Matrix Monday: an economic analysis of matrix structure
Continuing with our ‘Matrix Monday’ series, we report back on some of the limited literature available on matrix management. Today we look at an older, but still relevant, paper on the economics of a matrix structure.
An Economic Analysis of Matrix Structure, Using Multinational Corporations as an Illustration by Tailan Chi and Paul Nystrom School (MANAGERIAL AND DECISION ECONOMICS, Manage. Decis. Econ. 1998)
This paper provides an economic analysis of matrix structures (the ‘MX-form’) compared to the more commonly found multi-divisional structures (the M-form), using multinational corporations to examine both cost-effectiveness and organizational advantages/disadvantages.
The reasons a multinational corporation would have a multi-divisional structure in place are discussed, and issues such as the significance of divisional autonomy and multidimensional interdependence are addressed. The paper examines when it becomes difficult to coordinate multi national corporations along the lines of a more conventional structure, and where the matrix may be a solution.
The paper finally goes on to look at merits and demerits of the matrix form, which it describes as a structure which ‘essentially combines two or more layers of M-form structures’, and examines the conditions which affect how efficient the matrix structure can be in a multi-national corporation.
With the limited academic resources on matrix management available online, many older (but still relevant), if you’ve found a great resource and would like to summarise it as a guest post, please contact Global Integration.
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