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Adapting Organizations to Today’s Markets

Today’s markets experience an accelerated pace of change which has brought about a shift in the nature of business organizations. Most firms have shunned the old hierarchical model, with its clean functional divisions and clear lines of authority, and adopted flatter, less bureaucratic structures. They encourage the concept of flexibility to conform to constant changes in the market. The aim is to adapt fast to changes while ensuring that all the components of the organization are able to perform together effectively, without the requirement of a long chain of command. This paper discusses adaptation of organizations to today’s markets by comparing and contrasting four organizational models; line organization, line and staff organization, matrix organization and cross-functional self-managed teams.

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Line Organizational Structures

Line organizational model consists of direct vertical relationship linking the positions at each level with those above and below (Kerzner, 2006). The line relationship provides the channels through which authority flows from its source to points of action. Line organization forms a framework for the entire organization. In effect, the other types of organizations are modifications of it and must rely on it for authoritative action. Line organizations provide direct two-way lines of responsibility, authority and communication moving from the top to the bottom level of the organization; with all people reporting to one manager. All lower cadre employees report to the shift manager, who in turn reports to the general manager. Specialists who offer managerial support are not involved in line organizations (Kerzner, 2006).

Line organizations have been too inflexible in large organizations. In addition, they have few experts to provide advice to people along the line; also have long lines of communication and are unable to handle the complex decisions involved in an organization with more unrelated products. Such firms usually turn to line and staff forms of organization (Anderson, 2009).

Line and Staff Organization

Today, many organizations have adopted both line and staff organizations to reduce the drawbacks of line organizations. Line personnel forms part of the chain of command that is responsible for attaining the goals of the organization. Staff personnel on the other hand, assist and aid line personnel in achieving their goals, for instance; marketing research, human resource management, information technology, and others. Line and staff personnel differ in terms of authority. Formal authority to make policy decisions is vested on line personnel, whereas staff personnel has the authority to advise line personnel and provide suggestions that might influence those decisions; but can’t make policy changes themselves (Kerzner, 2006).

Matrix Organizational Structure

Line and line and staff organizational structures are affected by certain inflexibility. The two organizational structures allow for established lines of authority and communication, and both function well in organizations with relatively static environments and slow product development. They have clear lines of authority and relatively fixed organizational structure. Today’s market is dominated by high-growth organizations. Such organizations experience stiff competition and life span of new ideas is short. Concentration is on product development, special products, creativity, rapid communication and teamwork. Economic, technological and competitive environments are changing (Kerzner, 2006).

Matrix organizational structure grew out of these changes. In matrix organizations, specialists from different parts of the organization are brought together to work on specific projects but still remain part of a line and staff structure. In essence, a project manager can assemble people from different departments to assist in design and market new product ideas (Nickel, 2005).

Matrix organizations contrast other organizational structures in terms of adapting to today’s market as they: allow organizations to emphasize goals that are multiple in nature; accelerates organizations’ reaction to adapt to the changing demands of environment; and facilitates organizational management of information (Nickel, 2005). Matrix organizational model has a common element of dual lines of authority, responsibility and accountability that is contrary to other organizational structures. In essence, matrix structures need organizational departments to have strong horizontal integration through communication and coordination. However, project teams’ matrix organizations are not permanent. They are formed to develop a new product, and then dissolved. It gives little room to cross-cultural learning because specialists from each function are together for little time (Anderson, 2009).

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Cross-Functional self Managed Teams

Cross-functional self-managed teams emerged as a way to structure organizations to attain flexibility as the main objective. This organizational structure answers the disadvantage created by matrix organization. It establishes long-term teams and empowers them to power closely suppliers, customers, and others to quickly and efficiently bring out new, high-quality products while providing great service (Kerzner, 2006). The teams are empowered to make their own decisions without having to seek the approval of management. This structure is necessary due to high technology organizations where creativity and innovation, together with increased product development cycles and need to access market quickly, were vital to remain competitive (Anderson, 2009). Cross-functional self-managed teams are capable of forming and restructuring as the organization changes. It contrasts other organizational structures due to the fact that roles, teams, jobs and titles are no longer built into the organizational structure. The ability of this organizational structure to quickly form teams, set objectives, adapt to change, and construct relationships are all important attributes to changing market (Nickels, 2005).


Organizations must be committed to making plans that are responsive to the marketplace by making decisions based on organizational structures and coordination processes with aim of enhancing the organization’s market adaptation. Today’s organizational structures are required to transform just as the markets organizations serve to evolve. Since it cannot be predicted with certainty in advance the form to which the market will change, the most important attribute to management of organizations is the flexibility of line and staff workers to change to fit with emerging realities. If people are made to understand what is expected of them, they can and will adapt to emerging changes. For organizations to formulate marketing plans that identify competitive edges, which must be exploited before it vanishes, organizations need to have structures that can easily adapt to changed conditions for the purpose of capitalizing on temporal opportunities in the market (Anderson, 2009).


Anderson, D. (2009). Organization Development. London: SAGE.

Kerzner, H. (2006). Project Management. New York: Wiley and Sons.

Nickels, W., McHugh, J., & McHugh, S. (2005). Project Management. New York: McGraw-Hill.

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