Same time, last week, I was invited to speak on Matrix Structure in one Globalization conference. While working on my brief, some stray thoughts came to my mind and I’ve tried to capture those below.
Despite working in modern day globalised businesses, old memories continue. E.g. things that we learnt during the post grad management programme, way back in early 80’s—that not only belong to the last century but also to the last millennium!
I often times wonder, how some of the theories and principles that sounded so convincingly eternal then, have almost become ancient, sometimes irrelevant and sometimes even extinct! The principle of ‘unity of command’ is an example that comes to my mind easily. Fayol, the doyen of classical school of management, while calling out 14 principles of management, had ‘unity of command’ as one of those. In his time and in his way, Fayol was absolutely right in mandating that each employee must have one and only one boss. If one looks at how he saw a manager’s job, this principle becomes even clearer. According to him, the manager had the following 5 components in his job.
The above introduction is sufficient to set the context for our current discussion. A closer scrutiny into these components of a manager’s job leads us to a conclusion that the managerial role was conceived around the task accomplishment in a systematic way. Taylor, in a way Fayol’s contemporary, also took a similar position while explaining his ‘scientific management.’ Going by Fayol’s work, we do not get any indication that he had ‘people orientation’ in his conception of a typical managerial role. Principle of ‘unity of command,’ therefore, made great sense, given that, in the industrial organizations of that era, there existed two types (or classes?) of people--those who did the actual work (workers) and those who got the work done (managers). There is another important background we have to bear in mind, while understanding and appreciating why ‘unity of command’ was so important those days. And that is, many of the management concepts then, actually evolved out of best practices in people management within military organizations. Therefore, some other principles out of Fayol’s 14 principles also indicate such influence. Authority, discipline, sub–ordination of individual interest, scalar chain (line of authority), and order are examples of some of those principles.
All the above happened roughly 100 years ago and ruled almost 80% of the last century, if not more, in some specific parts of the world. But global organizations today speak a different language, follow different norms and work on different set of principles.
So, what has caused this change?
Essentially, the organizations have spread their existence across countries and continents, cultures, time-zones etc. In addition, the employees have graduated to demand more functional autonomy within their responsibility boundaries—in short they are relatively more empowered and strive for even more of it. On the other hand, ‘managers’ of yester-era are evolving into ‘leaders.’ Although, much has been said, written and is being discussed about a difference between a manager and a leader, to my mind, the key difference is, that while a manager has a great ability to control things in his immediate sphere of influence, a leader is constantly in the process of challenging the existing spheres and looks beyond the obvious – an essential quality that has emerged for the global business builders. None other than Peter Drucker, had sensed this pretty early, when he said that the managers’ job was not to merely manage people but it was to lead people and the managers’ goal was to make productive the specific strengths and knowledge of every individual within their organizations.
'Unity of command’ was great when the businesses were local, direct supervision was feasible and in any case, manager’s job then was essentially to ensure task delivery from the group of workers they managed. Therefore, the system which was created around command and order principles has given way to the one that follows delegation and empowerment as new mantras.
All this has had a major structural imperative for today’s global corporations—which has given rise to the modern day ‘matrix organizations.’
For ease of explanation: The genesis of a matrix structure lies in its resemblance to a table (matrix) where each item in a table is an integral part of both, the rows and the columns. Now consider each item in the table as an employee, who has linkages at both levels—rows and columns. Therefore, matrix style of management is one where an individual has two reporting bosses - one functional and one operational—in complete subversion of ‘unity of command!’
Now let’s take just one example of why such structures have become inevitable. ABC Corporation is a large global company headquartered in the US and does business and has its employees based in about 75 countries in the world. It’s CFO for India reports administratively to the CEO of India and functionally to the Vice President- Finance in regional headquarters in Singapore.
Since this article has a limited purpose, I’m not getting into the intricacies of a matrix organization. Yet, the conclusion is obvious: what needs to change must change as per times—else the forces of change will anyway make that happen!