Reference no: EM133229675

Question: AKU Resorts is a chain of boutique resorts, with locations in Penang, Port Dickson, Kota Kinabalu and Cameron Highlands. Some customers return to the same location year after year, and others enjoy trying out different locations in the group. However, recent reports indicate that sales are down and customer complaints are up. Resort managers are pointing fingers and insisting that the middle managers at each location are not upholding company standards. Currently, the company has adopted a divisional structure, with a vice-president for each of the four resorts.

Frustrated by inconsistent service and weak sales, AKU Resorts engaged the services of a consultant. After visiting each of the resorts and speaking with employees and guests, the consultant is recommending that the company move from its current divisional structure to a matrix organization. The consultant explains that a matrix organization is used by many innovative organizations, such as NASA, to achieve functional and divisional control. Although some managers think that this is a great idea, others are concerned that their authority and control may be undermined by this new organizational structure. AKU Resorts knows that something has to change, but are unsure if this is the right solution.

a) Based on the above case, provide THREE (3) conditions for a matrix structure to become appropriate in the above case.