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Vertical coordination is often efficient but not always effective, depending on employees' willingness to follow directives from above. More decentralized and interactive lateral forms of coordination are often needed to keep top‐down control from stifling initiative and creativity. Lateral coordination is often more effective but costlier than its vertical counterparts. A meeting, for example, provides an opportunity for face‐to‐face dialogue and decision making but may squander time and energy. Personal and political agendas may undermine the meeting's purpose.

Exhibit 3.2. Basic Structural Options.

Division of labor: Options for differentiation
	Function
	Time
	Product
	Customers or clients
	Place (geography)
	Process
Coordination: Options for integration
Vertical	Authority
	Rules and policies
	Planning and control systems
Lateral	Meetings
	Task forces
	Coordinating roles
	Matrix structures
	Networks

Ad hoc groups such as task forces can foster creativity and integration around pressing problems but may divert attention from ongoing operating issues. The effectiveness of coordinators who span boundaries depends on their credibility and skills in handling others. Coordinators may also schedule meetings that take still more time from actual work (Hannaway and Sproull, 1979). Matrix structures provide lateral linkage and integration but are notorious for creating conflict and confusion. Multiple players and decision nodes make networks inherently difficult to manage.

Organizations have to use both vertical and horizontal procedures for coordination. The optimal blend of the two depends on the unique challenges in a given situation. Vertical coordination is generally superior if an environment is stable, tasks are well understood and predictable, and uniformity is essential. Lateral communications work best for complex or creative tasks performed in a turbulent environment. Every organization must find a design that works for its circumstances, and inherent structural tradeoffs rarely yield easy answers or perfect solutions.

Consider the contrasting structures of McDonald's and Harvard University (highly regarded organizations in two very different industries), and Amazon and Zappos (two successful Internet retailers with very different structures).