What Is the Relationship Between Organizational Structure and Strategy?

The so-called organizational structure strategy refers to the long-term planning for the development and change of the internal organizational structure model of an enterprise in accordance with the requirements of the company's overall business strategy, business environment, policies, and the interrelationships between organizations.

Organizational structure strategy

So-called organization

Generally divided into three types:

The main forms of organizational structure strategic innovation are:

(1) the tendency of softening of the organization;

(2) Establish a hybrid organizational structure;

(3)

The organizational structure of any enterprise is:

In the relationship between strategy and organizational structure, who decides who and who obeys them is the focus of people's attention.

American Scholar

1. Volume expansion strategy phase:

In the early stages of industrial development, the external environment of the company was relatively stable. In some cases, as long as the company expands the production quantity and improves the production efficiency, it can obtain high profits. In this case, the company adopts a volume expansion strategy, that is, expanding the number of products or services in a region. In line with this, the organizational structure of enterprises is relatively simple, often only need to set up an office to perform pure production or sales functions.

2. Regional proliferation strategy stage:

With the further development of industrialization, when the production or sales of a region can no longer meet

In the mature period of industrial development, in order to avoid the risk of investment or operation and continue to maintain high profits, companies often develop new product series that have nothing to do with the company's original products, and even merge and produce companies that produce such new product series. Is a variety

More specific guiding principles are proposed for better coordination of strategy and structure:

(1) A company with a single business and a leading business (that is, the company mainly operates in an industry field) shall be organized according to a functional structure.

(2) Companies that diversify related products or services should be organized into

From Chandler's analysis of the four stages of the historical development of American industrial enterprises, it can be seen that the strategy that responds first is the strategy, and then the organizational structure responds to environmental changes under the promotion of strategy. This formed the leading role of strategy and the lagging of organizational structure

1. Leading of strategy: It means that the change of corporate strategy is faster than the change of organizational structure.

This is because once a company realizes that changes in the external environment and internal environment provide new opportunities and needs, it first responds strategically in order to seek economic benefits.

For example, the prosperity and depression of the economy and the development of technological innovation will stimulate the development of enterprises or reduce the existing products or services of enterprises. And when the company has accumulated a lot of resources, the company will also propose a new development strategy accordingly. Of course, a new strategy requires a new organizational structure, and at least to some extent, the original organizational structure needs to be adjusted.

2. The lag of organizational structure: refers to the change of organizational structure is often slower than the change of strategy.

There are two reasons for this:

The first is a certain time course between the new and old structures. When a new environment emerges, companies first consider strategy. After the new strategy is formulated, the enterprise can reorganize the organizational structure of the enterprise according to the requirements of the new strategy.

Second, the old organizational structure is familiar, accustomed, and easy to use. When new strategies are formulated, they often still use the old powers and communication channels to manage new business activities. They always think that the effective organizational structure does not need to be changed. When threatening their personal status, power, and psychological security, they often resist the necessary reforms in various ways.

It can be seen from the leading nature of the strategy and the lagging of the organizational structure:

In the process of environmental change and strategic change, there is always a stage of using the old structure to promote a new strategy, that is, a period of alternation.