Strategy in Action: Organizational Structure and Strategic Management - Term Paper Example

?Running head: STRATEGY IN ACTION 13th November Introduction Organizational structure entails all the activities that are undertaken by an organization in order to achieve its objectives. These activities include allocation of duties, coordination and supervision of the employees. One of the key ways through which organizational structure affects an organization is by providing a basis on which the procedures adopted by a firm rests. Secondly, it indicates the role of the individuals within the decision making process and their impact on the entire organization (Griffiths and Sambrook, 2010). Based on the situations that face the managements, it is essential for the managers to emulate an organizational style that effectively meets the needs of their company. Some of the notable organizational styles includes pre-bureaucratic, bureaucratic, functional, divisional and post-bureaucratic. Strategic management on the other hand, involves systematic collection of all the processes undertaken by a firm and aligning them with the vision and the mission of an organization. This aim of this paper is to indicate that organizational structure must be considered as part of strategic management. According to Nag et al (2007) there are three major processes that are involved in strategy formation. These include situation and competitor analysis, setting objectives and implementing the objectives. After a strategy is formed, it undergoes evaluation process that involves all the aspects of a strategy the affect an organization. Additionally, the suitability and the feasibility of the strategy are determined by use of the available or new human resources. During the stage of strategic implementation, three key steps are involved. The first one is organizing. Organizing entails making organizational as well as functional changes to ensure that factors that will led to the success of a strategy are put on board. The second step is resourcing. During the resourcing stage, the management comes up with the budget and the capital expenditure as well as the human resources responsible for overseeing the implementation of the strategy. Organizational strategy entails the plan that indicates how an organization will utilize the available resources to achieve the preset goals. It is vital to note that for any firm to be successful, it should come up with a vision and mission as well as objectives that are smart, measurable, accurate, realistic and timely. For any company to achieve its plans, it is essential for managers to ensure that both the structure and the strategy are combined together. Most importantly, any strategy that is undertaken by an organization must be divided into smaller tasks that are allocated to each of the employees based on their skills and the experience. In the contemporary business atmosphere, most of the firms aim at improving efficiency, creating synergy, enhancing strong team work and reducing the total organization costs by revising their structures. Even though this is achievable in most cases, it is not always possible (Heckscher and Donnellon, 1994). As earlier mentioned, for any strategy to be implemented, it should be evaluated. Companies that lack skilled personnel to undertake strategic implementation and evaluation have an option of hiring qualified personnel to undertake the process. Alternatively, the managers can hire the services of consultants who are experts in the filed of strategic management and leadership. In the two scenarios, there must be changes in the structure of human resources department to avoid conflict of goals. Connection between a strategy and structure Essentially, organizational structure is not the organization chart that depicts the flow of authority but it entails the people, position, technology and procedures that make up the organization. Most importantly, a structure indicates how all pieces and the procedures works or does not work together. This implies that it is vital for the structure to be intermingled with the organization strategy in order to achieve the mission and vision of the organization. In cases an organization changes its strategy, it has to make structural changes with an aim of supporting the new strategy. A good example of a company that has a sustainable strategy is Coca-Cola Company. Being an international soft drink company, the main strategy of Coca-Cola is to broaden its product portfolio. By introducing a new product such as Coca-Cola Vanilla in the Indian market, the company employs a workforce that includes market researchers, food technologists as well as finance specialists. Each of the individuals within the team is given a role to play for example, the financial experts is responsible for determining the cost implication of introducing the new brand, market specialist is given the duty to clarify the results of the market test while food technologist is responsible for evaluating the implications of the new product on the health of the consumers (Robbins and Judge, 2007). This implies that the company will hire more employees to ensure the success of the new products thus resulting to organizational changes. In a manufacturing company, manager’s objective is to increase the level of sales by possibly increasing the number of units produced per year. This can be done by restructuring the sales channels for example by increasing the number of outlets. If the sales channels are changed, then it implies that changes must be done in the order processing, engineering department and customer support sections. If no changes are undertaken, customers are left unsatisfied thus leading to low sales and profits even though the company was focused at improving its profitability. Similarly, if a company makes quality improvement of products and service a key priority must ensure that all the process, raw materials and even the human resources undergoes changes that support the desired changes in quality. If no changes are undertaken in the production process or the human resource is not improved for example through training then the final changes in the form of improved quality are not easily achieved. Implementing an organizational change is as essential as a strategy A research by First Concepts Consultants Company, advisors on leadership development and strategic management, indicates that even though for over 27 years they have assisted many firms in improving their strategies and creating new ones, majority of the companies are not successful. One of the major reasons as to why most firms are not successful in implementing strategies is that managers just give the new strategy and the vision to the employees and expect them to follow without making any changes on the structure. Whenever a new strategy is emulated, a complete change is required within a firm. This implies that the company’s structural system including the human resource must be rebuilt. Otherwise the old structure will cause the new strategy to fail (Jacobides, 2007). As the managers aim at improving their strategy, increase sales and profits as well as motivate their employees they must address the leadership, cultural, communication, people and structural changes for the entire or a section of their firm. It is vital to note when an organization takes an initiative to adopt a particular strategy, the contribution of all the stakeholders is paramount. This is based on the fact that a change in an organizational structure must be all inclusive to avoid the negative implications that come with changes. Conclusion At every stage of the strategy formation, including developing plan and allocating resources, evaluating and implementing the strategy, there is need to ensure that all the necessary actions are taken to be in line with the vision as well as the mission of a company. Based on the fact that making of a strategy involves processes, procedures and people with various skills it is imperative that the management puts together all the required resources to undertake a strategy. In case of lack of just one aspect, the strategy may fail an aspect that may deviate the company from its mission. Thus changes in the organizational structure cannot be overlooked if a firm is focused at improving its strategic management. From the above discussion, it is clear that a strategy is supported by a structure implying that change in strategy must be accompanied by a change in structure. As such it is also clear that organizational structure must be considered as part of strategic management. References Griffiths, L and Sambrook. S. 2010. Organizational structure for the twenty-first century. The Institute for Operations Research and The Management Sciences, 8, 43-47. Heckscher, C and Donnellon, A. 1994. The Post-Bureaucratic Organization: New Perspectives on Organizational Change. London: Sage Publications. Jacobides, G. 2007. The inherent limits of organizational structure and the unfulfilled role of hierarchy: Lessons from a near-war. Organization Science, 18, 3, 455-477. Nag, R., Hambrick, C and Chen, J. 2007. What is strategic management, really? Inductive derivation of a consensus definition of the field. Strategic Management Journal 28 (9):5-24. Robbins, F and Judge, A. 2007. Organizational Behaviour. New York: Pearson Education Inc. Read More