Project manager works like a project coordinator or project expeditor. Preparing for PMP Certification Exam? Certain capabilities or factors of an organization can be both a strength and weakness at the same time. However, the structure seems to have been more popular during the 1970s and was deemed more diluted and complex by the 1980s. PMI®, PMBOK® Guide, PMP®, PMI-RMP®, PMI-PBA®, CAPM®, PMI-ACP®  and R.E.P. The main benefit of matrix organization is that highly skilled and capable resources can be shared between the functional units and important strategic projects. Successful Businesses which use the Matrix Organizational Structure. Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Texas Instruments   in those markets. Good Returns on Capital Expenditure – Texas Instruments is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams. They are just awesome. Some successful organizations which have used a Matrix Organizational structure include; Phillips, Caterpillar, and Texas Instruments have all used the Matrix Structure at some point in time. It has come across as a mature firm looking forward to bring out products based on tested features in the market. SWOT analysis is a vital strategic planning tool that can be used by Texas Instruments managers to do a situational analysis of the organization . It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Texas Instruments managers can focus on the most critical factors and discount the non-important one. The matrix developed as a natural evolution of organizational structures in answer to a very definite real-world need. Project Management Limited success outside core business – Even though Texas Instruments is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture. ULTIMATE GUIDE for Preparing PMI-ACP Certification Exam [Don’t Miss It!! Project Coordinator, Project Expeditor, Project Leader, Split focus between project and function responsibilities, A Functional Manager but shares authority and power. As one of the leading companies in its industry, Texas Instruments has numerous strengths that enable it to thrive in the market place. Conflict between the project manager and the functional manager must resolve as early as possible, and in private. It is a useful technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Texas Instruments is facing in its current business environment. Superb Performance in New Markets – Texas Instruments has built expertise at entering new markets and making success of them. SWOT is a static assessment - analysis of status quo with few prospective changes. It is a good environment for professionals to develop their career. Logo are registered trademarks of the Project Management Institute, Inc. Preparing for Certified Associate in Project Management (CAPM)® Certification Exam? Power enjoyed by the functional manager completely. This brand portfolio can be extremely useful if the organization wants to expand into new product categories. The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Texas Instruments to increase its profitability. There are opportunities for employee growth. A matrix is an organizational structure that shares power among two or more dimensions. Java In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. In a strong matrix organization, many of the same attributes for the project team exits, but project manager gains power and time when it comes to project work. S/he reports to the functional manager for daily work functions while reporting to the project manager on … Power is enjoyed by the project manager Low bit more than the functional manager. Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations. As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world. Matrix organization is blend of functional and projectized organization. WO (weaknesses-opportunities) Strategies. It represent a great opportunity for Texas Instruments to drive home its advantage in new technology and gain market share in the new product category. Organizations must communicate their vision, objectives and goal with the employees. New environmental policies – The new opportunities will create a level playing field for all the players in the industry. Project team can get the highly skilled personnel they require. Employees are classified according to their function in this structur… A matrix type of organisational structure combines the traditional departments seen in functional structures with project teams. 5. Cloud Editable matrix org chart template to quickly visualize your cross functional teams. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors. Try Our Project Management Professional (PMP)® Certification Free Test. That saves the company money because they’re able to reduce waste, eliminate duplication, and streamline job functions. It leads to a 2X2 matrix – also called SWOT Matrix. Many times in matrix organizations, workload is high. Costco Wholesale Corporation primarily has a weak matrix organizational structure. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical. Balanced Matrix Structure and New Product Development Process at Texas Instruments Materials and Controls Division . Matrix structures can help provide both flexibility and balanced decision making, but at the price of complexity. First, the geographic divisions make it possible for the firm to meet the specialized needs of different customers in different countries. Rather than cite a matrix structure as the problem, leaders would be better served by mitigating the risks and augmenting the benefits through sound organizational design that considers both. Here’s the complete preparation guide to pass this CAPM Certification Exam! Interview Preparation Stable free cash flow provides opportunities to invest in adjacent product segments. SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the organization such as – marketing, finance, operations, management information systems and strategic planning. This is because a Matrix structure … Weakness are the areas where Texas Instruments can improve upon. Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Texas Instruments. Its objective is to carry out operations smoothly and efficiently. 3. Automation of activities brought consistency of quality to Texas Instruments products and has enabled the company to scale up and scale down based on the demand conditions in the market. https://www.project-management-skills.com/organizational-structure-types.html The functional manager manages the project budget and staffing. This should open a window of opportunity for Texas Instruments in other product categories. The matrix organization structure is a balanced combination of several organizational structures to achieve higher efficiency in their dealings. Right now the investment in technologies is not at par with the vision of the company. Project expeditor works only like communicator point between the customer and team. High attrition rate in work force – compare to other organizations in the industry Texas Instruments has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees. Matrix Management Too Many Chiefs & Not Enough Braves –Anti Pattern A matrix management is where an employee reports to both the functional as well as the project managers. . With a matrix organizational structure, one worker can be in charge of all the customer service experience needs across all the departments because their experience can be pulled by all three departments. The profitability ratio and Net Contribution % of Texas Instruments are below the industry average. ABB is renowned for its organization structure of global matrix that balance the global business focus of each business areas (BAs) with the national market focus of 1,300 local companies grouped under the umbrella of several country-based holding companies. So, join us today and take a step ahead towards bright project management career! Power enjoyed by the functional as well as project manager in the same manner. Buy Professional PPT templates to impress your boss. New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories . Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance. Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Texas Instruments’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share. There are three types of matrix organizations: The power of the project manager differs in these three matrix organizations. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Since these authorities flow downward and sideways, this structure is called a matrix organization structure.Employees may report to many managers in a matrix orga… Rising raw material can pose a threat to the Texas Instruments profitability. PM can utilize his or her project management skill on the projects. It is also the most confusing and the least used. All rights reserved. Also, an employee may be part of multiple departments and may have multiple managers. The matrix organization structure was developed out of the requirement to answer a need. Generally matrix organizations have more managers, which make overhead cost very high. The organizational chart of Texas Instruments displays its 48 main executives including Richard Templeton, Haviv Ilan and Bing Xie The market development will lead to dilution of competitor’s advantage and enable Texas Instruments to increase its competitiveness compare to the other competitors. The SWOT analysis of Texas Instruments just underlines this fact. In this case, the structural design involves intersections among various components of the business. Write CSS OR LESS and hit save. M. E. Porter, Competitive Strategy(New York: Free Press, 1980), A. D. Chandler, Strategy and Structure (Cambridge, Mass. While a matrix structure may not be the best fit for every organization, it is important to see every organizing dimension (including a matrix) as a choice with both benefits and risks. The structure of the organization has an impact on how information, resources and operations are conducted. 29 of Nestle’s brands have annual sales of over 1 billion CHF (about US$ 1.1 billion), including, Nescafe, Kit Kat, Nespresso, Smartie… It’s best suited for work environments that are dynamic, as hybrid structures shift from project to project and move resources around to meet a particular goal. Matrix is one of several different organizational structures that employers may adopt. Matrix management is an organizational structure in which some individuals report to more than one supervisor or leader, relationships described as solid line or dotted line reporting. It is not clear – whom to report and who is the real boss. The SWOT Analysis framework helps an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. According to the PMBOK Guide, the matrix organization is a combination of the projectized and the functional organization structures.The authority of a functional manager flows vertically downwards, and the influence of the project manager flows sideways. Need more investment in new technologies. Project expeditor works only like communicator point between the customer and team. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain. In this structure, most team members have two bosses – one a functional or geographic manager, and the other a product or business line manager. If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics. The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term. Nobody get fired for buying our Business Reports Templates. A matrix or hybrid structure is an organizational model that combines two or more reporting structures, usually functional and product. “S ICON KEY Valuable information Exercise B Group Discussion Reading . Other Technical Queries, Domain Texas Instruments maintains its dominant position in market by carefully analyzing and reviewing the SWOT analysis. In a weak matrix organization, the project manager is a part-time role. Starting just $19. Project manager works like a project coordinator or project expeditor. The organization becomes more flexible as the employees have to work under multiple … A person or several persons are selected from different department to communicate with others department. The project team may also have more time available for the project even though they may come from multiple departments within the organization. Sometimes unclear priorities may also confuse the employees. Each is headed by a functional manager and employees are grouped as per their role. A bag manufacturer like Channel was divided into the sales and distribution, financial accounting, and production departments. Big Data PM can take decision on the allocation of the resources. PRINCE2® is a [registered] trade mark of AXELOS Limited, used under permission of AXELOS Limited. 5. ST (strengths-threats) Strategies. Organization’s core competencies can be a success in similar other products field. You can customize it online to reflect your organization. Typically the efficiency of matrix organizations is higher. Even though Texas Instruments is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. The matrix organizational structure is a mix of two other organizational structures, the project system, and the functional system. A matrix organizational structure is a company structure in which the reporting relationships are established as a matrix. In a matrix structure, individuals work across teams and projects as well as within their own department or function. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions. Starbucks has a matrix organizational structure, which is a hybrid mixture of different features from the basic types of organizational structure. Matrix structure. One issue … The need was for an organizational form capable of managing the recent very large and very complex programs, projects, and problems, and for managing limited resources. The matrix structure cancels out the extremes of the two structures to balance them somewhere in between. The certification names are the trademarks of their respective owners. The Philosophy and the Structure of Matrix Organization . There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies. Functional managers have experience in the roles they supervise. This is one of the. Strong Brand Portfolio – Over the years Texas Instruments has invested in building a strong brand portfolio. Conflicts may arise between the bosses regarding the power and authority. Send your data or let us do the research. 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Given the scale of expansion and different geographies the company is planning to expand into, Texas Instruments needs to put more money in technology to integrate the processes across the board. 2. Resources working on the project face a complex communication. The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Texas Instruments to develop four types of strategies: The primary purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect Texas Instruments strengths, and eradicate its weaknesses. Team needs to work in project work as well as routine work. This ensures that employees are using their skills effectively. Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. You can email us to get an example document of Weighted SWOT analysis. Advantages of Starbucks Organizational Structure. © Copyright 2020. Project manager reports to functional manager. O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975); L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970), R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986). Strong matrix equates to a strong project manager. They manufactures a variety of products, for project, they will name in Model 1, Model 2, Model 3, and so on. SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself. More broadly, it may also describe the management of cross-functional, cross-business groups and other work models that do not maintain strict vertical business units or silos grouped by function and geography. Order custom Harvard Business Case Study Analysis & Solution. Therefore a weak or rigid organizational structure cannot be adequate to bring success all the time. Project manager reports to functional manager Fern Fort University. There must be close cooperation between the project manager and the functional manager to avoid confusion and conflicts. Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales. An organization can be arranged according to a variety of structures, which enable the organization to operate and perform. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines. Based on Fern Fort University extensive research – some of the strengths of Texas Instruments are –. Well-defined and strong communication is very important to gain support from executives, managers, and employees. Team reports to both functional and project manager. When it comes to matrix organization, think “Two Bosses”. It helps organizations in achieving their business objectives. Many exporting options to … The key difference between matrix structure and functional structure is that matrix structure is a type of organizational structure where employees are grouped concurrently by two different operational dimensions whereas functional structure is a s… A weak matrix organizational structure is similar to a functional structure -- where authority is primarily held by the functional manager.But in the strong matrix structure the functional manager still holds some management and resource authority. Matrix Structure . With more cash in bank the company can invest in new technologies as well as in new products segments. New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future. Communication also flows from team to two bosses. Here’s how to prepare for PMP Certification Exam. The organizational structure that tries to balance both the above structures is called Matrix Management. The new technology provides an opportunity to Texas Instruments to practices differentiated pricing strategy in the new market. This method is called Weighted SWOT analysis. The marketing of the products left a lot to be desired. Successful track record of integrating complimentary firms through mergers & acquisition. Nestle is a Swiss multinational nutritional and health-related consumer goods company headquartered in Vevey, Switzerland. A matrix organizational structureis a company structure in which the reporting relationships are set up as a grid, or matrix, rather than in the traditional hierarchy. 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