Chapter 11: Organizational Structure and Controls 359
integrating mechanism, encourages and supports cooperation and the sharing of knowl-
edge, capabilities, or other resources that could be used to create new advantages.^73
Sometimes, liaison roles are established in each division to reduce the time division man-
agers spend integrating and coordinating their unit’s work with the work occurring in
other divisions. Temporary teams or task forces may be formed around projects whose
success depends on sharing resources that are embedded within several divisions. Formal
integration departments might be established in firms frequently using temporary teams
or task forces.
Ultimately, a matrix organization may evolve in firms implementing the related con-
strained strategy. A matrix organization is an organizational structure in which there
is a dual structure combining both functional specialization and business product or
project specialization.^74 Although complicated, an effective matrix structure can lead to
improved coordination among a firm’s divisions.^75
The success of the cooperative multidivisional structure is significantly affected by how
well divisions process information. However, because cooperation among divisions implies
a loss of managerial autonomy, division managers may not readily commit themselves to
the type of integrative information-processing activities that this structure demands.
Moreover, coordination among divisions sometimes results in an unequal flow of posi-
tive outcomes to divisional managers. In other words, when managerial rewards are based
at least in part on the performance of individual divisions, the manager of the division
Figure 11.5 Cooperative Form of the Multidivisional Structure for Implementing a Related Constrained StrategyGovernment
AffairsLegal
AffairsPresidentHeadquarters OfficeCorporate
Human
ResourcesCorporate
MarketingCorporate
FinanceStrategic
PlanningCorporate
R&D LabProduct
DivisionProduct
DivisionProduct
DivisionProduct
DivisionProduct
DivisionNotes:- Structural integration devices create tight links among all divisions.
- Corporate office emphasizes centralized strategic planning, human resources, and marketing to foster cooperation between divisions.
- R&D is likely to be centralized.
- Rewards are subjective and tend to emphasize overall corporate performance in addition to divisional performance.
- Culture emphasizes cooperative sharing.