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Multidimensional organization

Quotes on multidimensional organization

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1960s

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  • The assignment model of linear programming is here extended to allow for dynamic interactions between assigned personnel and positions in each of a variety of possible measures and approaches are explored. These extensions are accompanied by additional remarks and interpretations which are intended to point toward further possible developments that might ultimately open avenues for new approaches to organization design and personnel placement.
    • Charnes, A,. Cooper. W. W. and Stedry, A., "Multidimensional and Dynamic Assignment Models with Some Remarks on Organization Design," Management Sciences Research Report No. 124, Graduate School of Industrial Administration. Carnegie-Mellon University, Pittsburg, Penna., March 1968. (Abstract)
  • Five primary dimensions of organization structure were defined and operationalized; (1) specialization, (2) standardization, (3) formalization, (4) centralization, (5) configuration. From comparative data on these dimensions, in fifty-two different work organizations in England, scales were constructed to measure sixty-four component variables. This made it possible to construct a profile characteristic of the structure of an organization and to compare it directly with that of other organizations. Principal-components analysis was used to help in the interpretation of inter correlations among the scales. The resulting factors suggested four basic dimensions of structure, conceptualized as structuring of activities, concentration of authority, line control of workflow, and size of supportive component. This multifactor result was considered to demonstrate that the concept of the bureaucratic type is no longer useful.
    • Pugh, D. S., Hickson, D. J., Hinings, C. R., & Turner, C. (1968). Dimensions of organization structure. Administrative science quarterly, 65-105.

1970s

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  • Although Dow Corning was a healthy corporation in 1967, it showed symptoms of difficulty that troubled many of us in top management. These symptoms were, and still are, common ones in U.S. business and have been described countless times in reports, audits, articles, and speeches. Our symptoms took such form as:
  1. Executives did not have adequate financial information and control of their operations. Marketing managers, for example, did not know how much it cost to produce a product. Prices and margins were set by the division managers.
  2. Cumbersome communications channels existed between key functions, especially manufacturing and marketing.
  3. In the face of stiffening competition, the corporation remained too internalized in its thinking and organizational structure. It was insufficiently oriented to the outside world.
  4. Lack of communication between divisions not only created the antithesis of a corporate team effort but also was wasteful of a precious resource-people.
  5. Long-range corporate planning was sporadic and superficial; this was leading to overstaffing, duplicated effort, and inefficiency.
Fearing that our problems would become worse instead of better in the future, we undertook major changes in our organizational structure. We turned to a matrix concept of organization-what we later came to call the multidimensional organization.
  • William C. Goggin, “ How the Multidimensional Structure Works at Dow Corning," Harvard Business Review, January-February. 1974. (online)
  • As we first thought of it, the matrix organization was to be two-dimensional. As Part B of Exhibit I suggests, the different businesses in Dow Corning were seen as:
  1. Profit centers. These were the different businesses the company was in. Businesses were defined along product lines-for instance, rubber, encapsulants and sealants; resins and chemicals; fluids, emulsions, and compounds; specialty lubricants; and consumer, medical, and semi-conductor products. In most of the cases each business's product line served a related group of industries, markets, or customers.
  2. Cost centers. These were functional activities and included marketing, manufacturing, technical service and development, and research, as well as a number of supportive activities, such as corporate communications, legal and administrative services, economic evaluation, the controller's office, the treasurer's office, and industrial relations.
    But soon we came to see further dimensions of the system:
  3. Geographical areas. Business development varied widely horn area to area, and the profit-center and cost-center dimensions could not be carried out everywhere in the same manner...
  4. Space and time. A fourth dimension of the organization denotes fluidity and movement through time (see Part D). The multidimensional organization is far from rigid; it is constantly changing. Unlike centralized or decentralized systems that too often are rooted deep in the past, the multidimensional organization is geared toward the future. Long-term planning is an inherent part of its operation.
  • William C. Goggin, “ How the Multidimensional Structure Works at Dow Corning," Harvard Business Review, January-February. 1974.
  • About Geographical areas Goggin further explained:
    "... Part C of Exhibit I shows this dimension. Note that each area is considered to be both a profit and a cost center. Dow Coming area organizations are patterned after our major U.S. organization. Although somewhat autonomous in their operation, they subscribe to the overall corporate objectives, operating guidelines, and planning criteria. During the annual planning cycle, for example, there is a mutual exchange of sales, expense, and profit projections between the functional and business managers headquartered in the United States and the area managers around the world."
  • A useful analysis of how one diversified enterprise has exploited the product cycle by use of a sophisticated version of the multdivisional structure is William C. Goggin, "How the Multidivisional Structure Works at Dow Corning," Harvard Business Review, 52:55-56 (Jan.-Feb. 1974). Louis T. Wells, "A Product Life Cycle for International Trade?" Journal of Marketing, 32: 1-6 (July 1968) suggests how the concept of the life cycle can have strategy implications for multinational enterprise.
  • Die Beschaftigung mit mehrdimensionalen Organisationsstrukturen laBt sich in mehrere Phasen einteilen. In einer ersten Phase wurden Tei/aspekte, wie z. B. Koordinationsprobleme und Fragen der Mehrfachunterstellung, diskutiert. Die Betrachtung mehrdimensionaler Organisationsstrukturen a/s grum1satzlicher Strukturalternative baute aut diesen Uberlegungen aut'). Allerdings setzt eine derartige PrOtung voraus, daB die wichtigsten Gestaltungsprobleme hinreichend untersucht worden sind. Davon kann jedoch allentalls ansatzweise die Rede sein (2). Deshalb soli in dem folgenden Beitrag vor dem Hintergrund einer Oberblicksal1igen Darstellungmehrdimensionaler Organisationsstrukturen etwas naher aut institutionalisierte Konflikte a/s einem wichtigen Problemteld in mehrdimensionalen Organisationsstrukturen eingegangen werden...
  • Mehrdimensionale Organisationsstrukturen sind insbesondere dadurch zu charakterisieren, daB vom Spektrum der zur Gesamtzielerfullung notwendigen Tatigkeiten (Verrichtungen) und del' dam it verbundenen produktmaBigen und regiorialen Belange eine simultane Zuordnung von mindestens zwei dieser Zentralisationskriterien auf mindestens einer Stuteder Unternehmungsorganisation erfolgt (8)...
    • de:Dieter Wagner (Wirtschaftswissenschaftler). "Der institutionalisierte Konflikt in mehrdimensionalen Organisationsstrukturen." in: Zeitschrift fur Organisation.. fur neue Betriebswirtschaft. (1979), 8, S. 421-428
      • (8) de:Knut Bleicher, Organisationsformen, mehrdimensionale. In : Grochla, E. (Hrsg.): HWO, 2. Aufl. Stuttgart 1980,
      • From the same autor: de:Knut Bleicher, Perspektiven der Organisation und Fuhrung von Unternehmungen. Baden Baden und Bad Homburg v. d. H. 1971 , S. 98 f.
  • In 1967, Dow Corning Corporation began an organizational restructuring that spanned the better part of four years. The new organization took a multidimensional approach that integrated profit centers, cost centers and geographic areas worldwide. The change involved movement from a sharply divisionalized structure to a new conceptual design consisting of multi-matrices. The new structure was based on four major dimensions:
  1. Functions (Marketing, Manufacturing, Research, etc.)
  2. Businesses (Arbitrarily selected product groups)
  3. Areas (Geographical entities such as Europe, U.S., Asia, etc.)
  4. Growth, movement and change through time
This meant many changes in personnel (and personal) relationships. It meant most employees dealt with two bosses, and often more. It meant learning new concepts, facing new objectives and making many changes
  • Today, a decade later, it is clear that the multidimensional organization structure has served Dow Coming Corporation well. Consider:
  1. Sales have quadrupled
  2. Profits have increased nearly five times
  3. But population has grown by less than 35 percent
  4. Thus, overall productivity has increased sharply by any of the currently recognized measurement systems
Perhaps the most valuable and significant results of these ten years of initiation, development and operation are the fundamental concepts on which the multidimensional organization - is based. We lay no claim to the originality of these concepts. However, they were the views that were either announced at the outset of the new organizational structure, or were built into the organization as it matured.

1980s

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  • The most significant organizational innovation of the twentieth century was the development in the 1920s of the multidivisional structure. That development was little noted and not widely appreciated, however, as late as 1960. Leading management texts extolled the virtues of "basic departmentation" and "line and staff authority relationships," but the special importance of multidivisionalization went unremarked.
Chandler's pathbreaking study of business history, Strategy and Structure, simply bypassed this management literature. He advanced the thesis that "changing developments in business organization presented a challenging area for comparative analysis" and observed that "the study of [organizational] innovation seemed to furnish the proper focus for such an investigation" (Chandler, 1962 [1966 edition], p. 2). Having identified the multidivisional structure as one of the most important such innovations, he proceeded to trace its origins, identify the factors that gave rise to its appearance, and describe the subsequent diffusion of that organization form. It was uninformed and untenable to argue that organization form was of no account after the appearance of Chandler's book.
  • Oliver E. Williamson (1985). The Economic Institutions of Capitalism. New York: The Free Press. p. 279-280. §2. The M-Form Innovation ; First statement referred to in Strikwerda (2007, p. 4)
  • The leading figures in the creation of the multidivisional (or M-form) structure were Pierre S. du Pont and Alfred P. Sloan; the period was the early 1930s; the firms were du Pont and General Motors; and the organizational strain of trying to cope with economic adversity under the old structure was the occasion to innovate in both. The structures of the two companies, however, were different.
Du Pont was operating under the centralized, functionally departmentalized or unitary (U-form) structure. General Motors, by contrast, had been operated more like a holding company (H-form) by William Durant, whose genius in perceiving market opportunities in the automobile industry (Livesay, 1979, pp. 232-34) evidently did not extend to organization.
  • Oliver E. Williamson (1985). The Economic Institutions of Capitalism. New York: The Free Press. p. 280.
  • Chandler summarizes the defects of the large U-form enterprise in the following way:
The inherent weakness in the centralized, functionally departmentalized operating company, .. became critical only when the administrative load on the senior executives increased to such an extent that they were unable to handle their entrepreneurial responsibilities efficiently. This situation arose when the operations of the enterprise became too complex and the problems of coordination, appraisal, and policy formulation too intricate for a small number of top officers to handle both long-run, entrepreneurial, and short-run operational administrative activities. [1966, pp. 382-83]
The ability of the management to handle the volume and complexity of the demands placed upon it became strained and even collapsed. Unable meaningfully to identify with or contribute to the realization of global goals, managers in each of the functional parts attended to what they perceived to be operational subgoals instead (Chandler, 1966, p. 156)
  • Oliver E. Williamson (1985). The Economic Institutions of Capitalism. New York: The Free Press. p. 280.
  • ...
    • Gerhard Reber and de:Franz Strehl (Ed.). (1988). Matrix-Organisation: klassische Beiträge zu mehrdimensionalen Organisationsstrukturen. Poeschel.

1990s

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  • There are so many aspects and viewpoints to be considered that they cannot be structured in a one dimensional framework. Possible dimensions of a framework for industrial automation can be, amongst others, dimensions of genericity, of applicability, of industrial type, of product type, of enterprise function, together with dimensions for each of these representing ways in which they can change. Dimensions may stand alone but in practice most dimensions are interrelated and are not complete without these relations. It is usual to present different dimensions of a subject on orthogonal axes, so that the axes themselves can be analysed independently and the dependencies can be indicated in the space embraced by the axes. This presentation also allows for the dividing the axes according to subdimensions, thus providing for subspaces.
    • ESPRIT Consortium AMICE., ed. CIMOSA: open system architecture for CIM. Vol. 1. Springer, 1993: H. 2.1. General Description of the CIMOSA Modelling Framework
      • Remark: CIMOSA is one of the first reference models for enterprise modelling, which used the concept of multiple dimension. However, instead of building on previous theory on multidimensional organizations, it defined its own set of dimensions, see also next quote.
  • For CIMOSA three dimensions, from all possible ones, have been selected for their ability to include all the concepts needed for the modelling of an enterprise: (see fig 2.4):
    • one dimension concerned with the life-cycle of the model starting from the statement of requirements to a processable model, this is the dimension of enterprise models,
    • one dimension concerned with the structure and behaviour of a model which considers appropriate aspects of an enterprise, this is the dimension of Views,
    • one dimension concerned with the degree of particularisation which identifies the set of possible models, this is the dimension of Genericity.
...
  • ESPRIT Consortium AMICE., ed. CIMOSA: open system architecture for CIM. Vol. 1. Springer, 1993: H. 2.1. General Description of the CIMOSA Modelling Framework
  • When modelling an enterprise there are many aspects and viewpoints to be examined that" cannot be structured in a one dimensional framework. CIMOSA identifies a three-dimensional framework offering the ability to model different aspects and views of an enterprise (see Fig. 1.6):
    • the genericity dimension is concerned with the degree of particularisation. It goes from genene building blocks to their aggregation into a model of a specific enterprise domain. This dimension differentiates between Reference and Particular Architecture.
    • the modelling dimension provides the modelling support for the System Life Cycle starting from statements of requirements to a description of the system implementation.
  • the view dimension is concerned with system behaviour and functionality. This dimension offers the user to work with sub-models representing different aspects of the enterprise (function , information, resource, organisation).
...
  • Because American corporations are now in a rapidly changing environment, they reorganize frequently. In fact, some appear to reorganize continuously. A great deal of time and energy are consumed in this process. In addition, the possibility of layoffs often associated with reorganization is very unsettling and frequently leads to decreased productivity. Little wonder, then, that reorganization is usually resisted, especially at the lower levels of an organization, where its effects are usually greatest.
    Most institutions and enterprises seek what Donald Schon (1971) called a "stable state." Like a coiled spring, their resistance to change tends to be proportional to the pressure to change that is applied to them. The more turbulent their environment is, the more stability they seek. They do not realize that the only equilibrium that can be obtained in a turbulent environment is dynamic, like that of an airplane flying through a storm. However, reorganization is only one possible way of responding to environmental changes. If it were possible to design an organization that could adapt to change that affects it without reorganizing, then the resistance to change would be significantly reduced. Such an organizational design is possible. Its product is called a multidimensional (MD) organization.
  • The MD concept was originally developed at Dow Corning by its board's chairman and CEO, William C. Goggin (1974). What is presented here is a significant variation on Goggin's theme. To understand how the design presented here eliminates the need to change the basic structure of an organization when faced with significant internal or external change, it is necessary to have a clear notion of what an organization is.
    The need to organize derives from the need to divide labor. To organize is to divide labor and to coordinate it in such a way as to obtain a desired output. The more divided the labor, the more coordination is required. In a typical organization chart the horizontal dimension shows how labor is divided at each level—that is, how responsibility is allocated. The vertical dimension shows how labor at different levels is coordinated and integrated—that is, how authority is allocated.
  • The need to organize derives from the need to divide labor. To organize is to divide labor and to coordinate it in such a way as to obtain a desired output. The more divided the labor, the more coordination is required. In a typical organization chart the horizontal dimension shows how labor is divided at each level—that is, how responsibility is allocated. The vertical dimension shows how labor at different levels is coordinated and integrated—that is, how authority is allocated.
    There are only three ways of dividing labor, hence three types of organizational units:
  1. functionally defined (input) units, the outputs of which are principally consumed or used internally—for example, purchasing, finance, legal, personnel, R&D, building and grounds, industrial relations, and parts manufacturing departments;
  2. product- or service-defined (output) units, the outputs of which are principally consumed or used externally—for example, the Cadillac, Buick, Oldsmobile, Pontiac, and Chevrolet divisions of General Motors;
  3. market-defined units, which are usually defined by the classification of external customers to whom they try to sell the outputs of product- and service-defined units; for example, units defined by the geographic areas they sell in, such as North and South America, Europe, Asia, and African divisions, or units defined by such categories of users as ultimate consumers, retailers, and wholesalers.
Organizations are normally designed from the top down, beginning with the chief executive officer (CEO) and sometimes a chief operating officer (COO)...
  • Most organizations, and corporations in particularly, have all three types of units. There are seldom taken to be equally important, and their importance is ordered in the structure of most organizations. Judgment of that importance is usually based on what is believed to be most essential for survival or success in the organization's current environment: monopolies do not rank user-defined units highly. If product uniqueness is most important, then product-defined units dominate. If costs are the primary concern or if there are very few products involved, functionally defined units are likely to be the most important. In a country that has all functions in each of a number of counties, it is very likely to be organized by regionally defined markets.
    • Russell Lincoln Ackoff. "The Permanently Structured Multidimensional organization," in: Re-creating the Corporation: A Design of Organizations for the 21st Century, 1999. p. 227
    • Remark: This quote is an extension to the 1994 text.

2000s

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  • During the first two decades of the twentieth century, managers at Standard Oil of New Jersey, Dupont, Sears Roebuck and General Motors invented a new way of organizing and managing their businesses. Their creation – the now ubiquitous multidivisional form – involved fundamental changes in the design of the firm. While the most visible change was structuring the organization on the basis of divisions defined by product or geography, rather than functionality, the new form also involved new systems for collecting and recording information, for allocating resources, and for controlling behavior. This new model permitted an efficient solution to the incredibly complicated problem of coordinating and motivating large numbers of people carrying out a complex of interrelated activities, often in different locations...
    • Donald John Roberts (2004). The Modern Firm: Organizational Design for Performance and Growth. Oxford: Oxford University Press Roberts. p. 2
  • The concept of the multidimensional organization has been written about by a number of authors (Ackoff, 1977; Ackoff, 1994; Galbraith, 2005; Prahalad, 1980; Prahalad & Doz, 1979; Reber & Strehl, 1988). However none of the other publications on organization forms, especially Williamson (1985) do mention the multidimensional organization (and neither of the so much discussed matrix-organization). Apparently the concept of the multidimensional organization has got lost in the literature.
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