1.

What kinds of organizational design choices has TRW made about the five design challenges discussed in Chapter 2? TRW used a matrix structure, but what design choices are involved in a matrix structure? Exhibit 2 in the case shows the organizational chart in 1963. a. Vertical Differentiation There are three levels in the hierarchy: President Rube Mettler, the functional and program or project manager, and the subproject manager, actually work in the teams. The number of employees is not stated, but there is a flat structure. Authority and decision-making responsibility are decentralized, and subproject managers, the ones closest to the problems, make important decisions. TRW is flat and decentralized, the opposite of the Continental Can Co. 196 b. Horizontal Differentiation TRWs matrix is based on horizontal and vertical grouping. Vertically, tasks are grouped by functional specialization, which means being a part of mechanics, electronics, physical research, and systems. (In the book, functions are called divisions). Horizontally, tasks are grouped according to the current project. Two programs shown in Exhibit 2 are the Titan and Atlas Missile Programs. Subproject managers have a functional and program boss. In terms of Chapter 2, TRWs matrix structure has a high level of differentiation; division of labor is very high, but is based on a functional and a project logic and changes as projects change. c. Integration mechanisms TRWs level of integration should be high also. Is it? What are the major integrating mechanisms? Using Galbraiths model: The two boss managers, the subproject managers, perform an integrating role and coordinate the functions with projects. As a group, the subproject managers working on a project form a team or, in TRW, since these groups are constantly changing, task forces. The matrix is a form of integrating mechanism and is designed to improve coordination. Thus the matrix structure has a high level of differentiation and integration. What about the other design choices? d. Standardization-Mutual Adjustment Standardization and formalization play a small role in coordinating and motivating employees in TRW. Given the complex nature of tasks, rules and procedures cannot coordinate functional activities. TRW relies on mutual adjustment between scientists, and the teams provide the setting for mutual adjustment.

e. Informal-Formal Organization TRW makes minimal use of formal hierarchical reporting relationships to coordinate activities. There are not many managers. The informal network of social relationships developed over time is important in determining how teams perform, and informal status relationships between scientists is important as a means of coordination. Team values and norms derive from informal interactions between scientists and are spread as members move between teams. 2. Given these design choices, how would you describe TRWs approach to coordinating and motivating employees? TRW designed a structure that provides freedom and autonomy for employee decision-making and uses the project teams to coordinate and motivate members. With its flat, decentralized hierarchy and focus on mutual adjustment and cross-functional communication, TRW has created an organic structure. 3. Are the design choices that TRW has made appropriate for the organization? TRWs complex matrix design and its organic structure are appropriate because from a contingency perspective they match: Its very uncertain environment a large job shop subject to frequent changes rapid changes in technology increased competition as it gives up protected government contracts Its complex and rapidly changing products 197 Its high-tech approach and complex nonroutine research emphasis. In terms of Perrows model, TRW is high in task variability and low in task analyzability. In terms of Thompsons model, it uses intensive technology and has reciprocal interdependence. It employs highly educated professionals who respond to freedom to experiment and to make decisions; that allows them control over activities. Professionals are controlled through norms, values, and socialization. From a contingency perspective, the matrix structure matches its activities and environment. A matrix would not be suitable in a simple, stable environment for routine technology and employees with routine tasks. Here, it would promote coordination and motivation problems and raise bureaucratic costs. TRW and the Continental Can Co. use different design approaches because they face different contingencies. 5. What other problems does a matrix cause for TRW? Other problems mentioned in the case include: 198 The time spent getting new project teams to run. TRW uses team building and T-groups to develop group cohesiveness and shared values and norms.

 Promoting successful people is difficult in a flat hierarchy. TRW grew into a huge multidivisional corporation, so promotion opportunities opened up. Stress for team members, People dont like ambiguity and prefer their present teams. Shifting teams causes stress. 6. What problems might TRW have with its matrix structure as it grows? One major problem is whether a matrix structure is suitable for a large organization and whether TRW can maintain its organic approach as it grows. This is difficult to achieve, and TRW faced problems as it grew. Between 1961 and 1982, TRW grew to a multidivisional company as different projects became divisions. Different divisions started to compete and refused to share R&D knowledge. Their view was Why should I give away this information free to another division when it cost us billions to develop? Mettler had to recapture the cooperation of the early days and increase integration between divisions. He introduced a multidivisional matrix structure and reshaped culture by monitoring and rewarding divisional performance according to productivity, quality, and cooperation between divisions. Formal committees encouraged the cross-fertilization of ideas as the matrix was reestablished. 199