What is the relationship between organizational structure and strategy?
The organizational structure and strategies are related because organizational strategy helps society to define and build its organizational structure. The organizational structure of the company is based on the outcome of the analysis of the organizational strategy. The Company will use these results to determine its concentration areas and how to place it to succeed.
One of the first steps that the company takes in its initial stages is to assess its operating environment in order to determine the conditions under which it must work. This includes control of competition, consumer trends, culture and other factors. The company will find the strengths and weaknesses of its competition, consumers' shopping habits and its economic abilities. If the competition was selling its own product for $ 10 (USD), the company would have to work out if it is best to sell your own product over or at this price. The sale of its own product with a discount is an astrategie that could reach a certain demographic groupwell. On the contrary, the sale of the same product over the price of competition is also a strategy that could provide exclusivity and attract certain demographic groups.
The company also finds out what kind of market exists in its environment by exploring people in this environment. If most people are highly educated with greater expenditure power, an exclusive product can be attracted to them. If most customers belong to lower income, the sale of the product will work better. Other organizational strategies may include outsourcing of some jobs to minimize costs. It may also include the location of a production plant in cheap countries that allows companies to offer its products for a competitive price.
The relationship between the organizational structure and the strategy becomes Clearer when the company's strategy is introduced. With a clear focus of what he wants to achieve, the organization will beTop to reconcile its structure in such a way as to achieve it best. It allocates responsibility for optimal results, creates branches and decides whether the individual effort or group participation is the best method to achieve their goals. The organizational structure and strategy will also help the company decide whether the tone of the company should be strictly formal, semi -formal or informal. All these decisions can be made after determining the company's organizational strategy.