I would almost go so far as to say that if you need to rely on a formal reporting structure to manage, you're probably not ready to manage. All the effective managers I've ever seen - both go getters and people people - have managed by moral authority and respect rather than hierarchy.

As such, I have no problem with the concept of dotted lines, since they always exist anyway. What I do have a problem with is abuse of position, whether it's formal or not, and that is what I believe makes for uncomfortable situations far more than having multiple bosses.