Discussion: Networked Organizational Structure

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Discussion: Networked Organizational Structure

Discussion: Networked Organizational Structure

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Cognizant might have moved to the matrix structure (see Figure 3.1) from a hierarchical structure because the complexity of its projects had increased. “As part of the structure of a Cognizant engagement, we always pair our technologists with people who have business context experience,” says Raj Mamodia, who was then the Assistant Vice President of Cognizant’s Consumer Goods business unit. The purpose of these formally structured relation- ships is to meet the customer’s needs, and not just focus on “how beautiful the technology is in and of itself.”5

The matrix organizational structure carries its own set of weaknesses. Although theoretically each boss has a well‐defined area of authority, the employees often find the matrix organizational structure frustrating and confus- ing because they are frequently subjected to two authorities with conflicting opinions. Consequently, working in a matrix organizational structure can be time consuming because confusion must be dealt with through frequent meetings and conflict resolution sessions. Matrix organizations often make it difficult for managers to achieve their business strategies because they flood managers with more information than they can process.

Networked Organizational Structure Made possible by advances in IT, a fourth type of organizational structure emerged: the networked organiza- tional structure. Networked organizations characteristically feel flat and hierarchical at the same time. An article published in the Harvard Business Review describes this type of organization: “Rigid hierarchies are replaced by formal and informal communication networks that connect all parts of the company. . . . [This type of organiza- tional structure] is well known for its flexibility and adaptiveness.”6 It is particularly suited to dynamic, unstable environments.

IS reduce the operating complexity of matrix organizations by allowing information sharing among the different managerial functions. For example, a saleswoman’s sales would be entered into the information system and appear in the results of all managers to whom she reports.


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