The Matrix System at Work - Independent Evaluation Group - World ...

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5. Institutional Issues and Organizational Structure Highlights Incentives of regional sector managers toward regional priorities severely hamper the effectiveness of Sector Boards and weaken their essential corporate functions. There is overlap and fragmentation among some Sector Boards but no mechanism for periodic review of Sector Board and network configuration to keep pace with the Bank’s technical practices. The large span of control of regional managers undermines the effectiveness of the matrix system. The creation of SDN by merging two previous networks has considerably exacerbated the organizational challenges for the Bank under the matrix system. Financial incentives and budgetary rules constrain the operation of the matrix system. Over the FY02-10 period, sector units have received a declining share of the Bank’s budget. The Bank spends 47 percent of its budget on “client services” when trust funds and resource mobilization are excluded. Expenditure on country services is 32 percent of the Bank’s budget, or one in three dollars, for direct costs of lending and non-lending products delivered to country clients. The Bank currently lacks a mechanism for transparent assessment of operational quality independent of line management. 5.1 The overall conceptual rationale of the matrix system remains valid and even more urgent than ever, given the changes in the external environment currently facing the Bank. Client needs have diversified and the growth of regional and corporate priorities and GPG is creating tension with the country model. The Bank’s ability to renew itself and function as a truly global Bank is critical to its success. 5.2 However, several organizational and institutional impediments need to be addressed for the objectives of the matrix system to be realized. The 1997 reforms (of which the matrix system was a major part) have led to greater client responsiveness, but the sector side of the matrix did not succeed in creating global technical practices with world-class knowledge systems. This perception needs to be qualified by the fact that the very strength of the country units and, by extension, the Regions, created an imbalance and undermined the centrality of the sector model 81
CHAPTER 5 INSTITUTIONAL ISSUES AND ORGANIZATIONAL STRUCTURE in the Bank-wide matrix. At the regional level, the imbalance in the relationship between country and sector units created suboptimal tensions giving primacy to short-term client demands over strategic country needs. 5.3 Rather than functioning as a global institution, the Bank is at risk of evolving into six regional banks. Regional variations in structure and processes compound the problems arising from insufficient inter-regional flows of knowledge and expertise. Sector configuration has varied across Regions and over time in terms of the sector groupings within SMUs or sector departments (for example, the bundling of FPD with PREM in some Regions but not others; environment with water in one, urban with water in others, and so on) and the cost centers, some recording budgets at the SMU level, others at the sector department level. The role of the country sector coordinators—who coordinate network activities in each CMU—also varies across Regions and networks. And norms and procedures for quality assurance differ significantly. In East Asia and the Pacific, until July 2011, country directors chaired concept review meetings and sector directors chaired the decision meeting, while in the other Regions, sector directors have had no formal role in the quality assurance process. Regions also vary in the use of QERs, some (such as South Asia and Africa) relying on them more systematically for quality, others infrequently. 5.4 5.5 Some of the inputs and rules put in place to manage the matrix system need revamping to enhance the relevance and effectiveness of the matrix. The current distortions cannot be resolved by tinkering at the margins if the objectives of the matrix system are to be achieved. Major changes are needed, explicitly targeting the key problems among existing structures that are barely coping with operational demands. Addressing these organizational constraints may require “lateral thinking” (De Bono 1967) 57 to find creative solutions lying beyond the range of current assumptions and practices. 5.6 In this chapter we focus on a few of the reform inputs—listed in the horizontal row at the top of the evaluation framework (see chapter 1)—where organizational effectiveness issues that merit further examination have emerged from the evaluation’s findings. The chapter begins with a summary of the key organizational and institutional impediments—the Sector Board model; and span of control issues and the effects of network restructuring that affect the regional and Bank-wide matrix systems; financial and budgetary issues; and quality assurance arrangements. These cover four of the six boxes in the row of reform inputs in the evaluation framework. Decentralization and HR processes require much more indepth analysis and have been left out of this evaluation 82
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The Matrix System at Work An Evalua
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©2012 Independent Evaluation Group
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Costs of Country and Sector Strateg
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Table 3.6. Total Cross-Support Sold
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Abbreviations AAA AFR ARDE ARPP BET
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Glossary Term Anchor sector directo
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GLOSSARY Practice managers (PM) Reg
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Overview The Matrix System at Work
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OVERVIEW rather than on the 1997 ma
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OVERVIEW satisfactory or better in
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OVERVIEW toward capacity building a
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OVERVIEW Innovation in the field is
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OVERVIEW Figure D. Outcomes of Bank
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OVERVIEW modernization in the corpo
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OVERVIEW management structure but t
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OVERVIEW Structure Bank-wide matrix
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MANAGEMENT RESPONSE interest and ow
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MANAGEMENT RESPONSE Management cons
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MANAGEMENT RESPONSE that reach far
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CHAPTER 1 INTRODUCTION AND CONTEXT
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2. The Strategic Alignment of Secto
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CHAPTER 2 THE STRATEGIC ALIGNMENT O
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Page 152 and 153: Appendix A Matrix Management and Or
Page 154 and 155: APPENDIX A MATRIX MANAGEMENT AND OR
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APPENDIX C RESPONSIVENESS AND EFFEC
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APPENDIX C RESPONSIVENESS AND EFFEC
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APPENDIX D EXPERIENCE IN THE TRENCH
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Appendix E Key Findings from Sector
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APPENDIX E KEY FINDINGS FROM SECTOR
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Table E.1. Country Directors and Ma
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# Other Questions Q # 7 APPENDIX E
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APPENDIX F FOCUS GROUP DISCUSSIONS:
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APPENDIX F FOCUS GROUP DISCUSSIONS:
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Appendix G Comparison of the Six Re
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APPENDIX G PROFILES OF THE BANK’S
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Appendix H Working across Organizat
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APPENDIX H WORKING ACROSS ORGANIZAT
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Appendix I Budgetary Incentives 65.
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APPENDIX I BUDGETARY INCENTIVES Bud
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APPENDIX I BUDGETARY INCENTIVES 72.
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APPENDIX I BUDGETARY INCENTIVES com
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APPENDIX I BUDGETARY INCENTIVES Fig
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APPENDIX I BUDGETARY INCENTIVES mea
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APPENDIX J WORKING ACROSS SECTORS A
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Appendix K World Bank Sector Strate
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APPENDIX K WORLD BANK SECTOR STRATE
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APPENDIX K WORLD BANK SECTOR STRATE
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Appendix L International Finance Co
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APPENDIX L IFC 2013 CHANGE INITIATI
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APPENDIX M STAFFING DATA Note: Head
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APPENDIX M STAFFING DATA Table M.7.
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Appendix N Managers Interviewed Nam
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References Barnett, Michael N. and
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REFERENCES Sy, Thomas and Laura Sue
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Endnotes 1 See Wapenhans 1992, 1994
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ENDNOTES appropriately assessed by
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ENDNOTES 46 The respondents to this
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ENDNOTES 71 See Safeguards and Sust
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