Abstract:
This research was aimed at understanding the alignment between strategy and structure of an organisation as an enabler for performance, using the information processing view to compare the the matrix and hierarchical structures that are commonly used by multinational corporations (MNCs). The globalisation effects which have been characterised by hypercompetitive and rapidly changing operating environments, as well as rapid technological advancement, are believed to be contributing significantly to the complexity of doing business for most multinationals that have subsidiaries operating in different geographic locations, since they have to gather, coordinate and process the vast amounts of information available at their disposal. The effective and efficient processing of this information is critical since it necessitates evidence based decision making under these dynamic conditions. The structure of the MNC should therefore be configured in a manner that will facilitate the efficient flow of information within the organisation in order to create an environment that enables evidence based decision making.
There have been mixed views about the superiority of the matrix structure and therefore this research therefore seeks to compare the matrix and the hierarchical structures in order to determine which one has more effective and efficient information processing and evidencebased making capabilities. A quantitative study that was conducted, based on an online survey whose questions and constructs were either developed during the study, or adopted from literature. A total of 148 valid responses were received from MNC subsidiaries operating predominantly in South Africa.
The general empirical evidence from the study showed that there was no statistically significant difference between the matrix and hierarchical structures from an information processing perspective. Both structures presented similar results from an information flow and evidence-based decision making perspective. This presents new findings that have contributed to the body of literature on the alignment of strategy and structure as it argues that the structural design of a matrix organisation, on its own, does not guarantee the successful implementation of its strategy. Other inter-personal factors like corporate philosophy and culture need to be considered to ensure successful implementation.
