- Tight budget;
- Strict control;
- Performance based incentive systems;
- Control of financial assets such as inventory and accounts receivable;
- More coordination across functions and among manufacturing facilities;
- Major changes in plant manager’s job.
Large companies tend to be complex. Unfortunately, many of such companies, according to Peters and Waterman, respond to complexity by designing complex systems and structures rather than simple ones. A favourite candidate for the wrong kind of complex response is the matrix organization structure. For a multiproduct, multi-location and multi-market company, with several functional departments, a four dimensional matrix may be a normal choice. However, such a matrix is a “logical mess”. The matrix is quite confusing: “people aren’t sure to whom they should report for what. The most critical problem, it seems, is that in the name of “balance”, everything is somehow hooked to everything else. The organization gets paralysed because the structure not only does not make priorities clear, it automatically dilutes priorities. In fact, it says to people down the line: “everything is important; pay equal attention to everything”.
- Emerson Electric has 54,000 employees, with fewer than 100 in the corporate headquarters.
- Dana employs 35,000 employees and has cut its corporate staff from about 500 in 1970 to around 100 by 1982.
- Schlimberger, a $ 6 million diversified oil service company, runs its worldwide empire wth a corporate staff of 90.