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Organisational structure must be considered as part of strat

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Jodie-Rane Schram

on 12 December 2014

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Transcript of Organisational structure must be considered as part of strat

Organisational structure must be considered as part of strategic management. DISCUSS.
Structure-Strategy Debate

Presented by :

Miles & Snow - Organisational Strategy, Structu, and Process.
The Adaptive Cycle
The Strategic Typology
Theories on Management
Minztberg (1980)
Five Structural Configurations
Simple Structure
Machine Bureaucracy
Professional Bureaucracy
Divisionalised Form e.g. Sony
Chandler (1962)
'Structure follows Strategy'
Strategic Management


Developing the strategy
Values Assessment
Vision and Mission
Strategy Design
Choosing among alternative strategies
Organisational Structures
Matching Structure to Strategy
The McKinsey 7-S Framework
Ensuring that all the sections of an organization work in harmony
The McKinsey 7 Ss
3. Systems
4. Style
5. Staff
6. Skills
7. Shared Values
Put Strategies into action
Matching Structure to Strategy
Source: R.Waterman, T.Peters and J.Phillips, 'Structureis not organization', Business Horizons, June 1980,pp. 14-26: p. 18

recruitment (passionate, committed employees)
socialization (training)
reward (public praise)
human rights
animal rights
Chandler is the pioneer of the strategy-structure debate.

He puts forward the argument that whenever a new strategy is introduced, it leads to a new structure being developed.

Chandler proposed a fundamental rule : 'Unless structure follows strategy, inefficiency results'.

Concatenation - accumulation of all previous strategies and structures.
Analyzes how well an organisation is positioned to achieve its intended objectives

Helps to improve performance/examines effects of changes within an organisation/determines how to best implement a proposed strategy

Model states that there are 7 elements which need to be alligned for an organization to be successful

Hall & Saias (1980)
The different organisational structures we discussed about earlier somehow match to what Chandler says. We use different types of structures to implement different strategies.

HP as an example.

SAAB acquisitation by GM.

Further Theories

To what extent must structure be considered in the process of implementing a strategy?

This varies from business to business.

Some strategies can be implemented by changing the structure of the business.

Other strategies need to be formulated based on the structure of the business.

The following theorists give their opinion about the relationship between strategy and structure
Existing organisational structure determines strategic opportunities
Strategy follows structure
Strategy can emerge, occasionally, from a given structure or as the result of a contextual development and emerging from interconnected structures and strategies
The Simple Structure- Small Firms
An organization with a simple structure has authority centralized in a single person, a flat hierarchy, few rules, and low work specialization.
The Functional Structure
In a functional structure, people with similar occupational specialties are put together in formal groups.
The Divisional Structure
In a divisional structure, people with diverse occupational specialties are put together in formal groups by similar products or services, customers or clients, or geographic regions.
The Matrix Structure

In a matrix structure, an organization combines functional and divisional chains of command in a grid so that there are two command structures—vertical and horizontal.

1995- founded LUSH
result of variables:
culture - unique
the past and present functioning of the organization
history of success and failure
Encourages Fluid Movement between Structures in order to suit the overall strategy.
Relationship between strategy and structure
is complex and iterative
We understand that sometimes strategy follows structure but most of the time its structure which follows strategies set.

Businesses rarely adopt only one structure but they are likely to blend into different structures to face challenges which come up during the implementation of strategies.

Structure must definitely be part of strategic management
but it is also important for the structure to be flexible to adapt to strategies.

D.J. Hall and M.A. Saias, 'Strategy follows structure!', Strategic Management Journal , vol. 1, no. 2 (1980), pp. 149-163.
Changes to the strategy
Changes to the structure
What could be the Pros and Cons of a structural change?
What other initiatives beyond Structural change might be necessary in order to create 'One Sony'?
Full transcript