Multinational enterprises face difficulties than companies operating in domestic markets. They need to maintain organizational units that are functional at all times regardless of the differences in cultural backgrounds of workers and customers. As they do so, they have to depend on the diverse way of fulfilling their functions based on the locality of the business. The main challenge is to establish differentiated units of the organization that is responsible for overseas markets while ensuring that all operations are at par in the entire business enterprise. As such, the following context intends to show why a multinational internet retailer such as Amazon.com needs a matrix structure in its organization outlook.
It is no doubt that what is important for an international internet retailer is to create and maintain an online presence in all countries. However, that is the face of the company. It is where customers explore the products of the business enterprise (Rowlinson, 2001). By doing so, others chose to place their orders. That signifies the e-commerce aspect of any multinational internet retailer. But, when it comes to operations, the given business enterprise needs employees in all targeted markets in foreign countries. These include shipping individuals plus those who warehouse and deliver the ordered products to specific customers. In ensuring that such workers coordinate to necessitate convenience in meeting customer demands and expectations, it is advisable for such a company to adopt and implement a matrix organizational structure. It is a blend of two frameworks that include the functional organizational structure and the projectized organizational structure. While the stated structures act independently on two extreme ends, they achieve appropriate balance when mixed to form the matrix framework. That way, it is possible for a company to achieve high efficiency, quick adaptation to the market, and readiness. It means that with matrix organizational structure, a multinational internet retailer can respond with ease on matters pertaining to the demands of customers and markets. It decreases the lead time that concerns production and distribution of products. With such advantages of the matrix organizational structure, a business enterprise achieves proper operations in dynamic markets (Rowlinson, 2001). Since foreign nations present such markets, it makes sense for a multinational internet retailer to include the matrix structure in its operations at the organization level. If that is the case, then there is the need to understand that a matrix structure requires two types of management systems. They entail, first, functional management. It ensures a downward flow of authority in a vertical manner. Second, there is project management. Its mandate is to maintain a sideways flow of power. By coordinating the given styles of the management system, a company creates a matrix authority.
With matrix authority, a multinational internet retailer organizes employees in a manner that interconnects the efficiency of a functional organization with the flexibility of comprehensive operations on the local level. It implies that foreign employees are answerable to domestic managers for all personal and organizational concerns (Rodan & Galunic, 2004). In turn, local managers have the mandate to report to their bosses in head offices found at the companys headquarters. These are always in the home countries of multinational internet retailers. They signify central points that handle promotion, payment and disciplinary matters of the company. But, the workers tend to execute tasks according to the requirements of their locality. When that happens, any multinational internet retailer stands a chance to institute a performance culture in the organization. It is an aspect that bases on the accommodating nature of a matrix organizational structure. By allowing workers to do their tasks based on the nature of the local market, a multinational internet retailer is likely to attract and retain competent technical staff. The attraction part is easy since people are constantly looking for jobs. After employing qualified workers, it is important for the company to focus on long-term retainment programs. Alternatively, the matrix organizational structure allows employees to thrive in their local areas. Working in a familiar environment is a crucial element in motivating workers. Since they aspire for recognition at the international level, they are poised to work hard. As they do so, there are high possibilities of predisposing creativity and innovation. These are things that characterize a staff of technical workers. The presence of vertical and horizontal communication framework allows professional staff to relate professionally through teamwork. With close working groups, employees do not experience any barrier in their workplaces because they act on clarified tasks. Clarification in communication processes prevents misunderstandings that are the primary cause of conflicts in business that operate in domestic and foreign markets. In other words, a multinational internet retailer needs to know that a performance culture is the one where employees understand their individual roles (Rowlinson, 2001). That influences proper work ethic despite the differences that occur because of different cultural backgrounds. It is a scenario that builds on interprofessional collaboration, personal dedication, and proper communication to ensure continuity, sustainability and productivity of the business enterprise.
Based on the content discussed above, it is right to acknowledge that the matrix organizational structure induces a performance culture in any multinational internet retailer. However, it is imperative for a company to determine if the identified structure and culture are promoting the goals of the business (Rodan & Galunic, 2004). It is a process that requires measurement tools. In measuring the success-ability of the matrix structure and performance culture in organizations, it is recommendable for a multinational internet retailer to use the 4S Model. It outlines structure, strategy, systems, and skills as the four things that determine success. There is the need to align the given components at all times. If that does not happen, there are propensities of experiencing inadequate accountability, unclear roles and goals, decision-making delays, increased bureaucracies, and high level of conflict and uncertainties. If these negativities occur while a multinational internet retailer is implementing the matrix structure and performance culture, they indicate improper alignment of the four components noted in the 4S Model. Alignment makes sure that communication and cooperation are the order of the day in the organization (Rodan & Galunic, 2004).
In conclusion, a multinational internet retailer is inclined to succeed with a matrix organizational structure. It encourages the interaction of employees at all levels, coupled with clarification of roles and responsibilities at the local level. In doing so, a performance culture is realizable. It motivates employees to explore their potentials, thereby increasing workplace motivation. That results in high productivity and competitiveness. These require constant measurement using the 4S Model approach. It is the reliable way of providing recommendations that concern proper implementation of the matrix structure and performance culture.
Rodan, S., & Galunic, C. (2004). More than network structure: how knowledge heterogeneity influences managerial performance and innovativeness. Strategic Management Journal, 25(6), 541-562.
Rowlinson, S. (2001). Matrix organizational structure, culture and commitment: a Hong Kong public sector case study of change. Construction Management & Economics, 19(7), 669-673.
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