The Matrix Organization Essay
Matrix organizational structure is a technique of managing an organization or more commonly, part of an organization through a series of dual-reporting relationships instead of a more traditional linear management structure. In contrast to most other organizational structures, which arrange managers and employees by function or product, matrix management combines functional and product departments in a dual authority system.
In its simplest form, a matrix configuration may be known as a cross-functional work team, which brings together individuals who report to different parts of the company in order to complete a particular project or task. The term “matrix” is derived from the representative diagram of a matrix management system, which resembles a rectangular array or grid of functions and product or project groups. In a matrix organization, each project manager reports directly to the vice president and the general manager. Since each project represents a potential profit centre, the power and authority used by the project manager come directly from the general manager.
At a more detailed level the advantages that most organizations seek through using a matrix organization structure include At the heart of human resources management lies the need to establish a linkage between Business Strategy and a Strategic Human Resources Management (SHRM). This is based on the argument organisational and personnel structures and systems should be designed to support or “fit” the strategy of the organisation, along with employee management system that creates commitment to organisational goals will lead to organisational performance. (Mabey, Salaman et al, 1998). Wright and McMahan (1999) have defined SHRM as the pattern of planed human resource deployments and activities intended to enable an organisation achieve its current and future goals and business needs within its external and internal environment.
Authors like Hendry and Pettigrew have pointed out the need to move from prescriptive theorising and armchair exercise to empirical analysis of the connections between SHRM and corporate strategy where matching is not the issue but a sensitivity to to the opportunities and constrains afforded for the development of HRM that emerge from complex patterns of strategic and structural change.(cited in Legge,1995). This essay seeks to audit Edexcel Foundation against the resource-based view (RBV) of strategic human resource management (SHRM) on issues of strategy, structure, culture, selection, training and development.
1.1 Edexcel Foundation Edexcel Foundation is one of the leading examining and awarding bodies in the UK. It was formed by the merger of BTEC and University of London Examinations and Assessment Council (ULEAC) in 1996. It brought together two very different organisations, each with its own strategy, culture and personnel practice. It is a charity with approximately 750 staff, 14000 contractors who work as examiners, moderators and external verifier. The Edexcel HRS aims to maximise the contribution and development of the people employed by Edexcel. This is essential to for continued success as people costs constitute two thirds of total business costs and our results and susses depend on the quantity and motivation of its total workforce, which is made up of permanent, temporary, seasonal staff, and assessment associates.
The central philosophy in Edexcel’s Human Resource strategy is that the way people are managed and how it is translated into personnel policies and practices such as recruitment, selection, training and reward, should be aligned and integrated with business strategy as the basis of superior performance. 2.0 The Resource based view The firm according to the resource based view is a bundle of tangible and intangible resources required for product and market competition.(Kamoche, 1996).
Those tangible and intangible resources includes “skilled manpower, reputation, brand name, ability of managers to engage in teamwork, technological know-how, working practices”(Mueller,1998). The resource-based view (RBV) is concerned with actions, process and related behavioural efforts to attain a competitive posture (Kamoche, 1996). The model is a holistic one, which recognise the people in an organisation as the key to competitive advantage, rather than just the way of implementing organisational strategy.
Competitive advantage as been described by Barney (1991) as “when a firm is implementing a value creating strategy not simultaneously being implemented by any current or potential competitor”. He adds that the competitive advantage only becomes sustained after all efforts to imitate that advantage as ceased. Thus, Barney’s RBV model argues that human resources must be value added, rare, non-substitutable and imperfectly immutable to have the potential to generate sustained competitive advantage.
2.1 Strategic Human Resource Management in Edexcel Foundation Strategy as been defined as a “firm’s framework of critical ends and means or” as a strategic paradigm (Johnson and Scholes). This implies that competitive strategy, human resource strategy, structural strategy, organisational developmental strategy and all other choices are all systematically interlinked in a systemic manner should be seen as important in relation to business performance. (Boxall, 1999).
A key element of Edexcel human resource strategy is to ensure a consistent approach in the alignment of its vision, values, business objectives, core strategy and strategic intent. Edexcel’s strategic intent is to be known as a provider of educational solutions of the highest quality with the aim of creating a sustainable market position and a secure revenue stream at the same time managing cost base down to a level which allows for future investments; to become a customer centred organisation in terms of its people, products and process and building one Edexcel team through greater responsibility, accountability and leadership.
To achieve this intent, the HRS has to be owned and implemented by the whole organisation. This develops a spirit of partnership and co-determination. Deliberate incremental choices must be made concerning the way employees including temporary and seasonal staff as well as assessment associations and suppliers are managed in relation to Edexcel’s business needs besides developing the human capability of the company to meet the current and future needs of its external and internal environment.
Legnick-Hall and Legnick-Hall have argued that ‘firms that have a strategy formulation process that systematically and reciprocally considers human resources and competitive strategy will perform better over the long term than firms that manage human resources primarily as a means to solve competitive strategic issues’. Supposedly it can be said that Edexcel recognises that the skills and motivation of its people and the way it is deployed is a major source of its competitive advantage. This leads to the point of directly examining this belief against the resource base view.
The RBV is based on the assumption that a firm is heterogeneous (Penrose, 1959) and that competitive advantage can be gained as a result of this distinct capabilities arising from the nature of an organisations relations with its customers, employees and suppliers.(Kay, 1993). This condition also requires for a diverse demand for labour. The firm has the jobs that require different skills as well as a heterogeneous supply of labour or individuals who differ in their skills and level of skills.