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Case Study-DHL Bangladesh
Advantages associated with having a matrix structure in an Organization
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Abstract
1. More cost effective solutions for manpower optimization
There are a number of organizational mechanisms which are unavailable under a one-
dimensional organization. Even if the mechanisms are available, they may be too costly to
utilize.
Under a matrix structure, there is always a ‘budget breaking’ (Raviv, 1979) advantage
available. For example: If a bank has three units, one of which is specialized in cash
management, second in trade financing and third one in data processing (Hunter), then under
a matrix structure, the bank can improve the overall service quality by coordinating the
various units amongst themselves. Such kind of coordination also promotes mutual learning
and in turn results in tremendous quality control and cost savings for the organization as a
whole.
2. Better dispute resolution
In case of a matrix structure, the higher management function as arbiters when any kind of
conflict arises between the lower managers. The presence of higher level managers speeds-up
the process of dispute resolution along the chain. Moreover, as the lower level managers also
have an authority above to report, this prevents them from acting opportunistically (Roberts,
1990).
In case of a dispute involving root level employees, there is an immediate manager who
knows the actual case very well, which is not possible if the manager is high up in the
hierarchy. This also allows for better resolution of conflicts.