Strategic Management: Formulation and Implementation

Does The Structure Permit The Appropriate Grouping Of Activities?

The extent to which organizational activities are appropriately grouped affect how well strategy is implemented. For example, related product lines should be grouped together. Also, it is difficult to hold a product divisional manager fully responsible for sales a product when he had no control over either the development or the production of the product.

Therefore, to determine whether an organization's structure is appropriate for implementing the organization's strategy, a manager must analyze how compatible the structure is with such features as the organization's corporate profile, corporate strategy, business units strategy, need for coordination, number of hierarchical levels, degree of decentralization, and grouping of activities.

Matching Strategy And Structure

There is no one optimal organizational design or structure for a given strategy or type of organization. What is appropriate for one organization may not be appropriate for a similar firm. The choice of structure must be determined by the firm's strategy.