HOME

TheInfoList



OR:

A multidimensional organization is an organization that pursues its objectives simultaneously through multiple dimensions ( product,
region In geography, regions, otherwise referred to as zones, lands or territories, are areas that are broadly divided by physical characteristics ( physical geography), human impact characteristics ( human geography), and the interaction of humanity an ...
, account,
market segment In marketing, market segmentation is the process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as ''segments'') based on some type of shared charact ...
). The multidimensional organization was discussed as early as the 1970s. It required the combination of the fall of costs of information, the development of dynamic multidimensional markets, and a new generation of workers and managers, to create this paradigm shift in organization forms.


Introduction

The multidimensional organization exhibits the following: #the overall
performance A performance is an act of staging or presenting a play, concert, or other form of entertainment. It is also defined as the action or process of carrying out or accomplishing an action, task, or function. Management science In the work place ...
of the firm is reported simultaneously on multiple dimensions and on multiple levels; #each of these dimensions has a
manager Management (or managing) is the administration of an organization, whether it is a business, a nonprofit organization, or a government body. It is the art and science of managing resources of the business. Management includes the activitie ...
who is held accountable for the contribution of his dimension to the overall performance; #these managers depend on each other for required
resource Resource refers to all the materials available in our environment which are technologically accessible, economically feasible and culturally sustainable and help us to satisfy our needs and wants. Resources can broadly be classified upon thei ...
s; and #these managers
collective A collective is a group of entities that share or are motivated by at least one common issue or interest, or work together to achieve a common objective. Collectives can differ from cooperatives in that they are not necessarily focused upon an ...
ly are accountable for the overall performance.


Defining characteristics

*The most important reported
profit center A profit center is a part of a business which is expected to make an identifiable contribution to the organization's profits. Overview A profit center is a section of a company treated as a separate business. Thus profits or losses for a pro ...
in its accounting system is the
customer In sales, commerce, and economics, a customer (sometimes known as a client, buyer, or purchaser) is the recipient of a good, service, product or an idea - obtained from a seller, vendor, or supplier via a financial transaction or exchan ...
, that is on top of a product or a region, as is common in the unit organization. *Transaction data is owned by a central corporate office, not by units or regions. *Information regarding the performance of the firm, especially its position with customers, is available to all managers on the different dimensions (an absence of
information asymmetry In contract theory and economics, information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other. Information asymmetry creates an imbalance of power in transactions, which ...
). *Contrary to the unit organization, market opportunities and resources are organized under separate responsibilities to avoid risk averse behavior with respect to market opportunities


Cause

The most basic reason for the rise of the multidimensional organization is that due to the fall in costs of
information Information is an abstract concept that refers to that which has the power to inform. At the most fundamental level information pertains to the interpretation of that which may be sensed. Any natural process that is not completely random, ...
, customers start to behave in multidimensional ways in terms of their preferences, in the ways in which they select and purchase
goods and services Goods are items that are usually (but not always) tangible, such as pens, physical books, salt, apples, and hats. Services are activities provided by other people, who include architects, suppliers, contractors, technologists, teachers, doc ...
, make use of distribution channels, etc. To answer this increasing variety in customer behavior, both in private consumers and between businesses, firms need to increase their internal variety. The multidimensional organization also answers the emergence of multidimensional strategies, in which firms not only pursue market dominance and superior efficiency, but also need to exploit
economies of scale In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of output produced per unit of time. A decrease in cost per unit of output enables ...
.


Comparison to other organization forms

The multidimensional organization is a new organization form, compared to the U-form, the
M-form Multi-divisional form (also known as M-form or MDF) refers to an organizational structure by which the firm is separated into several semi autonomous units which are guided and controlled by (financial) targets from the center. Overview Multi-div ...
and the H-form. It transcends the restrictions with the M-form or multi-unit organization, as well as the problems with the matrix-organization. Examples of firms with a multidimensional organization are IBM, Microsoft, and ASML.


Comparison to matrix organization

The differences between the multidimensional organization and the matrix organization can be summarized as below:


Relating to ERP

The multidimensional organization implies specific requirements on how transactions are recorded in
enterprise resource planning Enterprise resource planning (ERP) is the integrated management of main business processes, often in real time and mediated by software and technology. ERP is usually referred to as a category of business management software—typically a sui ...
(ERP) systems, implicating a shift away from the traditional paradigm in IT-governance of business IT-alignment. Now transactions need to be recorded, not only multidimensional, to allow multiple consolidations to occur simultaneously. Particularly, the recording needs to be neutral with respect to business models. ERP systems tend to have a technical lifetime of 10–15 years, whereas business models last for 3–5 years.


References


Further reading

* * * Goggin, William C.
How the multidimensional structure works at Dow Corning
" ''Matrix Organization & Project Management'' (1979): 152–174. * * {{DEFAULTSORT:Multidimensional Organization Organizational theory Types of organization Management