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View PDF - Stern Stewart Institute

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Arne Allée & Konstantin WronaGrowth in the Eye of the Stormpage37Organizations that target and have to cope with growthand growing business complexity seem to call for evenmore complex matrix organizations. One-third of therepresented companies is already organized that way. Anda mere 1 percent operates in a regional organization.However, the participants expressed skepticism towardsmatrix organizations. An organization that is too complexwith overlapping responsibilities was thought to divert attentionaway from core aspects such as customers,cultural differences and quick decision-making.»Everybody talks about responsibilitiesregarding functions; nobody talksabout customers.«There was a great deal of uncertainty about how to makean organizational change work while at the same time51 percent of the audience thought that they will haveto change their organizational setup eventually. Not havingtotal confidence in today’s organizational principles,participants still expressed reluctance to change it now. Thepanel discussion then went on to emphasize people, theirpersonalities and culture since global expansion givescultural differences a more important role while, at thesame time, the broadening education of emerging marketmanagers in Europe and the US also actively changes theirsocieties when they come home.While only a minority (19 percent) expressed their viewthat complexity is not a given at all, only 40 percent wouldattribute this to external factors such as market or governance.An overwhelming 85 percent is convinced that theactual degree of complexity in their companies doesn’tharm reaction speed, but almost the same majority(74 percent) is sure that complexity is hurting success.There are techniques to manage complexity and keep costsin check such as creating shared service centers thoughnot all panelists were sure to have them at their disposal.Keeping structures such as legal entities, products andbusiness models low seemed to be a good starting point.Consequently, there is an upcoming issue of the trade-offbetween growth, organizational complexity and culturalmatters that has been recognized but not fully addressedlet alone solved. ✺»Fast decisions are made but how fastare they implemented?«»We hire people for their abilities andfire them for their personalities.«

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