Question

Why is it very important that strategy and structure are properly matched together?

Answer 1

Strategy is nothing but the plan of action made to meet the overall goal of an organization Strategy provides proper direction to business in meeting the goals. Organizational structure refers to activities such as coordination and supervision that are important for achieving the organizational goal. Organizational culture and structure must fit because different structures gives rise to different behaviors. Structure can help in achieving the terminal values. So it is important to design structure keeping in mind the culture and what outcome is expected.

The organization structure depends on factors like size of the company, diversity of operations and the environment in which the organization operates. The external environment is one of the important factor for organizational structure. These aspects include uncertain conditions, external resources and competitors.

It is very important to match the strategy and structure properly because: -

• These provides focus and direction to business to meet the desired goals.
• These helps in identifying the key steps and how different organizational functions need to coordinate in order to achieve the goals.
• These help the organization to identify various factors that affect the organization both positively and negatively so that it can be evaluated and improved on a continuous basis.
• These help the managers to make strategic decisions based on the internal and external factors that influence the organization.
• These are dynamic process that adapt as per the changing business environment and thus ensures that organization is adaptable to change.
• These help in creating a performance culture by establishing targets that can be measured, controlled and monitored.
• These helps in identifying the corrective actions that is important to the success of the organization.
• These helps in achieving better business results by focusing on improving the business performance.