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CHAPTER 5 INSTITUTIONAL ISSUES AND ORGANIZATIONAL STRUCTURE Key Findings and Conclusions 5.57 Imbalance in the regional matrix. At first glance it appears that one of the two objectives of the Bank’s matrix system—enhancing client responsiveness—has been achieved but that the sector side of the matrix did not succeed in creating global technical practices with world-class knowledge systems, delivering quality services. The very strength of the country units created an imbalance in the regional matrices. The imbalanced relationship between country and sector units created suboptimal tensions giving priority to short-term client demands over longer-term strategic needs. This is reflected in the weaker results on realism, broader country ownership, and implementation in country programs. 5.58 Imbalances also exist in the Bank-wide matrix. The very strength of the regional matrices weakened the networks and consequently the Bank-wide matrix. The design of Sector Boards appears to have been resulted in the overburdening of regional sector managers, who have little incentive, time, or resources to perform the multifarious corporate roles expected of them. A more realistic sharing of responsibilities and accountabilities between the sector directors and sector managers might have enabled a more realistic design of the sector units. Further, the sector anchors took on additional corporate and global tasks that diverted attention from their ability to support frontline operations in the Regions. 5.59 Subsequent changes added stress to the matrix design. The matrix system has not been able to adapt to issues arising out of span of control or subsequent organizational restructuring. The merger of SDN forced the Regions to adopt second-best or, in some instances, third-best solutions that varied across the Regions. The broadening of the sector scope of responsibility overburdened sector units limiting their ability to ensure knowledge flows and quality services. And the checks and balances created by the existence of a quality assurance system, independent of line management, disappeared. 5.60 Finally, the matrix system also suffered from the absence of a shared set of organizational objectives with clearly identified indicators to monitor progress. At the end of FY11, management introduced a Corporate Scorecard to track results. A complete assessment of the scorecard is beyond the scope of this evaluation. The viability of the instrument will depend on the realism and transparency of the indicators and the alignment between the indicators of organizational effectiveness and modernization (Tier 4 of the Corporate Scorecard), the Bank’s development effectiveness, and country results supported by the Bank. 103
6. Conclusions and Recommendations 6.1 Despite the many positive aspects of the 1997 reorganization and improvement in client-responsiveness and in country-level outcomes during more recent years, the general conclusion of the evaluation is that the creative tensions and balances sought by the reorganization—between country and sectors, and between the Regions and networks—have not been achieved. Nor has the Bank succeeded in elevating its knowledge work to capture innovations from the field and sharing Bank and global knowledge across the institution. The matrix system, which was predicated on collaboration and teamwork among Regions and sectors, left intact or strengthened the existing incentives and underlying organizational culture. Coupled with the drive for decentralization, the matrix has strengthened regional operations while weakening linkages to the network anchors, and has served to maintain organizational silos and competition among the Regions and networks. 6.2 In addition, a critical risk factor is looming: the erosion of the Bank’s global primacy in development knowledge, partly caused by short-term lending pressures and the concomitant disincentive to the internal transmission of knowledge, and more so by the recognition that the Bank is not the primary producer of development knowledge. The Bank’s Knowledge Report recognizes that the Bank’s ability to connect its staff and country clients to global knowledge and customize that knowledge to make it relevant to country conditions is as critical to the preservation of the Bank’s operational relevance as is its ability to produce relevant knowledge. Unless the Bank significantly modifies the means and incentives to ensure efficient sharing of Bank and external knowledge through better connectivity with global knowledge, the institution risks losing global relevance on both the knowledge and the lending side. Such a prospect cannot be averted by addressing only one part of the Bank’s interdependent system. 6.3 There is widespread recognition that the benefits of the matrix system have in significant ways not been realized and have led to some substantial costs. It does not follow, however, that the matrix system should or indeed can be done away with. Changes in the external environment indicate that the matrix system is even more relevant today than when it was introduced. Client needs have diversified, with greater differentiation among countries, even within the Regions; the growth of GPGs and corporate priorities is creating tensions with the country model; demand for cutting-edge knowledge is growing both to enhance the quality of lending and as a growing business line for policy and program advice to clients; new global practices have emerged to meet needs such as information, communication and 104
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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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CHAPTER 3 THE PROMISE OF A KNOWLEDG
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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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