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B302 Block 5 - Week 23 Strategy in Action NOTES
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In an ever-changing world, organisations must make strategic choices based on solid analyses and decision making processes. This module adopts an innovative teaching approach to illustrate how strategic management theories and models can be applied in different contexts and how they inform decision...

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  • May 18, 2023
  • 2
  • 2022/2023
  • Lecture notes
  • Leanne howe
  • Week 23 – organisational structure & it’s implications for strategy

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Block 5: Strategy In Action


Week 23 – Organisational structure & it’s implications for strategy
Key considerations include a clarification of what organisational structure is, the evolution of views
on the relationship between strategy and structure, and the different forms of organisational
structure and aspects of organisational design that are relevant to designing strategy-supportive
organisations.

One of the leading scholars in management, Henry Mintzberg, defined organisational structure as
‘the set of all ways in which the work is divided into different tasks, achieving coordination’ (1983, p.
2).

Another influential scholar, John Child, had earlier defined it as ‘the formal allocation of work roles
and the administrative mechanisms to control and integrate work activities including those which
cross formal organisational boundaries’ (1972, p.2).

Ultimately, structure gets specifically reflected in managerial and employee relationships,
communications, decision-making processes, procedures and systems, which together allow
organisations to develop functions and achieve objectives (Maria Martinez-Leon and Martinez-
Garcia, 2011).

Organisational structure also reflects the way in which information and knowledge is distributed
within an organisation, which affects the effectiveness of their utilisation.

If an organisation adopts a cost-leadership strategy then its products must be produced both reliably
and cost effectively. This, in turn, requires a structure that facilitates coordination and minimises the
costs of product design, supply, operations and distribution.



A widely accepted contemporary view now is that strategy and structure are interrelated. They
therefore co-evolve and are influenced by the specific contingencies of the organisation and its meso
and macro environments (Lynch, 2015, pp. 405-8) This need for co-evolution becomes evident when
you think of the different organisational aspects associated with strategic management.

One key expectation of an effective organisational structure, according to Lynch (2015, p. 409), is
that it must be consistent with the mission and the goals of the organisation. Answering the
following three questions will help to strengthen your understanding of the link between an
organisations. Answering the following three questions will help to strengthen your understanding
of the link between an organisation’s structure and its mission.

- What type of organisation is it?
- Who are the major stakeholders?
- What is the mission of the organisation?

The answers to these basic questions enable the identification of important implications for
organisational design.

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