1.  This structure has two parallel multifunctional line organizations: one focused on the customer-markets designated the front end, and a second focused on products designated the back end  The objective is to achieve simultaneously the customer focus and responsiveness and the global-scale economies

2.  The corporate functions form an additional matrix across the two parallel organizations.  To effectively achieve these conflicting objectives the management challenge is to effectively link and balance the customer- market front end with the product back end in a matrix.

3.  This new structure solved four problems of the old structure:  first it created a clear balance between these two key dimensions – customer focus and product focus;  second it presented a unified sales contact for customers that is focused on sales growth of all products;

4.  third the product-category business units with profit and loss responsibility have full control over their key functions; and  fourth the service functions and corporate functions formed a third and fourth dimensions in matrix structures over the two key dimensions.

6.  The front side has units based on geography to provide a multi domestic or regional focus  The backside has units based on product groups to capture functions of R&D and production

7.  Front back hybrid matrix structure catered to the problems of localized efforts of marketing required.  Now with increase in globalization, to exploit competitive advantage of nations, outsourcing of manufacturing also started taking place which means

8.  Earlier only marketing function of value chain was scattered across geographies and now by virtue of outsourcing manufacturing function was also scattered across geogrophies  Transnational-network structure is the solution to cater to problem of multiple geogrophies of production and marketing

9.  Has no symmetry or balance in its structural form  Resources, people, and ideas flow in all directions  Nodes or centers in the network coordinate product, functional, and geographic information

10.  Philips divides the world into three groups  Key countries: such as the Netherlands and the United States produce for local and world markets and control local sales  Large countries: such as Mexico and Belgium have some local and worldwide production facilities and local sales  Local business countries: smaller countries that are primarily sales units and that import products from the product divisions’ worldwide production centers in other countries

12.  After marketing and manufacturing, now even R&D is becoming more global and disintegrated  Organizations are figuring out ways of disintegrate their R&D activities to exploit competitive advantage of nations  Objective is to exploit best expertise of particular set of activities available in particular country and operate 24*7

13.  To sort problem of marketing, operations and R&D disintegration, firms have started adopting T-shaped structure.  This structure helps to localize customer facing functions, even though it simultaneously disintegrates back end functions  Companies like GE, Astra Zeneca and Intel have started adopting this structure

14.  For example, in case of GE’s jet engine business, a unit in China can provide design for manufacturing expertise  Unit in India can provide analytics and material design expertise and yet another in Germany can chip in with wind-tunnel testing

15.  In this structure, horizontal line of “T” indicates disintegration of backend functions of organization across various countries and vertical line represents geographic significance of country from marketing and customer centrism point of view

17.  In each country horizontal and vertical strokes would be interconnected loosely  R&D centers of companies like Intel, Microsoft have fewer projects to develop for local customers (i.e. emerging economies) so strength of vertical line would not be that strong and deep compared to FMCG companies which have emerging economies more important from marketing view point