The Emergence and Evolution of the Multidimensional Organization

California Management Review, Vol. 51, No. 4, pp., 11-31, 2009

37 Pages Posted: 16 Jun 2009 Last revised: 16 Mar 2010

See all articles by J. Strikwerda

J. Strikwerda

Universiteit van Amsterdam - Amsterdam Business School

J. W. Stoelhorst

University of Amsterdam - Amsterdam Business School

Date Written: May 14, 2009

Abstract

The M-form, in which a corporate parent manages relatively freestanding business units, was the most successful organizational design of the twentieth century. However, contemporary economic conditions call for designs that allow firms to exploit synergies across their business units and on this dimension the M-form is notoriously weak. We report on empirical research that highlights the fundamental tension between clear lines of authority and the exploitation of synergies that firms face as they move away from the M-form and implement shared service centers, corporate account management, and matrix organizations. However, we also found that a limited but substantial number of firms in our sample evolved organizational designs that signal a new way of resolving this tension. These firms are organized around multiple dimensions (e.g. region, product, and account) and are able to simultaneously hold different managers accountable for performance on these dimensions. We discuss the nature of this multidimensional organization form by contrasting it with the M-form and the matrix organization. The multidimensional organization is best understood as the next step in the evolution from a resource centric physical production model to a customer centric knowledge exploitation model. It is a way of organizing that seems particularly well adapted to stimulating the teamwork that is necessary to create economic value in complex markets on the basis of distributed knowledge and intangible resources.

Keywords: Corporate Strategy, Organization Design, M-form, Matrix Organization, Multidimensional Organization

JEL Classification: D21, F23, L21, L23, M10, N80

Suggested Citation

Strikwerda, Hans and Stoelhorst, J. W., The Emergence and Evolution of the Multidimensional Organization (May 14, 2009). California Management Review, Vol. 51, No. 4, pp., 11-31, 2009, Available at SSRN: https://ssrn.com/abstract=1404649 or http://dx.doi.org/10.2139/ssrn.1404649

Hans Strikwerda

Universiteit van Amsterdam - Amsterdam Business School ( email )

Plantage Muidergracht 12
Amsterdam, NH 1018TV
Netherlands

HOME PAGE: http://www.strikwerda.org

J. W. Stoelhorst (Contact Author)

University of Amsterdam - Amsterdam Business School ( email )

Plantage Muidergracht 12
Amsterdam, 1018 TV
Netherlands
31 20 525 5689 (Phone)

HOME PAGE: http://www1.fee.uva.nl/pp/jwstoelhorst/

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