In search of the matrix advantage: A reexamination of the fit of matrix structures to transnational strategy

Lex Donaldson

doi:10.1108/S1571-5027(2009)0000022005

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Advances in International Management

ISSN: 1571-5027
Series editor(s): Timothy Devinney, Torben Pedersen and Laszlo Tihanyi

Subject Area: International Business

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In search of the matrix advantage: A reexamination of the fit of matrix structures to transnational strategy

Document Information:
Title:	In search of the matrix advantage: A reexamination of the fit of matrix structures to transnational strategy
Author(s):	Lex Donaldson
Volume:	22 Editor(s): Joseph L.C. Cheng, Elizabeth Maitland, Stephen Nicholas ISBN: 978-1-84855-666-9 eISBN: 978-1-84855-667-6
Citation:	Lex Donaldson (2009), In search of the matrix advantage: A reexamination of the fit of matrix structures to transnational strategy, in Joseph L.C. Cheng, Elizabeth Maitland, Stephen Nicholas (ed.) Managing, Subsidiary Dynamics: Headquarters Role, Capability Development, and China Strategy (Advances in International Management, Volume 22), Emerald Group Publishing Limited, pp.3-26
DOI:	10.1108/S1571-5027(2009)0000022005 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Article type:	Chapter Item
Abstract:	Matrix structures are complex and conflict prone, so multinational enterprises (MNEs) would utilize them only if they conferred some advantage over less complex organizational structures. Based upon the information-processing view, a theory of matrix advantage is proposed. It is supported by a secondary analysis of data from a major study of German MNEs. Matrix structures are shown to have an advantage over the elementary structural types. Specifically, the matrix structures fit higher levels of transnational strategy than elementary structures. Transnational strategy is assessed by two concepts: firm internationalization (involvement in foreign sales, manufacturing, and research and development (R&D)) and corporate integration (intracompany transfers). Moreover, three-dimensional matrices are associated with higher levels of transnational strategy than are two-dimensional matrices, confirming the gains from having additional structural dimensions. Matrix structures arise because of the need to simultaneously fit high levels of both firm internationalization and corporate integration. Matrices fit the transnational strategy type of Bartlett and Ghoshal. Implications are drawn for the relationship between the head office and the subsidiary. The matrix often subjects the subsidiary to conflicting expectations from the head office, which it can attempt to manage. Similarly, the head office is challenged by the task of integrating the information that comes from different dimensions of the matrix.