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- 3B1. When organizations using VM 1.0 realized that not everything could be managed in vertical functions and that some endeavors needed to be managed cross-functionally, a hybrid system of structure was invented: MM 1.0, or Matrix Management 1.0.
- 3B1i. MM 1.0 was an attempt to create either a formal or informal matrix organization out of the vertical dimension.
- 3B2. The hybrid MM 1.0 system added vertical units to the structure whose purpose was managing broad cross-functional segments of the organization.
- 3B2i. These vertical structures included groups such as project and product management groups, as well as business units, whose purpose was to create lines of authority for all parts of the business.
- 3B3. Typically, not all of the segments of a business could be housed within a single vertical business unit. For example, some support and broad-spectrum support processes were left as “centralized” vertical functions.
- 3B3i. A centralized function is an MM 1.0 term in which all the groups and people for a function report through a single vertical line.
- 3B3ii. Some functions that are typically centralized in MM 1.0 are Finance, Legal, Human Resources, etc.
- 3B4. MM 1.0 also includes decentralized functions, in which some of the groups and people within a function report to another vertical area, like a business unit.
- 3B5. Since alignment is always to the vertical function, centralized functions operate relatively autonomously relative to the business unit or other cross-functional structures.
- 3B6. With authority as the main driver to getting work done, dual-reporting relationships were created to ensure centralized functions were aligned with the business units they would be serving.
- 3B6i. Dual reporting relationships were also used for project or product team members (as well as other cross-functional teams). These dual reporting relationships created a line of authority to two bosses—the team leader and the functional leader.
- 3B7. In MM 1.0, business units do not control or have authority over all the resources that contribute to the business’ bottom line. This is a problem since the MM 1.0 OS depends on having authority to get things done.