Making the matrix work : how can conflict be managed when introducing the matrix organization structure in growth markets; a case study in the Middle East

Abstract

The introduction of the matrix organization structure leads to both advantages and disadvantages. This study investigated how to manage conflict, as an outcome of introducing the matrix structure, with a specific focus on the Middle East growth market. The nature of conflict to be managed is the negatively perceived conflict with destructive impact, bearing in mind that conflict in its normal form is a desired outcome of the matrix that can be positively utilized. The study applied the grounded theory building method, in view of the limited research data available on the Middle East region. The research followed the iterative approach, where the scope of the study eventually developed and expanded to include several categories, based on the continuous flow of slices of data and analyzing such data. Such categories included organization development interventions (ODIs), culture and leadership, following the outcomes of the in-depth interviews conducted in the pilot study. The research findings and conclusions suggest that the introduction/implementation of matrix organization structures in dynamic growth markets like the Middle East is unlikely to be successful in the traditional form. Managers perceive it as hindering to the business. To make the matrix structure work, managers apply a variety of creative approaches, building on loose coupling, sense-making and sense giving. They deploy personal capabilities, influential games and cultural tools, which in essence break all matrix rules. Transition to a matrix structure should be done gradually, building on local leaders’ experience as champions. The company should introduce ODIs at early stages and ensuring effective orientation and alignment on basic decision rules. Implications for business can be quite significant for multinational firms interested in expanding the business to the emerging markets including the Middle East. The matrix model needs either to be modified or even abandoned in the early stages of business growth, to ensure local managers’ endorsement and acceptance. Companies are encouraged to use methodological approaches such as the grounded theory in providing solutions for contextual issues in real life. The research provides room for a strategic approach to market entry models, taking into consideration various elements including leadership, national and professional cultures as well as market dynamics. This approach is represented in the form of a conceptual framework proposed for market entry. This would affect the training and development models adopted by companies as well as the development of innovative ODIs that cover specific market needs.