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ACCA Applied Knowledge · Business and Technology · The formal and informal business organisation

Zeta Co has a project team of engineers who each report both to the head of the engineering department and to the manager of the project they are assigned to. What is the main drawback of this arrangement?

The main drawback is that staff may receive conflicting instructions from two managers. Reporting to both a functional head and a project manager is a matrix structure, which shares specialists well but creates divided loyalty, role confusion and possible conflict over priorities.

  1. AStaff may receive conflicting instructions from two managersCorrect
  2. BSpecialist skills cannot be shared between projects
  3. CDecision making is always concentrated at the top of the hierarchy

Explanation

Dual reporting describes a matrix structure. Its main weakness is that employees answer to two bosses, which can create conflicting priorities and confusion. Sharing specialists across projects is actually a strength of a matrix.

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