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CA Intermediate · Financial Management and Strategic Management · Strategy Implementation and Evaluation

Meridian Pharma Ltd. has a functional structure but now sells three distinct product lines in many regions. Decisions are slow, functional heads blame each other for poor product performance, and no one is accountable for each line's profit. Top management wants clear profit responsibility for each product line while keeping functional expertise within the matrix. Which structural change best fits this requirement?

A matrix structure with product managers working alongside functional heads fits best. It assigns profit accountability to each product line while retaining specialised functional expertise, addressing the blame-shifting and slow decisions. Simple, purely functional or fully outsourced network structures do not meet both requirements.

  1. AMove to a simple structure under the founder
  2. BAdopt a matrix structure with product managers alongside functional headsCorrect
  3. CReturn to a purely centralised functional structure
  4. DAdopt a network structure by outsourcing all functions

Explanation

A matrix structure overlays product (or project) managers on functional departments, giving profit accountability per line while retaining functional expertise. A simple structure suits small firms; a purely functional one is the current problem; a network structure removes control over functions, which is not the stated aim.

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