It was such a coincidence that I read a book named “Designing Matrix Organizations that Actually Work” two years ago which used Procter & Gamble as the example, while in the corporate strategy class today, the case study we looked at was again Procter & Gamble on their evolution of organizational design over the years.

 Some thoughts and key take away from the class and the case study today are the following:

Disruption after Major Re-organization
Similar to Mergers & Acquisition, a major organizational structure change can cause a significant disruption on organizational process, thus it will risk the employee productivity and efficiency. You might say, this sounds straight forward, why don’t you follow up with adjust your process right after? Well, I believe the answer is “yes, we should”, however, bear in mind the organization inertia, even we want to change the process, it will always take time to implement considering the organizational capability, and culture impact. A senior manager from one of  the American fortune 500 company once shared with me their expectations on how long it will take to get the reorganization full implemented which was 18 months. Interestingly, Professor Ppuranam mentioned in the class today that research data showed multinational companies especially in mobile and telecommunications sectors averagely tend to change their organization every 18 months. Imagine the organization has not fully adapted to the new process and way of working yet while it changed again. Indeed, we have to keep in mind on the disruption impact of the re-organization.  

No Organization Is Perfect, implementation is key
With the complexity increase in our business environment, as well as the context and condition will change, we won’t be able to get a perfect organization all the time, while many organization try to find the best fit for their business environment, they may not aware that most of failure can be caused by improperly implementation. I personally see the middle management is playing a crucial role in the implementation, making sure employees are clear with direction, the organization is transparent with information and communication, etc.   

Matrix is unavoidable
Unless you work for a small, simple and mono business, you will inevitably work with matrix organization, particularly when we think about the forces will continue to shape the future – globalization, technology, carbon concerns, the business complexity is continuously increase faster and faster. The simple model of the reporting line won’t work anymore, we will have to face the 2nd and 3rd dimension. Even your organization may not look like a matrix on paper, the interface and interactions in business will force you to adapt into matrix formally or informally. This then leads to the next question – how the future organization should look like? What are the organizational capabilities we should prepare for our companies?

Informal Structure Matters
 The world is going global and virtual. Informal structure is playing an increasingly important role. It is a double edge sword, which can help the organization amend the gaps, and may also hurt the organization’s formal structure. The key is how do we want to best utilize it – proper rotation, external hiring may help to balance it to a healthy level.  But most importantly train your organization to deal with informal structure is equally import to prepare for the future.

A good HBR article you may want to look at: Harnessing Your Staff’s Informal Networks.

One Response to “A piece of thoughts on organizational design”

  1. avatar Mayur Gandhi says:

    well, Can anybody help me to reference me some books on MBA course from Seniors , i m interested to join LBSF so i need some advice from senior students in general MBA , which books for MBA lecturers advice to read in strategy & Operations & Crisis mgmt…plz email me in,…. plz help me