On the principle of unity of command: Application of a model and empirical research

This article deals with decision making at the level of the organization. The matrix organization, which contradicts the classical management principle of unity of command, has become the accepted term in both business and academic circles. This paper examines the validity of the principle of unity of command through the mathematical model approach. We formulate an organizational decision problem as the statistical decision problem in the matrix organization structure for three categories of "uncertainty"–certainty, risk, uncertainty–and obtain the proposition that there exists a traditional pyramid organization (strictly speaking, a line and staff organization) which is preferable to the matrix organization if the top leader is confronted with the case of certainty or risk, i.e., the principle of unity of command keeps its validity in these cases. This proposition is useful in designing an organization, and our empirical research on Japanese firms supports the proposition.