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IAI Actuarial Core Principles · Business Management · Communicating strategy; culture and structure in decision making; strategy case studies

Kaveri Assurance introduces a matrix structure in which actuaries report both to the head of the actuarial function and to a product line manager. An actuary receives conflicting priorities from the two bosses. Which feature of the matrix structure does this directly reflect?

Dual reporting in a matrix structure compromises unity of command, because an employee answers to two managers who may give conflicting priorities. This is a known cost of matrix organisation, balanced against better coordination between functions and product lines.

  1. AUnity of command being compromised by dual reportingCorrect
  2. BToo wide a span of control for one manager
  3. CA purely geographic division of work
  4. DComplete decentralisation of authority
  5. Absence of any formal structure

Explanation

A matrix gives staff two reporting lines, so one person can face conflicting instructions. This undermines unity of command. The other options do not describe dual reporting.

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