An empirical evaluation of conflict in MNC matrix structure firms

According to existing theory, MNCs with matrix structures are supposed to have more intra-organizational conflict than non-matrix firms. The present study uses a sample of 82 German MNCs to evaluate and reject this general hypothesis. Only MNCs with a product division by geographical region matrix structure support the hypothesis. Other types of matrix structure which contain a functional division dimension tend to have levels of intra-organizational conflict similar to elementary structures. The paper develops and proposes new logic and two propositions that explain which types of matrix structure lead to greater conflict and which do not. As more MNCs consider using matrix structures to implement increasingly complex strategies, a better understanding of conflict in matrix MNCs is important.

► According to existing theory, MNCs with matrix structures are supposed to have more intra-organizational conflict than non-matrix firms. ► The present study uses a sample of 82 German MNCs to evaluate and reject this general hypothesis. ► Only MNCs with a product division by geographical region matrix structure support the hypothesis. ► Matrix structures which contain a functional division dimension have levels of intra-organizational conflict similar to elementary structures. ► The paper develops new logic explaining which types of matrix structure lead to greater conflict.