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Automotive Retail:

Matrix Organizational
Structure

This summary describes a matrix organizational


structure as a dual management system, which
takes not only location-specific but also
intercompany perspectives and interests into
account.
Michael Kuloge / Update December 2015

Automotive Retail:
Matrix Organizational
Structure

Chart 2

Content
Basics
General Management and Central Divisions
Division Manager
Location Manager

Matrix View
Line View
Profitability & Effectiveness
Summary

Automotive Retail:
Matrix Organizational
Structure

Chart 3

Basics

For a group of several car dealerships it is particularly important to present


themselves equally as one business division and to act accordingly. This is ensured by
the groups division managers who assume intercompany transectional functions.

On the other hand operative responsibility has to be taken over with the goal of
making full use of the market potential at every location of the group. The location
managers ensure the reconciliation of the departments concerned.

Automotive Retail:
Matrix Organizational
Structure

Chart 4

General Management and Central Divisions

General management and central divisions form the head of the intercompany
business division and the individual operative site of the group.
The general management is composed of the business management as well as of the
commercial direction. An assistant is incorporated into the management.
The central divisions are composed of the administration department with e.g.
accounting, human resources, data processing, and controlling department, as well
as of the marketing and the customer relationship department.

Automotive Retail:
Matrix Organizational
Structure

Chart 5

Division Manager

The groups division managers ensure transectional functions and the intercompany
reconciliation of all sites (i.e. uniform rules, standards, processes, etc.).
They are responsible for coordination, controlling and supervision as well as for the
whole budgeting and the specialized staff of their business division. Their area of
responsibility covers the achievement of optimal results in a sector from the
entrepreneurial point of view and they are expected to resolve conflicts within the
company.
The new car brands belong to the business division, and across all brands also the
business divisions like key accounts, used cars and after sales.

Automotive Retail:
Matrix Organizational
Structure

Chart 6

Location Manager

Operative responsibility is to be taken over by the location managers of the group


with the goal of making full use of the market potential at every site of the group.
These people are the staffs disciplinary superiors at the site concerned and they are
responsible for the reconciliation of the departments at the site.

Division managers and location managers are committed to mutual support.


Together they communicate critical issues to the staff for whom they are responsible.
The following rule is to be applied in conflict situations: the companys interests
prevail the business divisions and the operations interests.

Automotive Retail:
Matrix Organizational
Structure

Chart 7

Matrix View
Location Management

General Management
Assistance
Central Divisions

Location
A

Division Management

New Cars
Brand 1

New Cars
Brand 2

Key Account

Used
Cars

After Sales
Automotive Retail:
Matrix Organizational
Structure

Chart 8

Location
B

Location
C

Line View
General
Management

Assistance

Divisions

Locations

New Cars
Brand 1

Administratio
n

New Cars
Brand 2

Marketing

Key Account

Customer
Relations

Used Cars

After Sales
Automotive Retail:
Matrix Organizational
Structure

Central
Divisions

Chart 9

Profitability & Effectiveness

Depending on size and amount of the dealership group, it could be practical and
useful that a division manager is as well responsible for a location, too.
This will keep the organization flat enough to be profitable and effectively as well as
supports to generate more intercompany, holistic thinking and acting within the
management team.
However this requires higher professionalism and qualification of all team members.
Especially leadership competence has to be verified and eventually improved.

Automotive Retail:
Matrix Organizational
Structure

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Summary

A matrix organizational structure is a dual, holistic management system, which could


be a practical solution to manage a multibrand car dealership group effectively and
consistent.
As an challenging leadingsystem it requires higher leadership competence of all team
members. Regarding profitabilty and effectiveness is has to be checked if a division
manager (depends on his qualification) could be also responsible in personal union
for a location, too.

Besides of intercompany supervision and controlling, it prepares an automotive retail


group to grow concerning in new locations as well as in existing or new brands.

Automotive Retail:
Matrix Organizational
Structure

Chart 11

Michael acquired more than 20 years of CEO experiences in leading premium car
dealership groups in Germany. This in his own as well as at privately and at Volkswagen
AG owned VW, Audi and Skoda dealership groups . Furthermore he managed for a US
parent company owned BMW / MINI dealership group. Currently he is responsible as
the MD at MVC Automotive Austria GmbH, which represents with 5 locations and
roundabout 300 employees the brands Ford, Volvo, Fiat and Alfa Romeo and is the
largest Ford dealership group within Austria.
Additionally he worked as a senior consultant on behalf of the Volkswagen AG and was
responsible for a holistic development and management consulting of Volkswagen dealerships. Besides from that
Michael lectured a couple of years at the Management Marketing Academy of the Volkswagen AG on leadership,
marketing & public relations, human resources, reporting and generation change. He achieved several awards of the
Volkswagen AG (organization, employee satisfaction study, public relations) and main premium awards of the AUDI
AG (q-power, sales, after-sales, marketing). Furthermore he accomplished successfully a management audit at
Volkswagen AG as well as CEO audits at Audi AG and Screen GmbH.
He looks at companies as a generalist to the entire organization, including people, structures, processes and
systems, culture and human behavior.
Due to Michael's international activities he is very open-minded and likes intercultural exchange. He cooperated
several years with the Ben Craig Center, a business incubator affiliated with the University of North Carolina in
Charlotte, USA and managed their subsidiary in Germany. Furthermore he founded a US investment corporation,
was one of the initial investors and board members of a US medical start-up and founded their German subsidiary.
Additionally Michael consulted a high-tech company in Helsinki, Finland regarding growth, mergers & acquisition as
well as generation change and established business relationships to a MBO in St. Petersburg, Russia.
Automotive Retail:
Matrix Organizational
Structure

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