AUTHOR’S DETAILS:

1. Name: Dr.L.Sudershan Reddy Professor, Faculty of management, Jain University, Bangalore. Mobile No : 9845472096, Email id: sudershan.reddy@cms.ac.in

2. Name: Kannamani R Doctoral scholar, Faculty of management, Jain University, Bangalore.

Mobile No : 9986595820 , Email id: kannamani23@gmail.com

Correspondence Address:

Kannamani Ramasamy,2nd floor, #33, 3rd cross, Munireddy layout

Near Matha school, Garapalaya, Bangalore 560068 State: Karnataka, Country: India Mob: 9986595820

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A Pilot Study– An analysis and effective implementation of matrix organization

in IT outsourcing industry

L. Sudershan Reddy1, Kannamani R2*

Abstract:

Matrix organization is a contemporary management concept in IT outsourcing industry. Pilot studies are a

critical component of a quality study design. In general, pilot study is considered as a miniature version of

a complete research study. Conducting a pilot study does not guarantee success in the actual research, but

it helps to improve the probability of success. In this research paper, we discuss few important things such

as the need of the pilot study in IT outsourcing industry with respect to matrix organization, the process of

testing the feasibility of the project proposal, requirement of sample, research tool, data analysis and the

outcome of the study. Based on this pilot study we are going to identify the parameter which needs to be

fine-tuned in order to carry out the research with large number of participants.

Keywords: Matrix organization, IT outsourcing, Infrastructure technology outsourcing, Respondents,

Reliability, Validity, Service delivery, Hypothesis, Sampling, Population.

Abbreviations: ITO –Infrastructure technology outsourcing, MOS- Matrix organization system, IT-

information technology,

Introduction:

Matrix organization is a concept where an employer managing an employee by using more than one

manager or in other words we could say an employee reporting to more than one manager in order to

obtain an organization delivery expectation which is part of organizations vision and mission. Any

organization outcome depends on the reporting relationship with the management and employee. Hence

strategy for employee management becomes very critical.

1 Professor, Faculty of Management, Jain University, India, sudershan.reddy@cms.ac.in2 Infrastructure management principal-ATOS IT services Ltd and Doctoral Scholar, Faculty of

Management, Jain University, India, kannamani23@gmail.com

*All correspondence should be addressed

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Earlier organizations were using conventional management concept where an employee reports to a

supervisor, supervisor reports to a manager, manager reports to his manager (Say general manager), and

general managers reports to managing director. In this method request goes from bottom level (from

employee level) and command comes from top level (management level, say managing director).May be

this concept was good when they had legacy production system, manual operations, partially skilled

employees, less automation, with less number of employees. But when the changes are needed in all or

any of the parameters it is important to have management concepts as per the need.

As per the review of literature, Matrix structure was employed in 1947 by General Chemicals in its

engineering department and also in 1960s the matrix method called "unit management” was implemented

by a large number of U.S. hospitals. But however the first organization to frame, design, develop and

implement a formal matrix structure was NASA. NASA developed a matrix management system for their

space program since it required to instantaneously emphasizing several different functions and projects,

none of which could be stressed at the expenditure of another. They have identified that the traditional

management system were not suitable because it is too bureaucratic, hierarchical, slow-moving, and

inflexible.

Because of the effectiveness and benefits to the organizations and business, matrix management gained

broad acceptance in the corporate world during 1970sand recognized largely during 1980s as a result of

economic changes in the United States, which comprised slackening national market progress and

increasing overseas competition. Those fluctuations forced many establishments to pursue the benefits

offered by the matrix organization model.

Limitations of the Study:

This pilot study is restricted to IT outsourcing industry (Infrastructure technology outsourcing)

This pilot study is concerned upon randomly selected 10+ IT outsourcing companies across the globe.

This study is restricted to companies which are either in to CMM level 5 or fortune

The study examines the opinion of employees, project managers and functional managers from

various angles.

This study aims to understand the MOS as to how it is being implemented and used by the employer

and employees in order to find the demerits of it.

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Uniqueness of the Study:

The existing research on MOS is more on Non-IT industry and we see very little research from IT

perspective. The uniqueness of this research is that the research has been conducted in top

ranking organizations in the IT outsourcing industry.

Research approach and methodology:

Background:

Matrix organization systems are important and unavoidable concepts in IT outsourcing industry. We see

very few researches happening in IT industry, also when it comes to ITO industry even it is very less and

also the context of the researches are not up to the mark to overcome the difficulties which are being

faced by the employees and employer. Based on the personal experience with various ITO MNCs, the

way of implementing the MOS in real time is different from what was defined in white & black.

This research aims to find out the challenges that are exist in IT outsourcing industry with respect to

matrix organization and fine out how we can further fine-tune and give the remedy for the challenges.

Need of pilot study in this research

Verify that the directives given to respondents are understandable.

Check the reliability and validity of the results.

Measure whether the level of intervention is appropriate.

Developing and testing suitability of research instruments

Judging the practicality of a the study/survey

Designing a research protocol

Assessing whether the research protocol is realistic and workable

Forming whether the sampling frame and technique are effective

Assessing the likely success of projected recruitment approaches

Identifying logistical challenges which might occur using proposed methods

Estimating variability in outcomes to help determine the sample size

Gathering preliminary data

Determining what resources are needed for a research study

Calculating the proposed data analysis techniques to uncover probable complications

Developing/Modifying a research question and research plan

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Research objectives:

This pilot study aims to identify the effectiveness of matrix organization system and the various

factors associated with it.

To find out the challenges those are being faced by an employee and an organization in real time

due to matrix organization system.

To create a developed or fine-tuned process in order to overcome the challenges, this will give

benefits to the employee, IT customer and an organization.

Research Design:

Type of research - Quantitative method

Research methods used - Questionnaire based Survey

People interviewed -An ITO employee includes engineer level, manager Level, senior manager

level, project managers.

Numbers of interview -44 (out of 55 target population )

Research locations - Global

Questionnaire -Based on 5 hypothesis, it was divided in to 23 questions

Method of data collection - Structured questionnaire sent via email.

Sampling technique used and why:

We have chosen judgment sampling which comes under non probability sampling technique. The reason

for choosing this method is that we are in to pilot phase, uncertainty of questions and responses, targeting

specific audience and also for ease of operations. Based on the outcome we may try to pick some other

sampling methods if needed.

Survey instrument:

Email is our pilot study research instrument .In every email communication with the respondents we have

given an introduction about the research scholar and need of doing this research. Questionnaire has been

prepared in the google forms and the form has an introduction about the matrix management and the

purpose of asking the response from respondents which will help them to understand the subject and

correlate with their experience when they are answering the questions so that we will get an answer with

more relevance. All the responses will be stored in the google spread sheet where we can analyses the

data later.

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Organization and participants:

We had 44 participants from various organizations. They are all holding different positions such as

engineer, project manager, Functional manager and senior management professionals. Respondents are

from various continents such as Asia, Europe, North America and South America. Participants are from

various countries such as India, Philippines, Malaysia, USA, England, Mexico, Australia and Guatemala.

Importantly we have chosen participants from various top IT outsourcing companies such as IBM, HP,

ATOS, CTS, EMC, Microsoft, TCS, Tech Mahindra, Vodafone, Wells Fargo, and Xerox.

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Hypothesis and questionnaire:

We are intended to test the hypothesis. In order to get the data from the respondents we have divided our

5 hypothesis in to multiple questions. In total we have asked 27 questions, 22 belong to hypothesis which

will help us to collect the data in order to analyse and draw the inferences. 5 questions are asked in order

to understand the respondents details such as position, company name, country name, continent name and

number of years’ experience in IT industry which helps to understand the participants statistics and it

helped to prove that the respondents are not from same organization, not from same country and not in the

same experience group. This also helps us to justify the quality of the representative sample.

Hypothesis 1: Employee level issues (Performance rating, Job security, Job Comfort)

Hypothesis 2: Continuous improvement plan

Hypothesis 3: Conflict issues

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Hypothesis 4: Responsibility and authority issues

Hypothesis 5: Global issues (diversity, ethnic variance, language and global position/pay)

Data collection and response rate:

We had distributed questionnaires to 55 respondents and worked with them for 1 month in order to ensure

that they are responding to the questions. Out of 55 target population, we have got response from 44

people which is around 80% of the total crowd.

Tools and techniques for data analysis:

We have used IBM SPSS statistics 22 tool in order to analyze the descriptive statistics such as

“Frequencies and descriptive, Dimension reduction- Factor analysis for knowing the validity of the

questionnaires and , cronbach's alpha-reliability analytics for analyzing the reliability or consistency of

the questionnaire and one sample T test to test the hypothesis”.

Descriptive statistics:

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Hypothesis testing:

Non parametric hypothesis testing (One-sample chi-square test) used here and based on the decision table

we can conclude that we may have to reject null hypothesis (Asymptotic significance vary from 0.000 to

0.11)

Reliability test:

To identify the reliability of the pilot study, we have to run the cronbach’s Alpha test. The reliability

score indicates that the collected data is unbiased. The reliability of the study is good as the cronbach's

alpha score is 0.877.

In general, (As per Wikipedia, as on 4 January 2016, at 15:21) Cronbach’s alpha increase as the

intercorrelations among test items increase, and is thus known as an internal consistency estimate of

reliability of test scores. Because intercorrelations among test items are maximized when all items

measure the same construct, Cronbach's alpha is widely believed to indirectly indicate the degree to

which a set of items measures a single unidimensional latent construct. It is easy to show, however, that

tests with the same test length and variance, but different underlying factorial structures can result in the

same values of Cronbach's alpha.

Suppose that we measure a quantity which is a sum of   components (K-

items or testlets):  . Cronbach's   is defined as

Where   is the variance of the observed total test scores, and   the variance of component i for

the current sample of persons

The theoretical value of alpha varies from zero to 1, since it is the ratio of two variances. However,

depending on the estimation procedure used, estimates of alpha can take on any value less than or equal to

1, including negative values, although only positive values make sense. Higher values of alpha are more

desirable.

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Method 1: Alpha

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Method 2: Guttman split half coefficient

Validity test:

In order to identify the validity of the questionnaire we have run the factor analysis by using “Principle

component, axis factoring, Image factoring methods” and result as below:

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Missing value analysis:

It is very critical to understand the missing values which may impact the outcome of the study. In order to

get the expected outcome we need to ensure the respondents are answering all the questions. Below is the

missing value pattern of out pilot study.

Remarkable Correspondence analysis:

In order to identify and understand the connections which shows the similarity and controversial outcome

of the questionnaire we ran correspondence analysis and output given below and discussed in details in

“discussion” area.

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Discussion:

1. Hypothesis can be modified as the effectiveness comes from various factors.

2. Performance rating question can be modified as “Are you fine to rate your performance by

someone, other than who manage your day to day work?”

3. Identified 7 missing values and we need to instruct the respondents to answer all question so that

the validation part will be good.

4. The reliability and validity test results are within the expected range but however the factor

analysis indicated the value as 0.56 which can be improved may be by fine tuning the questions

slightly as per the research objectives.

5. Employee position needs to be classified with more items

6. Correspondence analysis indicates that there are few components which are contrasting the result

of another component which is in the same area.

7. When we asked respondents that “Are you comfortable with MOS?”,30 people responded as

“yes” but when we asked about the need of centralized performance management system,34

people said it is needed. Though they are comfortable with MOS, but based on their experience

they want to have CPMS.

8. When we asked respondents that “Are you comfortable with MOS?”,30 people responded as

“yes” but when we asked about the need of skip level approach,31 people said it is needed.

Though they are comfortable with MOS, but based on their experience they wanted to have skip

level approach system. Few of the companies are having it already, but however some of them are

not using effectively and some of the organizations yet to implement.

9. 22 people only answered that they are happy with the performance rating which is 50% of the

sample

10. 36 people mentioned that they need continuous improvement plan (CIP) in their organization.

11. 30 respondents mentioned that the matrix reporting system may develop conflict among

employees/Managers.

12. Out of 44,27 people agreed that the recognition and appreciation will affect due to the MOS

13. 36 people agreed that the resolving conflict issues will help for employees and employer.

14. 36 respondents mentioned that the responsibility without authority may end up with conflict

issues.

15. 30 people agreed that delivery slowness can happen if a human resource does not have authority.

16. 38 respondents wanted to have cross cultural training which is helpful for improving diversity

factors.

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17. 38 respondents wanted to have neutralized communication skill training which is helpful for

improving diversity factors.

18. Out of 44 respondents, only 19 people mentioned that their organization has cross cultural

trainings are in place currently.

19. Out of 44 respondents, 22 said the global payment and position alignment is needed based on the

business and 19 people agreed to have the alignment globally.

20. Out of 44 respondents, 9 people said the MOS is their choice and 19 people are uncertain.

21. When 24 people agreed that the relationship is good in IT industry, 20 people do not agree to it.

Conclusion:

The outcome of pilot study indicates that the proposed remedies may work as a solution to the

identified problems. The descriptive statistics indicates the respondents wanted to opt for changes

as we proposed as the scores are at higher side. For most of the items, more than 75% of the

respondents have answered option 4 and 5 which carry high value as per likert scale. We got

some contradictory answers from the respondents for few items that are related to each other,

which we may have to look into and correct in the right manner in order to avoid the issues in

future. Questionnaires may have to be fine-tuned slightly based on the respondents experience

and it may change the effectiveness of hypothesis. The obtained results and inferences are based

on the sample size 44 and the outcome of the actual research may vary from the pilot study as we

are going to deal with a large population. The reliability score indicates the good consistency of

the items and it is at an acceptable level as per the cronbach’s alpha theory. Correspondence

analysis indicates that people need to go through matrix management trainings in order to

understand the matrix management concept in the better manner.

Suggestion for future study:

The result of this pilot study can be incorporated with the actual study, which may

increase the success ratio of the research.

The research method and methodology used in this pilot study can be scrutinized by the

researchers and propose the new method and methodology.

The research method and methodology used in this pilot study can be verified by the

researchers in non-IT industry and incorporate with their research.

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Hypothesis and questionnaire can be modified as per the outcome of pilot study in order

to obtain the accurate data which is expected from this research.

The sampling technique used in this study can be incorporated with any other probability

sampling technique so that the combined sampling technique will be more effective and

research will give the outcome as desired.

References:

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IT outsourcing industry”. International journal of information technology & computer sciences

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II. L.Sudershan Reddy & Kannamani.R. (2015),“The possible remedies for the challenges of matrix

organization system in IT outsourcing industry”. The International journal of Business and

management, Vol 3 Issue 7 July, 2015.

III. L.Sudershan Reddy & Kannamani.R. (2016), “A study on sampling technique to analyze the

matrix organization in ITO industry”. FOCUS – The International Journal of Management

Digest’ published by the IFIM Business School, (Oct-Mar, 2016)

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