Monday, April 4, 2011

Organisational Strategy and Organisation Structure is further to our different posts on strategic management perspectives. Organization structure and strategy should support each other otherwise it could be very difficult for an organization to achieve it strategic goals. As evident from the McKenzie 7S model that Structure and strategy are just two of the many interacting aspects of organizing.

Organization structure is an integral part in an organization strategy. Traditional approaches to organization structure have been like Simple, Functional, Multidivisional and Matrix (team and project based). Recent approaches toward organization structures have been Network and Virtual Organizations. Environments are becoming increasing turbulent and require new approached towards design the structures of organizations. As Clegg (1990) argues that traditional approaches were more keeping in mind stability, rationality, planning, control, command, centralization etc. while new approaches are more towards disorganization, charisma, spontaneity, empowerment, participation.

Mintzberg (1979) propose that an organization can be thought of being made as six building blocks which are ideology, strategic apex, middle line, techno structure, support staff and operating core. Based on this, Mintzberg proposed six organization configurations that are simple structure, machine bureaucracy, professional bureaucracy, divisionalised, adhocracy, and missionary.

Simple structure is more CEO control and has strategic apex as key part of its organization. Machine bureaucracy has large regulated tasks and processes and has techno structure as main part of organization. Professional bureaucracy has operating core as its main parts. Divisionalised structure is based on more standardization of output.

Organization structure is a constant trade off between centralization and devolution, efficiency and effectiveness, task and process, formality and informality. As a strategist, one has to constantly evaluate structure of the organization with organizations’ strategic goals.

If you would like to know more about how organization’ strategy and structure are interrelated, please do email us to for assignment help.