Relationship between Business Strategy and StructureBusiness Strategy primarily refers to the road-map laid out by an organization. The principal objective of strategy is to ensure that an organization achieves the set targets in order to sustain and grow in an increasingly competitive world. On the other hand, a structure is the manner in which the internal resources of a company get connected with each other. More specifically, structure is concerned with different groups that can be formed within an organization. For example, an organization having a functional structure will operate through the different functions such as Marketing, Finance, and Manufacturing. Show
Business Strategy is the main driver that decides the structure an organization. Also, in case the structure of a company is not synchronized with its strategy, then the company may not be able to achieve the set targets. For example, a company with a diversified product portfolio and has a functional structure (organized as per various functions such as Marketing, Finance and Operations) will not be able to compete effectively in each of the product categories. As a result, the company may start losing the market share of its products. Evidently, structure plays a critical role in the accomplishment of an organization’s overall strategy. Another notable aspect is that both business strategy and organizational structure need to be continuously inter-linked in order to achieve desired results. Correlation between Organizational Culture and StructureOrganizational structure is a formal system wherein employees, with well defined roles and responsibilities, communicate with other such members/employees for the achievement of common objectives. The structure of an organization is tangible and physical, which means that it is visible to internal as well as external stakeholders of a company. An organization’s structure is based on the overall strategy, which drives the policies and procedures of an organization. Consequently, the policies decide the behavior of managers and other associates within a company. An organization’s structure also helps in understanding the existing hierarchical levels and Span of Control. On the other hand, the culture of an organization is based on shared values, norms and individual group & behavior. More specifically, the culture of an organization is more informal in nature and is based on collective ideas & values shared by the employees. The ways in which various tasks are performed at different levels also defines the culture of an organization. Structure and culture in organizations exist in close alignment. Structure is one of the determinants of culture; conversely, culture has been shown to have an influence on the organizational structure and operational systems in an organization. Both are mechanisms for the coordination of organizations: structure as an integrating mechanism for organizational activities, and culture as an integrating mechanism concerned with behavior and values within organizations. Organizations and individuals need an understanding of these mechanisms in order to manage uncertainty in the face of ever-changing markets and business conditions. An effective alignment of structure and culture provides a means of getting people to work together to reach strategic goals and achieve an organization’s vision. Together they provide a focus to enable organizations and individuals to reduce uncertainty, variability and ambiguity, so providing a framework for acting in a consistent manner. Structure and culture have overlapping functions; however one mechanism is not necessarily a substitute for the other. While structure helps an organization in defining objectives, the culture helps in achieving those objectives in viable manner. Therefore, culture is also critical in the achievement of the defined objectives. More specifically, culture is a function of behavior and relationships patterns. External Links:
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The textbook indicates that Structure and Strategy have a reciprocal relationship. How so? Pick one company and identify the corporate structure from their Web Page – how does how they are organized represent their Corporate Strategy? (Minimum 2 Paragraphs) Be sure to cite your sources and include the textbook content to support your position. Once you have submitted your initial post, engage in a discussion with a
minimum of two of your classmates by thoroughly reviewing their post, providing comments and/or questions, to understand or contradict their position. Relationship between Structure and Strategy in Organizations Organizational structure refers to how activities are ordered and organized in an organization to achieve a set of goals. It defines how all the pieces, parts and processes work together. On the other hand, organizational strategy refers to the plan of actions that an organization takes to achieve organizational objectives. Structure and strategy are interconnected in many ways.
It takes the right structure for a strategy to succeed. Management that is solely focused on results can have a tendency to direct everyone on what they need to do without paying attention to the current way the organization works. Walmart Example A good example is Walmart which has a hierarchical and functional structure. This structure ensures that the firm has set standards and procedures to be followed across the firm, leading to improved efficiency, less risks, and reduced costs. Thus, the structure supports the low-cost strategy used by the firm. Walmart competes based on prices by offering low prices to consumers compared to other competitors. This is achieved by having a highly structured system that ensures low operational costs. The cost saving benefits are then transferred to consumers through low prices. If you would like to get a customized paper at as low as $5 per page, contact us through emailDoes structure follow strategy?Structure follows strategy is a business principle that states that the divisions, departments, teams, processes and technology of an organization are designed to achieve a firm's strategy. This may seem obvious but in practice the opposite often happens.
Why is the relationship between strategy and structure reciprocal?Strategy and structure have a reciprocal relationship: Structure flows from or follows the selection of the firm's strategy but ... Once in place, structure can influence current strategic actions as well as choices about future strategies. A firm's growth patterns determine its structural form.
What is the structure of a strategy?Strategic structure would be the relationships between the different elements of strategy. If you have a list of goals, even smart goals, you have developed objectives but may not have a structured strategy.
What comes first between strategy and structure?“Structure follows Strategy.”
That is to say, all aspects of an organization's structure, from the creation of divisions and departments to the designation of reporting relationships, should be made while keeping the organization's strategic intent in mind.
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