Organizational Structure and Design

Case Study 22-5, Bayer AG of Germany, describes the company’s
use of a matrix structure to achieve three (3) business goals: 1)
shift management control from the then—Western German parent
company to its foreign divisions and subsidiaries; 2) restructure its
business divisions to more clearly define their duties; and 3) flatten
the organization, or empower lower-level managers to assume more responsibility, so that top
executives would have more time to plan strategy (Borkowski, 2016).
In this unit, there is a focus on organizational structure and design. It is important to keep in mind
that not all organizational structures are appropriate for all business entities. The decision on
which organizational structure is best suited for an entity is based on a number of factors such as
the business goals and objectives; the internal and external environment; and the strategic
direction of the firm. In this case, Bayer AG of Germany, the leadership team chose to adopt a
matrix structure throughout the company. This is a common structure within the healthcare
industry and difficult to implement given its characteristic dual authority.
Unit Learning Outcomes
ULO #5: Compare and contrast organizational structures that are commonly utilized in
healthcare and related industries. (CLO 6)
ULO #6: Critically examine an institutional decision to implement a matrix structure with
particular attention being placed on the perceived strengths and weaknesses of this structure.
(CLO 6)