The matrix structure is here to stay, but its complexity can be minimized, and companies can get more value from it
The way a company organizes itself—how it allocates responsibilities, how it organizes support services, and how it groups products, brands, or services—can have a substantial impact on its effectiveness. Global companies, however, find structure difficult: in our recent survey of over 300 senior executives,1 only 44 percent agreed that their organizational structure created clear accountabilities.
Global companies find structure difficult because there are no simple solutions—most global structural options create challenges as well as benefits. For example, many companies have focused for years on standardizing structures; easily understood and navigated structures simplify costs and make sharing of risk and information easier and therefore support many of the benefits of being global. However, global companies are now often finding that they are reaching the limits of this benefit—their standardization has become so thorough that they find it hard to achieve the flexibility needed to respond to local market requirements. Many are therefore starting to revisit the trade-off between standardization and local flexibility.