Prior to a corporate wide restructuring effort, the Pfizer Corporation operated with a divisional structure. This divisional organization prevented realization of full organizational efficiency and effectiveness. Although this organizational structure provides for defined accountabilities, creation of professional development opportunities, and cultivates the process for local performance management, the divisional structure can create extreme inter-organizational competition, while requiring a duplication of functional specialists and inter-division personnel throughout each divisional area (Iqbal, 2008).
Pfizer recently transitioned to a new structure which created an opportunity for clearly defined responsibilities and accountabilities, while eliminating the duplication of functionalities throughout divisional areas (Pfizer, 2007). The new structure promotes well defined objectives and additional organizational efficiencies (Iqba, 2008). The Matrix structure is, however, much more complex. Unlike the previous divisional structure, the organization now operates within an integrated model.
This new structure creates multi-channel accountability through sharing of authoritative powers and a general decrease in organizational clarity (Iqba, 2008). Although the Matrix provides many advantages not seen through the Division structure, the organization must resolve structural deficiencies in order to achieve their defined objectives. Problem Selection and Rationale Pfizer’s new organizational structure is conducive to their company. The Matrix structure is an ideal structure within project-focused organizations (Johnson, 1990).
For the Pfizer Corporation, who is driven by consumer demand, the Matrix structure creates an opportunity for flexible use of corporate resources. Within the Matrix environment, personnel may transition from one project to another, as needed (Johnson, 1990). Because Pfizer’s routine business activities involve research leading to the development and market introduction of new medicines, the demand for human capital within the company varies. The Matrix structure provides opportunity for efficient use of human resources within the organization. The introduction of the Matrix structure resulted in several problematic areas.
Within the new environment, the functional manager assumes the ultimate roll of authority for the project at hand (Johnson, 1990). Unlike alternative structures, this is based on the project at hand rather than functionality; delays in processing, approvals, etc. are likely to arise through having narrowed executive leadership. Additionally, priorities can become variable leading to misalignment within the team. Pfizer Corporation has identified a problematic situation in which team members carry conflicting priorities (McKinney Rogers, n. d. ). The integrated structure has caused some concern within the functional teams.
While the project manager’s priorities remain with the project at hand, the functional manager has often utilized time for training which has been known to consist of several consecutive days (McKinney Rogers, n. d. ). In these instances, the company’s authority has conflicting objectives of what should be done first. While the manager’s priority has been training, the leader’s priority remains completion of tasks related to the project (McKinney Rogers, n. d. ). This problem has paved the way for ineffective organizational leadership. Use of a matrix structure within Pfizer has significantly impacted organizational leadership.
Within the matrix structure, the project manager provides direct oversight of the project at hand while the functional manager maintains authoritative powers (Johnson, 1990). This can cause confusion amongst the team, as the chain of command becomes diluted. The project manager’s main concern lies with the big picture of the project itself while the functional manager is accountable for the functionality of completing the job (Iqba, 2008). While the perception seems that these two aspects go hand in hand, the reality is that the seemingly diluted management can create chaos and discontent amongst the team.
Identifying these problematic areas is the first step towards enhancing the organizational structure. Each of these areas negatively impacts the organization’s productivity, quality, and efficiencies. While the foundation of the matrix structure aligns with Pfizer’s company, the manner in which it is utilized should be examined. Minor modifications to promote effective operations will result in higher levels of productivity, employee satisfaction, and overall efficiency of operational processes. Recommended Solutions and Rationale
When enhancing an organizational structure, determining solutions to identified challenges is a critical piece of the overall process. Identifying solutions consist of examining current practices, determining challenges, researching solutions, testing hypothesis, and then implementing recommendations. In an effort to overcome the above challenges, research was conducted and solutions uncovered. To overcome the delayed response time in things such as decision making and approvals, we recommend the implementation of management maintenance through regularly scheduled meetings.
In doing this, it is our hope that Pfizer will be able to maintain a consistent stream of communication, efficiency, and execution. By having regularly scheduled meetings, employees and the management team will have specific time set aside for things such as decisions needed to be made and approvals needing to be signed off on. To overcome inconsistent priorities throughout the organization, we propose that Pfizer establishes a clear definition of goals and expectations through management.
The project manager of who is technically working under the authority of a product and the functional manager should both be given the authority to make critical decisions (Thomas, 2006). This would ensure that all involved with the project as well as those working in a functional capacity would have a clear vision set and know that decisions are made based on that vision. By showing a united team between the two management roles, it should alleviate confusion within the team and priorities should remain consistent if in line with the overall vision.
To overcome decreased effectiveness of organizational leadership due to multiple managers overseeing the same project from a different aspect we believe that training is needed at the managerial level. This training should be targeted at increasing the managers’ emotional intelligence in order to increase their leadership abilities effectively (Harmer, n. d. ). Ilard & Findlay (2006) found that emotional intelligence contributes to team effectiveness and productivity.
With Pfizer working in a team environment, this training would provide managers with the tools to assess the emotional intelligence of their team and tap into the different personalities they are working with. A team’s probability of success is believed to be reliant upon having members of the team who work well together and each contribute to the overall purpose, goal, or task at hand (Ilard & Findlay, 2006). The usage of emotional intelligence would be beneficial to Pfizer because it would have with everyone being on the same page and be able to flex their personality style based on the team member that they are working with.
The challenges described can all be overcome through dedication to improving Pfizer’s organizational structure by all employees. In an effort to overcome these challenges, Pfizer will build a strong bond between employees through a process that provides timely responses, consistent priorities throughout the organization, and increased effectiveness of organizational leadership. Solution Evaluation Metrics and Rationale It is common belief that “the companies that are best able to manage projects, programs, and portfolios align them with strategic goals” (PMI, 2008).
In terms of a company’s ability to practice this type strategizing in its “every day” practice is referred to its project management maturity level. Obviously, the companies that are better at predicting their ability to execute are better at meeting their key business objectives. Therefore, “Companies with greater maturity should expect to see tangible benefits that include better-performing project portfolios, efficiencies that come with better resource allocation, and increased process stability and repeatability” (PMI, 2008).