New Enroll in our GIC Finance Online Course Here!

    Register

    Question

    Read the following passage and answer the next 3 question (Q20-Q22) An organizational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. These activities can include rules, roles, and responsibilities. The organizational structure also determines how information flows between levels within the company. Traditional organizational structures come in four general types – functional, divisional, matrix and flat – but with the rise of the digital marketplace, decentralized, team-based org structures are disrupting old business models. Each organizational structure comes with different advantages and disadvantages and may only work for companies or organizations in certain situations or at certain points in their life cycles. “Poor organizational design and structure results in a bewildering morass of contradictions: confusion within roles, a lack of coordination among functions, failure to share ideas, and slow decision making bring managers unnecessary complexity, stress and conflict,” Ultimately, it’s important to get a group’s organizational structure correct in order for its aims to be successful.

    Which of the following is an advantage of a matrix

    organization?
    A Clear organizational structure Correct Answer Incorrect Answer
    B Coordination of complex and interdependent activities Correct Answer Incorrect Answer
    C Elimination of power struggles Correct Answer Incorrect Answer
    D All of the above Correct Answer Incorrect Answer
    E Potential for conflicting management directives Correct Answer Incorrect Answer

    Solution

    A matrix organizational structure is a company structure in which the reporting relationships are set up as a grid, or matrix, rather than in the traditional hierarchy. In other words, employees have dual reporting relationships. Matrix structure is a type of Organizational Structure that is used in large multinational companies but this can create power struggles because most areas of the company will have a dual management. While matrix organizations are effective at coordinating complex and interdependent activities, there is considerable opportunity for confusion because of dual chains of command. The organization structure is often unclear and power struggles develop.

    Practice Next