Teleia Sonera Organizational Structure

Organizational Structures: Matrix vs. Line
Due to the increasing complexity and dynamic conditions of global markets, multinational companies such as Telia Sonera need to design more responsive organizational structures to meet local market needs across various geographical boundaries while maintaining the ability to capitalize on global economies of scale.
The traditional hierarchical line structure with its advantages of a clear line of authority and responsibility, unity of command and distinct accountabilities tends to create efficiencies in simple markets, but it does not support the required agility and fast responsiveness to compete within the context of today’s unpredictable and unstable business conditions. Decision makers within complex line structures are often detached from local operations and hierarchical rigidity can create bottlenecks that slow down information flows and decision-making. Hierarchical structures can easily be paralyzed by an overload of information and standardizing procedures tends to lead to more bureaucracy, which reduces the organization’s ability to react quickly to changing market conditions. Additionally internal silos limit collaboration and knowledge sharing (Atkinson, 2003; Fontaine, 2007).
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A lack of clarity regarding roles and responsibilities, as well as confusion about who has the final authority and accountability can lead to problems of work coordination and prioritization among managers and employees. At the same time the speed and quality of decision-making might decrease due to a lack of commitment or discipline as a result of ambiguous accountabilities or due to time-consuming deliberations or insufficient collection of information from other parts of the organization (Sy and D'Annunzio, 2005; Sy and Cote