Must companies stop trying to organize cross-organization work ? The Nortel Case


Nortel announced they were going to give up their complex matrix organization to focus on their business units. The purpse is to act faster, making decisions as close as possible to the market. Making decision close to the marketin reminds me of either SOO or subsidarity at a time when but is it a pure coincidence, I see many companies trying to tackle the question of empowerment.

The post where I got the information is wondering about the efficiency of going back to a vertical model. What can we think about that ?

A priori, matrix management is made to add a cross-organization side in a vertical organization. If the first is taken off, then only the second remains.

Another analysis may also make us say that what causes heaviness is not cross-organization work but the many things it needs to work as it supposes another coordination level which adds to what is necessary to verticality. And when a choice has to be made, since production is vertical by nature, it’s easy to guess what will be  cut.

But does lack of horizontality means verticality ? We can imagine that horizontality remains possible as unique processes or adhoc organization when necessary, under the form of a service oriented organization or a wirearchy.

Whatever, giving people more autonomy and bring decisions closer to where needs appear seems to be an heavy trend that also means production is now not anymore viewed as a push process but as a pull one. This makes possible to build more agile organization, cut useless coordination costs, and focus people on clients.

Following this logic, if tomorrow’s organization is “pulled” by the client, in order to be efficient, transversality must not be “pushed” anymore but pulled according to employee’s need which may explain the end of its “official” existence.

There’s a question that remains answerless : will Nortel be happy with this organizational cleaning or will be things done in order to help people being more autonomous ? Doesn the end of horizontality means the return of empowerment ?