Differences Between Organizational Structure And Strategy
1. What are the relationships and connections between a firm’s strategy and its structure? How do they affect each other?
A firm’s strategy and a firm’s structure go hand-in-hand. A firm’s strategy is often all-encompassing and fairly indefinite. The strategy of a firm is its plan of action to make its goals a reality. It is the way a firm plans to run the company, whether it be specific, measurable targets that are set and the way they plan to be met, or attaining a deep understanding and awareness of the competitive forces that the organization will face.
A firm’s structure is the way that it chooses …show more content…
If a firm’s strategy and structure do not support each other, it is not possible for the intended strategy to be carried out. If the upper management of a firm does not support or believe in the strategy, it is highly unlikely that their subordinates will either, and even if they do, it will be difficult for them to compensate for this. The strategy of the firm will likely take on the one that their structure supports, which could be very different from the strategy …show more content…
Can a good strategy be a substitute for a poor structure? Can a good structure be a substitute for a poor strategy?
The answer is no to both questions. A firm can have the best strategy in the world, but with a poor structure, their strategy no longer matters. The same can be said for structure – without a good strategy, an excellent structure is null and void.
A strategy cannot be employed if the structure of the organization is not sound. In order for a strategy to be successfully implemented, it is beneficial that all of the different areas, departments, etc. do their part to execute the strategy. This requires cross-functional teamwork amongst all groups, which simply cannot happen if the structure of the firm is not effective. Although firms are almost always divided into different functional areas, collaboration and cooperation amongst the groups are key when it comes to running the business efficiently and successfully. A bad structure impedes this from happening, no matter how great the strategic intentions of the company as a