The final type of structure is the matrix structure; they are neither flat, nor hierarchical. They are generally found in ‘one off’ projects, such as building a bridge or constructing a motorway. A matrix structure allows the project managers to have direct contact and support from the main functions of the business, such as finance, production and human resources. The project teams will work on the project until completion, when the team will be disbanded and a new team will form to work on the next project.
Lets Go Superbowl, in Barnstaple has a flat structure (See Appendix 1), because they are a small, informal business. The structure is very vague and basically descends in relation to the pay structure. There are advantages to running a business using a flat structure, these include:
Good communications
Quick at responding to new ideas, complaints and requests
Flexible
However, businesses may have problems keeping a flat structure as they expand, if they attempt to do so, a supervisors span of control generally becomes too great, and not between the ‘ideal’ of 2 to 6.
Dingles is the southwest store of the national chain House of Fraser, both Dingles independently and House of Fraser as a national chain have a large hierarchical structure (See Appendix 2). The first hierarchy shown in Appendix 2 is an over view of head office in House of Fraser, the 2nd is one functional area in the Exeter store. There are many benefits to having a pyramid structure, these include:
Clear job roles
Good promotion prospects
A clear pay structure
Written policies (concerning holiday entitlement, safety, etc)
Large number of colleagues
A human resource function
A wide range of facilities
The opportunity to join a union
However, there are also some disadvantages, these include:
Communication and messages may be distorted as they work their way up or down the structure
Staff at the bottom of the structure may feel that the managers and people higher up the structure don’t understand or listen to them
There are lots of people to consult before changes can be made, so changes and decisions take a long time
It tends to be much more formal than a flat structure
Sometimes a large hierarchical structure may go through a process of ‘delayering’ this involves either combining layers of the hierarchy or simply getting rid of an entire layer, in an effort to try and improve communication and effectiveness of the structure for the business.
IBM uses matrix structures a lot as it uses many ‘one off’ projects (See Appendix 3). The advantages of this type of structure are:
Best possible use of specialist skills
Departments can have specialise staff to support the project teams
New teams can easily be formed and included in the structure
Old teams can easily be removed from the structure
However, there are still disadvantages, including:
Communication problems between staff from all areas
Specialist staff may not get the opportunity to get wider experience
Great potential for conflicts with all employees having equal responsibility
House of Fraser realised the importance of a good organisational structure in 1996, when its current structure was analysed. Slow decision-making and inefficient work practices were implications of the ineffective hierarchy the company once formed. The survival of the business depended on essential changes to staff duties and structure. All of House of Fraser’s 51 stores were semi-autonomous. Every store ran under its own conditions, job titles and management structure. There were many disadvantages to be found in House of Fraser’s current organisational structure:
Career paths were ambiguous
There was a lack of Clarity in:
What people did?
How they did it?
Where it was done?
Meaning a job in one store would have a completely different role and responsibilities than those of another store just 20 miles away.
The first thing they did was review the management structure. The existing management structure was top heavy. Too many managers spent too much time on excessive paperwork. It was decided that management numbers would be cut by one third. The new management structure was constructed without assistant managers. Each store section (fashion, home, visual and commercial) was put under a single manager, supported by sales staff. The newly created jobs covered areas of expertise. Sales staff would sell and support staff dealt with administration, as apposed to before when sales staff had little time to sell as they were generally doing paper work.
The new structure was not without costs. Everybody had to reapply for his or her job. Certain skills were bound to be lost as a result. House of Fraser tried to solve this problem by organising regional offices, each containing a human resources and training manager.
The new system provided a clear promotion structure. Jobs were graded and everyone could see what skills were needed to progress to the next scale.
Shown by the House of Fraser example an efficient organisation chart is essential to the success of any business or project, large or small. Depending on the business, a different type of structure is needed. Without an well-organised structure communication will suffer, it may take
