Strategic Management: Formulation and Implementation

At The Corporate Level, Is The Structure Compatible With The Firm's Business Units?

For instance, a product divisional structure may be more appropriate than a geographic divisional structure for a corporation with business units that produce fasteners, cutting tools, and hand tools. However, a geographic divisional structure may be better suited to a corporation with business units that sell retail clothing and shoes.

Are There Too Few Or Too Many Hierarchical Levels At Either The Corporate Or Business Units Level Of Analysis?

Flat organizations, with relatively few hierarchical levels and wide spans of control, are better suited for dynamic, fastchanging environments than tall structures are. In contrast, tall organizations, with relatively numerous hierarchical levels and narrow spans of control, operate more effectively in stable, predictable environments that flat ones do. Therefore, it is important that an organization's structure match the nature of the environment in which operates.