Massive Corporation is a technology-manufacturing firm with more than 135,000 employees in its worldwide operations. It currently does business in 85 countries and generates more than $25 billion in revenue. Among its many products are hydroelectric power generators, freight rail cars, computer assembly robotics, and atomic energy plant process controls. The nature of these and its other high-tech products makes it critically important that Massive be on the cutting edge of innovation and that it leverage to the extent possible economies of scale in its research/development and production processes. Massive’s customers pay top-dollar for these big-ticket products, so they are demanding in terms of having the most up-to-date and best-functioning technology. Additionally, because of the nature of Massive’s products, its customers are often either governments or government-subsidized companies; so political concerns frequently come into play during the product sales cycle. Often governments favor suppliers that they perceive as country-friendly and committed for the long term: that, for example, hire local labor, purchase raw materials locally, and maintain an in-country presence—such as a subsidiary—to ensure knowledge of and compliance with local laws and regulations. In thinking about Massive’s competitive environment and what the best structure might be to remain successful, its CEO, Frank Lee Rich, had the following thoughts about the attributes he’d like the company to have: • It must be both global (to be able to offer the finest technology available) and local (to respond to political aspects of the buying-decision process) • It must be both large (to enjoy needed economies of scale) and small (to be nimble in decision making and adjusting to marketplace changes) • It must be both decentralized (to nurture innovation and intrapreneurship) and centralized (in its reporting and control, to insure accountability and consistency in implementation) Considering all the above, Rich thinks that a matrix design might be the way to go in terms of an organizational structure that will let Massive meet its goals and prosper into the future. Answer the following questions about Massive Corporation’s proposed structure. Be sure to state clearly any assumptions you make about the organization as part of the description of factors to consider and state the reasons for including each factor. Use organizational structure language and theory in your response.
1) Is a matrix a good choice for Massive? Advise Rich on the possible advantages and disadvantages of adopting this organizational structure.
2) Assuming that Rich decides to go ahead with a matrixed organization, describe to him, at a high level, what such an organization might look like in terms of business units and spans of control.