A seminal book on the history of strategic decision-making at the highest levels of Corporate America, including DuPont, General Motors, Standard Oil, and Sears Roebuck, was written by historian Alfred Chandler of Harvard Business School and published in 1977. It was published under the title The Visible Hand: The Managerial Revolution in American Business. Chandler established a maxim for the ages in this work, and strategists and consultants have adhered to it as doctrine ever since. The maxim:
Of course, a company’s strategy establishes the competitive landscape and markets in which it will operate, declares its target market, and states the ways in which it plans to set itself apart from the competition. Chandler explained how Alfred P. Sloan’s strategic foresight contributed to General Motors’ successful development in the middle of the 20th century. Sloan designed the well-known GM divisions Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac, which are listed here in order of pricing segment and arranged according to market segments, so that each division could work to win over its targeted customer base. This is structure following strategy. Chandler demonstrated that a strategic shift brought on by new technologies or market changes is what causes the need to reorganize, or “restructure,” an organization.
An essential component of organizational design is how you structure your business or organization to best pursue your strategic goals. You must first choose the best structure for achieving your strategic objectives before deciding on other design elements, such as hiring and personnel development procedures, communication and decision-making systems, reward, recognition, and renewal systems.
Legal Forms and Traditional Structures of Organizations Legal Structures of Organizations Market Research — Inbound Marketing Planning Your Research Market Research Find and Feed the Feeling Strategizing Competitor Analysis Porter’s Five Competitive Forces (Part I) Porter’s Five Competitive Forces (Part 2) Competitive Intelligence Product Planning Product Management E-Commerce Sales and…
Copyright Carter McNamara, MBA, PhD All About Business Planning: Complete Manual With Updated Extensive Resources NOTE: You should heavily tailor your business plan to your current organizational situation. As a result, using a general business plan template run the risk of completely misrepresenting the required focus of your business plan. (This detailed guide is an addition to the topic How…
Napoleon Bonaparte’s biographers discuss his talent for assessing a situation with a single coup d’oeil, which is French for “a stroke of the eye” or “glance.” Napoleon was so knowledgeable about his strategic situation, including the environment, the enemy, the available technology, and analogous situations in the past, that he was able to comprehend and adapt to changing conditions without delay. ….
Strategic planning should aim to create a plan that is 1) pertinent, realistic, and flexible; 2) highly likely to be implemented; and 3) necessary to achieve the planning’s objectives, such as g. , a goal to advance to the following stage of development, increase market share, or endure significant cost-cutting A ….
The following is a list of the biggest errors I have observed strategic planning facilitators making over the years: Not getting sufficiently trained on how to do facilitating, e. g. planning the meeting, setting the agenda, establishing the ground rules, choosing methods to encourage full participation, implementing interventions, and handling conflict Not learning a variety of strategic planning models, ….
Reid Hoffman, the triple-billionaire founder of LinkedIn, has two endearing mannerisms that show how he views and approaches the strategic environment. First, he peppers his statements with the word so. Similar to how overusing the dreaded “uh” would irritate a speaking coach, but he uses it more like…
How can a well-intentioned startup avoid “Silicon Valley Syndrome” and actually use a social startup to create real value for society? This is a guest post from my colleague Adam Brock, Director of Social Enterprise at Joining Vision and Action (formerly JVA Consulting). At the turn of the 20th ….
A comprehensive online course is available from the Consultants Development Institute that teaches how to facilitate strategic planning for any kind of organization. There is an open enrollment pro bono audit track in the series Facilitating Strategic Planning. You have free access to all of the courses, resources, tasks, and discussion forums with that Audit Track.
Paul DePodesta was recently appointed Chief Strategy Officer of the Cleveland Browns of the National Football League, as described in Moneyball and the Work of the Strategist. This is crucial because, as any Moneyball fan knows, Mr DePodesta has devoted his professional life to the game of baseball, not football. This matters to the community of strategic ….
To think strategically, you must consider the big picture—the various forces at play in your competitive environment. Anticipate the future. Use your right brain for insight and planning, and your left brain for intuition. According to Isaac Newton, “truth is the product of silence and contemplation.” ” Here are 50 tips and ….
Where can you turn for wisdom when you are faced with the most crucial and strategic decision of your life? Can you find understanding in a book of history? Kennedy did just that. In most cases, learning new skills involves trying something out, failing, and trying again until we succeed.
The results are in – Execution trumps strategy. Even if your business plan has excellent strategies, poor execution will make it a huge failure. It seems like the solution is not what you think it is, so just hire the right people, right? At least according to a recent Harvard Business Review Article. Five Myths About Effective ….
I went to a B corps celebration last week in Colorado. These are for-profit businesses that have been recognized by the nonprofit B Lab for achieving both business and social objectives. What I observed was that there was a stronger emphasis on this vibrant community as opposed to previous discussions among B Corps.
Strategy vs Structure
Why is strategy important?
A company’s growth and goal-achieving can be planned for with the aid of a business strategy. Business owners can benefit from developing a strategy in the following ways:
What is strategy?
A company’s strategy is its plan of action for achieving its objectives. This typically appears in the business plan, a document outlining the objectives and strategies of a company. A business strategy can detail many company elements, including:
What is structure?
An organizations structure reflects the overall company formation. The organizational structure describes many components within the business, including:
There are many different types of organizational structures. Each one has its own benefits and possibilities. The structure you choose could affect your strategy. Alternately, the methods you select might influence the format you employ. Some companies change or refine their structure over time. Here are a few common structure types:
Hierarchal
In a hierarchal structure, the company divides employees into groups. Each group has a designated manager or leader. The middle managers report to upper managers or executives, while these leaders report to another manager. This organizational structure might improve communication and provide employees with a clear path for career advancement.
Functional
A functional structure is a common formation in modern businesses. Employers are divided into teams in this structure according to their responsibilities. A financial business, for instance, might have a marketing team, a sales team, or a technology team. This structure can increase collaboration and productivity.
Matrix
Employees are divided into groups in a matrix structure according to their skill sets. For new tasks, they are accountable to various managers, such as a functional manager and a project manager. This kind of organization encourages communication and can lead to a more adaptable workplace.
Divisional
Division structures categorize workers according to their location, products, or services. For instance, a business with several locations might have a division for each nation they operate in. This structure is most common in large or global companies. Companies can use it to monitor their performance and productivity for particular locations or services.
Flat
In a flat structure, employees have more decision-making power. They report directly to upper-management and may have more responsibility. This structure is common for new businesses or start-ups. It can reduce costs and improve colleague relationships.
Why is structure important?
A company’s operations and expansion are significantly influenced by its organizational structure. An organizational structure can help businesses achieve the following:
How do strategy and structure influence each other?
A business’s structure and strategy are both crucial elements, and changing one may have an impact on the other. Some experts contend that business owners should select a strategy before deciding on a structure. Others believe structure should come first. You may choose to design either component first, depending on your industry, business, and decisions, but understanding how each one affects the other could help you make crucial business plans. The following are some ways in which the two aspects may interact:
Strategy shifts structure
The structure may alter or change in response to a company’s strategy. A business may need to alter its organizational structure as it develops specific objectives, marketing plans, and market research. For instance, a business that wants to open a new location may need to change the number of teams and departments it has. To achieve the updated objectives from their business strategy, they might decide to modify their current structure.
Structure supports strategy
A company’s organizational structure can aid in achieving its objectives. The organizational structure may alter as the company expands and runs as new positions and personnel are added by the leadership. This change to the structure may eventually change the strategy. For instance, as a business expands, it might switch from a flat structure to a functional one. They may adjust their tactics as a result and include specific objectives for new departments.
FAQ
What is the link between strategy and structure?
The flexibility of strategies available to firms. Prior to developing an action plan, strategy should come first and should be compared to the structure and capabilities of the organization.
What are strategies for structure?
Structure supports strategy. If a company changes its strategy, it must also alter its organizational structure to accommodate the new strategy. When it doesn’t, the organization is pulled back to its old tactics by the structure, which functions like a bungee cord. Strategy follows structure.
