Cima E2 Exam Question No 2

Question No 2

M is a business that sells custom made computer-based information systems. Each customer order is for a unique system, which will involve experts from many functional areas within M. Each customer expects a high level of individual attention. Some systems take only four to six months to design and produce and cost less than €50,000, whereas other systems cost several million Euros and can take up to three years to complete. Projects are continually being completed and started.
A Management Consultant's review of M's organisational effectiveness has concluded that the matrix structure is the most appropriate for M.

Required:
Identify the characteristics of the organisation that make it appropriate for M to have a matrix structure.


The characteristics of M that are appropriate to it adopting a matrix organisational structure are as follows:

• The business of M consists of a series of projects which are custom made, which are complex and require staff from a number of different functional areas;
• The projects undertaken by M have different start and end dates, so the organisation is continually reassigning resources from project to project as one ends and another begins;
• The projects undertaken by M are complex so the staff benefit from also being assigned to a technical function (such as finance or procurement) where they can share knowledge and experience with colleagues in their functional teams;
• The projects undertaken by M are often expensive, so having resources controlled by functional heads should lead to improved utilisation and reduced duplication across the different projects;
• The projects undertaken by M are customer facing and customers expect a high level of customer focus. Therefore, the customer will require a single point of contact (the project manager) to deal with customer requests and problems.