Matrix Structure & Multidivisional Structure, Essay Example

Abstract

David Jones joined Rayovac in 1996. At that time, the company was actively involved in the process of battery production. As the CEO, Jones has introduced a new diversified product line, which had to target different groups of customers. The fact of replacing Rayovac with Spectrum Brands Corporation name signified the company’s gradual transition to the new form of management, where products were diversified across several different markets (pets, lawns and garden care, and personal grooming), and where diversification and team-oriented management style were expected to produce positive impacts on the overall quality of the company performance.

Introduction (background)

David Jones joined Rayovac in 1996. At that time, the company was actively involved in the process of battery production. As the CEO, Jones has introduced a new diversified product line, which had to target different groups of customers. The fact of replacing Rayovac with Spectrum Brands Corporation name signified the company’s gradual transition to the new form of management, where products were diversified across several different markets (pets, lawns and garden care, and personal grooming), and where diversification and team-oriented management style were expected to produce positive impacts on the overall quality of the company performance.

Multidivisional structure vs. Matrix structure

There is no secret in that diversification of product lines results in the growing structural complexity within organizations. As Spectrum Brands seeks to diversify its products, corporate managers may lose control over their product lines, while managers and employees may face hierarchical challenges, being unable to deliver their messages to the higher organizational authority. In this situation, Spectrum Brands can successfully utilize the benefits of multidivisional organizational structure, which “organizes departments into larger groups called divisions” (Ferrell, Hirt & Ferrell, 2008). For Spectrum Brands, divisions can be organized by product: in other words, each division will work on either pets products, or personal grooming products, or lawns and garden care products. Within these divisions, departments will be organized by geographic principles, to make sure that the company can meet the needs of individual consumers and consumer groups. In a similar way, Spectrum Brands could potentially organize itself as a matrix organization – the company that operates as a combination of various project teams, which are created to work on a single project and are later dismissed. Given that Spectrum Brand operates along the three specific product lines, matrix structure seems too expensive and complicated. Although matrix organizations promote flexibility and enhanced cooperation, they also create several intersecting authority lines, which make it difficult and complex for the organization to manage. In case Spectrum Brands decides to develop a new product line, the matrix structure can be used on a temporary basis, when specialists from a variety of areas will work together on a new project, and when completed, will return to their functional obligations.

Communication problems

Although both matrix and multidivisional structures are organized to reduce or eliminate communication issues that emerge in traditional organizational hierarchies, both are not without their communication problems. As a multidivisional company, Spectrum Brands may face a variety of communication problems: (1) communication problems between corporate and divisional managers; (2) communication problems between divisions; and (3) the problem of delivering the value of multidivisional structure to stakeholders. In the atmosphere, where multiple divisions work on similar tasks, Spectrum Brands will require that divisions establish close reciprocal ties with each other and with the corporate management (Barish, 2007). At the same time, multidivisional structure usually works to delegate authority to divisional and department managers, and the latter may not always be able to contact senior managers, to confirm that their decisions go in line with the major corporate objectives. In this situation, Spectrum Brands can resolve all these issues by establishing a central corporate communication center, which will be granted considerable degree of communication centralization; which will coordinate communication between different divisions and departments; and which will nevertheless leave sufficient freedom to divisional and departmental decision-making. According to Cornelissen (2008), such centralization of communication efforts in Spectrum Brands will have “advantages in terms of a greater corporate control and coordination of all communication programs to stakeholders, ensuring consistency and achieving greater efficiency as research and communications can be shared”. Bearing in mind that all products are produced under the single Spectrum Brands brand, it will be easier for the company to centralize its communications and to bring in the meaning of value into its messages. In case of the matrix organization structure, communication issues become somewhat different. The three communication problems, which Spectrum Brands may encounter in matrix structure include: (1) high level of communication confusion about potential roles and responsibilities between team managers and team members; (2) communication difficulties between functional team and corporate managers; and (3) the need for establishing a common language (understanding) of management processes across project teams. Kuprenas (2003) suggests that all these issues Spectrum Brands can readily resolve by (a) creating a written description of roles and responsibilities for each team member; (b) creating a temporary project team, which would monitor the progress of different functional projects and divisions; and (c) providing mentoring through “a forum for project managers to receive direction and encouragement in performing their new tasks as well as educate the key staff” within teams.

Centralization

Centralization is the issue, which Spectrum Brands may face regardless of what organizational structure it chooses. When choosing whether to centralize or to decentralize, Spectrum Brands should consider duplication of functions and reduction of communication costs in decentralized organizations as opposed to the greater unity of responsibility in centralized operations (Barish, 2007). As long as Spectrum Brands seeks to diversify its products and to broaden the scope of its operations, decentralization should become one of its major organizational objectives. Although decentralization will inevitably result in duplication of functions, Spectrum Brands will be able to avoid serious paper costs and bureaucratic complications. Simultaneously, when decentralized, divisions and project teams at Spectrum Brands will act faster and more efficiently. That, however, does not mean that Spectrum Brands should encourage full decentralization; in its organizational efforts, the company should wisely balance the benefits of decentralization with reasonable centralization. In the multidivisional structure, centralization of communication efforts will significantly improve the overall efficiency of operations. In the matrix structure, decentralization of project tasks and decision-making should be balanced with the centralization of control over the quality and efficiency of project initiatives (through the already mentioned temporary control project teams). All these initiatives will ensure that Spectrum Brands can redirect its efforts in a way that facilitates the process of achieving the major organizational objectives.

Conclusion

Seeking to diversify its product lines and to broaden the range of business operations, Spectrum Brands can utilize the benefits of either multidivisional or matrix organization structure. Both types are associated with various communication issues. Regardless of the structure Spectrum Brands chooses, decentralization should become one of the major organizational objectives. This, in turn, should be wisely balanced with moderate centralization of either communication (in multidivisional corporation) or project control (in matrix structure) tasks.

References

Barish, N.N. (2007). Systems analysis for effective administration.

Cornelissen, J. (2008). Corporate communication: A guide to theory and practice. SAGE Publications.

Ferrell, O.C., Hirt, G. & Ferrell, L. (2008). Business: A Changing world. McGraw-Hill.

Kuprenas, J.A. (2003). Implementation and performance of a matrix organization structure. International Journal of Project Management, 21: 51-62.