Comparison of Organizational Designs

Functional / Self-Contained Unit / Matrix / Process-Based / Network
Advantages (+) /
  • Promotes skill specialization
  • Reduces duplication of resources and uses resources full time
  • Enhances career development for specialists within large departments
  • Facilitates communication and performance; supervisors share expertise with their subordinates
  • Exposes specialists to others within same specialty
/
  • Recognizes sources of interdepartmental interdependencies
  • Fosters and orientation toward overall outcomes and clients
  • Allow diversification and expanding of skills and training
  • Ensures accountability by department managers and so promotes delegation of authority and responsibility
  • Heightened departments cohesion and involvement in work
/
  • Makes specialized, functional knowledge available to all projects
  • Uses people flexibly, since departments maintain reservoirs off specialties
  • Maintains consistency between different departments and projects by forcing communications between managers
  • Recognizes and provides mechanisms for dealing with legitimate, multiple sources of power in the organization
  • Can adapt to environmental changes by shifting emphasis between projects
/
  • Focuses resources on customer satisfaction
  • Improves speed and efficiency, often dramatically
  • Adapts to environmental change rapidly
  • Reduces boundaries between departments
  • Increases ability to see total work flow
  • Enhances employee involvement
  • Lowers costs because of less overhead structure
/
  • Enables highly flexible and adaptive response to dynamic environments
  • Creates a “best of the best” organization to focus resources on customer and market needs
  • Each organization can leverage a distinctive competency
  • Permits rapid global expansion
  • Can produce synergistic results

Disadvantages (-) /
  • Emphasizes routines; encourages short time horizons
  • Fosters parochial perspectives by manager; limits their capacity for top management positions
  • Reduces communication and cooperation between departments
  • Multiplies the inter-departmental dependencies; makes coordinating and scheduling difficult
  • Obscures accountability for overall results
/
  • May use skills and resources inefficiently
  • Limits career advancement by specialist to movements out of their departments
  • Impedes specialists’ exposure to others within the same specialties
  • Puts multiple-role demands upon people and so creates stress
  • May promote department objectives as opposed to overall organization
/
  • Can be very difficult to introduce without a pre-existing supportive management climate
  • Increases role ambiguity, stress and anxiety by assigning people to more than one department
  • Makes inconsistent demands, which may result in unproductive conflicts and short-term crisis management
  • May require political skills as opposed to technical skills
/
  • Can threaten middle managers and staff specialists
  • Requires changes in command and control mindsets
  • Duplicates scarce resources
  • Requires new skills and knowledge to manage lateral relationships and teams
  • May take longer to make decisions in teams
  • Can be ineffective if wrong processes exist
/
  • Managing lateral relations across autonomous organization is difficult
  • Motivating members to relinquish autonomy to join the network is troublesome
  • Sustaining membership and benefits can be problematic
  • May give partners access to proprietary knowledge/technology

Contingencies /
  • Stable and certain environment
  • Small to medium size
  • Routine technology, interdependencies within functions
  • Goals and efficiency and technical quality
/
  • Unstable and uncertain environments
  • Large size
  • Technological interdependence across functions
  • Goals of product specialization and innovation
/
  • Dual focus on unique product demands and technical specialization
  • Pressure for high information processing capacity
  • Pressure for shared resources
/
  • Uncertain and changing environments
  • Moderate to large size
  • Non-routine and highly interdependent technologies
  • Customer-oriented goals
/
  • Highly complex and uncertain environments
  • All size organizations
  • Goals of organizational specialization and innovation
  • Highly uncertain technologies
  • Worldwide operations

From Organization Development and Change, (6th Edition), pp. 270,283Cincinnati, OH, South-Western College Publishing