Organization Structure And Strategy Implementation

An organization is a system of people, technology, resources and information designed to achieve

specific objectives. An effective organization facilitates the completion of tasks derived from the strategy
chosen by the organization to achieve its objectives. An organization structure conveys how work is
devided and assigned to people, and how activities of people performing their duties are coordinated in
the enterprice. Because the nature of the work is determined by the firm’s organization strategy, the
organization structure that coordinates that people performing the tasks must follow the firms
organization strategy. For example, a firm that has a simple business will use the functional structure, at
is growth and gets into new business , it will adopt the multidimentional structure. If the firm chooses to
diversify by acquisition into unrealated businesses, it will adopt the holding company or conglomerate
structure. The more an organization structure is suited to the firm’s current strategy, the easier the task
of strategy implementation. The evidence shows that for any strategy, the high performers are those who
have achieved a fit between their strategy and their organization

Human Resources and Strategy Implementation

Just as the culture and organization structure of a frim must be suitable for the implementation of its
strategy, there also must be a proper “fit” between the nature of the strategy and the individual with the
responsibility for this implementation. For instance, a manager who has been highly successful in
managing a high-growth “star” business my not be the right person to manage it when it becomes a “cash
cow”. As stated by Lorange and Murphy

Mature “cash cow” businesses and newly emerging businesses pose very different managerial challenges.
In the former case, competitive success depends heavy upon highly efficient, cost-conscious
management. A streamlined internal organization might significantly lower such a business’s cost function
and thereby provide it with critical competitive advantanges. In the latter case, success in the competitive
battle would probably hinge much more on the ability to “adapt” efectiely to a rapidly changing
environment by means of new or revised product and market alignements. Certain managers will excel at
cost-conscious, efficient management in a relatively stable environment, while others will find their true
metier in an entreprencurial setting where the external parameters are constantly shifting. Form a human
resurces point of view therefore, the critical problem is the attainment of an optimal match between
competitive strategic needs and the skills and strengths of individual managers.

A useful framework for linking the strategic situation with the specific characteristics of ideal candidates,
developed by grestein and reisman