Reference no: EM132307485

Despite its inherent complexity, the matrix approach is increasing in use, particularly by top companies. According to the Hay Group, the majority of the World’s Most Admired Companies use this structure for competitive advantage. The compelling benefits include • deploying expertise as needed throughout the enterprise for specific initiatives • promoting cross-functional problem solving • reducing cost by leveraging resources • creating a balance of power between functions • balancing competing priorities, such as global vs. local or product vs. geography • fostering innovation, as multiple perspectives focus on key issues • accelerating products and services to market. By consolidating expertise to deploy to projects as needed, the matrix structure can promote more efficient use of corporate resources and leverage economies of scale. At Avon Products, for example, the matrix structure was initially adopted in global business units, such as supply chain, as a way to rationalize resources and gain alignment of goals. The application of the matrix has increased over time. Renee E. Russell, executive director of HR and change management, service model transformation at Avon explains, “The matrix quickly broadened to obtain alignment across multiple functions, such as HR, IT, finance, and marketing.” At Avon, the matrix structure promotes greater alignment. “We have more of a focus on the value that we offer in our products, and the matrix has helped us to create alignment of people and processes to bring our value proposition to life,” Russell says. “The emphasis on working productively is reinforced through the performance management process.” In addition to the benefits of the matrix for internal efficiencies and collaboration, a company’s external marketplace image may also be enhanced. “As a consumer products company, the matrix is important from a marketing perspective to leverage our branding around the world and build consistency,” says Russell. Even in organizations that use a formal matrix structure on a fairly limited basis, such as Verizon Communications (where this approach is primarily used in the IT function and Verizon Business to leverage Network Engineers and other professionals on behalf of the customer), greater integration across functions is a given. “The need for information flowing across the organization has increased exponentially due to the competitive environment and the relentless pace of technology. So even in groups that don’t have a formal matrix structure, it is essential to maximize the horizontal flow of information so that systems, relationships, and processes work together as seamlessly as possible and we leverage our scale,” says Michael P. Flanagan, senior staff consultant at Verizon Communications. At another end of the spectrum in terms of usage, Bristol-Myers Squibb Company is heavily matrixed throughout its global organization. “We have the matrix every way it can be organized, including geographically, functionally, and on a product basis,” says Jane Luciano, vice president of global learning and organization development at Bristol-Myers Squibb. “Based on our size and [the fact that we are] in a highly regulated industry, the matrix helps us to gain control of issues as they travel around the globe and to leverage economies of scale.”