more learning and networking; also, management and customers can attend and get feedback from the participants. But most important is the opportunity for management to select and develop the talent and leadership for the new strategy and structure. By observing and reviewing the teams, management can

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