Meyer
and Rowan (1977) have described organizational structure as complex relational
networks that exercise co-ordination and control thereby influencing
organizational efficiency and outcomes. Organization structure influences
strategy implementation because it facilitates communication and information
flow; controls allocation of the resources; assigns duties and
responsibilities; serves to define jobs and work groups such as project teams,
departments, quality circles and influence technology and culture adopted by
the organization (Veasey, 2001). Organizational structure is created through
the process of organization architecture and organization design. Organization
architecture is a wider concept of organization design that incorporates the
social and physical components of the organization in addition to the structure
(Veasey, 2001) Organization design on the other hand focuses on formulation of
structure component of the organization. Organization structure designed is a
function of environment, strategy and growth which are dynamic (Daft, 2010).
Organization design is a continuous managerial process that seeks to develop a
fit between the dynamic changes of environment, strategy or growth and the
organization structure. Das et al, 2000 are of the view that a structural fit
once designed reduces organizations turbulence, increases stability and
legitimacy of structures leading to successful strategy implementation. Burns
and Stalker (1961) talk of organic and mechanistic structures in explaining the
concept of organizational structure flexibility. Flexibility determines the
organizations ability to adapt to the changes in the factors of environment,
strategy and growth. Organic or simple structures are more fluid and exhibit
higher flexibility because they are less formalized; more flat; have horizontal
and diagonal communication networks and emphasize on team working arrangements.
Mechanistic or complex structures are rigid and are characterized by high
formalization, vertical communication networks, emphasis on individual working
as opposed to teams and they are tall. Porter (1986) conceptualizes that
organic structures are more appropriate in strategy implementation because the
structures can be conveniently reconfigured to suit the implementation strategy
or plan adopted by an organization and they flexibly adapt to the external
organization.
Strategy development though a critical mental configuration
phase on how the strategy should be designed is only important if the strategy
is successfully implemented (Alton and Ikavalko, 2001). Strategy implementation
involves several variables that are internal or external to the organization
(Pearce and Robinson, 2002). The variables central to success or failure of
strategy implementation include; nature of the strategy, internal policies and
support systems, resources allocation, fit between structure and strategy,
trans-organizational arrangements such as strategic alliances, mergers,
acquisition or takeovers and organization social settings in the form of
leadership, communication process and organization culture. Strategy
implementation is contextual to an organization with each of the variables
affecting implementation of strategy differently in different organizations.
A strategy once formulated requires implementation for it to
provide solutions to the needs that necessitated its formulation (Aosa, 1992).
Vertical design of organizations and allocation of roles across the hierarchies
require that strategy drawing be undertaken by the board of directors and
strategy implementation to be done by senior managers and employees at the
respective departments (Hellriegel et al, 2005). However, the sensitivity,
complexity, importance and associated consequences of failure dictate that
strategy implementation be a team work process that cuts across the hierarchies
of an organization. Thompson et.al, (2007) are of the view that strategy
implementation should be backed by an implementation strategy in the form of a
program or plan. The plan needs to be proactively drawn with clearly defined
implementation timeliness and responsibilities allocation. The plan guides the
organization during the monitoring and evaluation process to determine the
success or failure of the implementation process
Depending on the implementation strategy adopted, each level
of management has a role to play in the strategy implementation process
(Hellriegel et al, 2005). Implementation strategies which are strategic in
nature involving trans-organizational arrangements such as organizational
restructuring, strategic alliances, mergers, acquisitions and buyouts shall
require involvement of the board of directors and to an extent approval by the
shareholders. Implementation strategies which are tactical in nature such as
work design, vertical integration with suppliers and other service providers,
tactical strategies in functional areas of production, marketing, procurement
etc. are carried out by middle level management at the departmental level.
Lower level management operationalizes tactical strategy implementation through
work design and scheduling, job performance and achievement of targets. In
summary, strategy implementation is an integrative and participative process
that is pervasive to the whole organization (Thompson et al, 2007).
Typically, an organisation sets goals and adopts an
appropriate strategy to attain those goals. The organisational structure, in
turn, should support strategy implementation. An effective strategy
implementation is one which fits the envisaged organisational structure. A
strategy-structure fit has implications for strategy implementation and
subsequent organisational performance (Child, 2015; Donaldson, 2012;
Zakrzewska-Bielawska 2016). Strategy determines the range of resources and
levels of geographical diversity and therefore the structure required
(Donaldson, 2012). For instance, if a multinational organisation wishes to
penetrate its target market with high-quality standardised products with little
localisation, a higher level of centralised coordination would suit such
strategy (Child, 2015). On the contrary, a decentralised organisational
structure is more suitable for the innovation centred exploration stage
(Zakrzewska-Bielawska 2016) and start-up phase (Child, 2015), allowing a
greater level of creativity and interdependence between different functional
departments. Unlike centralised decision-making, where decisions are made at
the top-level and passed down to lower levels, decision-making is decentralised
in a flat organisational structure. In this way, regional units would be in a
better position to react quickly to emerging operational issues.
Although strategies are often formulated in isolation from the factual structure, organisations would benefit
from cohesive modelling, where strategies at every level of the organisation
are supported by the relevant structural elements. Multinational corporations
often adopt a combination of centralised operations with a varying degree of
localisation, depending on organisational goals (Donaldson, 2012). For
instance, Japanese corporations like Sony and Toyota, according to Child
(2015), can gain competitive advantage by producing high-quality standardised
products in low-cost locations, which are then marketed globally at highly
competitive prices. To achieve such position a high-level of centralised
coordination with limited local customisation is required. By contrast,
numerous dispersed, specialised, and decentralised regional units combined with
centrally coordinated worldwide operations would allow for product
differentiation resulting in competitive advantage for multinational
corporations; such a transnational strategy would require a relatively flat,
global matrix structure (Child, 2015).
Matching Structre with Strategy
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