Changing power balance in matrix organizations

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Modern organizations require new structural forms to cope with uncertainties arising from the challenges of global competition and rapid technological and environmental changes (Clarke and Clegg, 1998). One of the most important developments in the area of planned change has been on how to work with large systems so as to initiate and sustain change over time. It was from such contexts that the matrix concept emerged. During the 1950s the term matrix emerged in the United States aerospace industry and, as it has developed through the years, the term has come to be accepted in both business and academic circles. In the 1960s the matrix was sought as a fundamental alternative for dealing with unique management problems of coordination, communication and control (Davis and Lawrence, 1977). In the 1970s and 1980s interest in matrix organizational structures peaked. Since that time, research and literature on the matrix has diminished; contrarily, organizations continue to adopt the matrix as a viable alternative to deal with their increasingly complex business environment. In the recent past, some of the companies that applied a complex global matrix structure have included Asea Brown Boveri (ABB), Zurich (1991); Brown & Root (BR), UK (1999); Hatch (1999) – Formerly BHPE and Kaiser mergers; IMC (1999); Parsons Brinckerhoff (PB), (1999); and Sinclair Knight and Merz (SKM), (2002). These companies have used matrix structures to achieve worldwide economies of scale, combined with local flexibility and responsiveness. The purpose of this study was to investigate the validity of political theories of organizations in major international companies that have implemented matrix structure, with a focus that includes identifying: i. The key factors behind the strategic decision to change the corporate organization in international companies to a matrix structure. ii. The weaknesses and strengths of these matrix structures for subsequent organizational performance. iii. The effects of transition to matrix structure on organizational performance. iv. The factors used to maintain a power balance between divisions. v. A model that seeks to diminish or reduce matrix structure weaknesses to increase organizational effectiveness. The research was conducted in the form of a questionnaire survey and semistructured interviews. To illustrate the implementation of the matrix structure that occurred in a real world environment, SKM has been researched as an intensive case study. Preface As a professional engineer I have had opportunities to be involved with major projects in various international organizations. I have also had opportunities to observe organizations and to analyse their operations by exploring existing procedures and manuals. It was noticeable that the overall success of the projects relied very much on organizational decision making. This observation led my paradigm shift from projects to organizational studies and to the idea of conducting research that aims to investigate the weaknesses and strengths of matrix structures for organizational performance. Introduction Thesis structure This thesis presents a detailed account of the research activities undertaken by Nursen Saracoglu and the outcomes of that research. The purpose of this research is to investigate the validity of political theories of organizations in major international companies that have implemented matrix structure. Data has been collected using a combination of methods, including questionnaires, semistructured interviews, and direct examination of library catalogues and databases. The structure of this thesis is designed as follows: Chapter 1 introduces, and describes the background to the research project. The theories that provide a background to the various factors involved in organizations choosing to change to matrix structures, and the resulting positive and negative effects on the organization, are presented in this chapter. Chapters 2 reviews and analyses the literature review that has been conducted to focus, especially, on how changes to the structure and design of power in matrix organizations can have important implications and consequences. The literature review looks in detail at different organizational theories, particularly theories on power within organizations, which have a bearing on the effect of a matrix structure on an organization. Each theory is critiqued in terms of its relevance to matrix structure analysis. Strategic Contingencies Theory (SCT) and Resource Dependency Theory (RDT) best explain the effect of different levels of power inside a matrix structure. Chapter 3 details the research design and methodology. This chapter describes the advantages and disadvantages of quantitative and qualitative approaches and presents the rationale of selecting research methodology. The participating organization, SKM, is described in terms of its history and its matrix structure is outlined. Chapter 4 illustrates the results of research that defines potential areas of concern associated with matrix structures. The discussion mainly centres on the methods used to analyse the data and then focuses on the different dependent and independent variables derived from the data that are used in the analysis for correlation purposes. The aim of this chapter is to explain the various statistics used to analyse the data and to list the variables that came up as a result of answers to questionnaire. These variables are then analysed against each other in order to develop a sense of the effectiveness of the matrix structure in SKM. In Chapter 5 the qualitative data was examined using the responses obtained from interviews with the top managers of SKM. This chapter aims to identify the themes that have emerged from these interview responses and present them in order of most to least common within each area of research, illustrated with comments from some of the respondents. Chapter 6 discusses the survey and interview results in order to exploit quantitative findings to identify patterning in qualitative data. In parallel with SCT and RDT, the relationship between power and performance in matrix organizations is presented. The new concepts that emerged based on the research findings are introduced and discussed according to the relevance to the research objectives. Chapter 7 This chapter concludes the research and presents research limitations, boundaries, the contribution to the body of knowledge and a summary of future research opportunities. The case studies give a sense of how various elements of Matrix structure that outlined in this research were actually applied by other particular organizations are exhibited in Appendix A.
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