Question

"Organisation Structure should reflect organisation strategy". Discuss. and please Refer to relevant literature relating to organisation structure and organisation strategy and use examples in your answer.

Answer 1

Organization structure and organization strategy are co dependent or compliment each other because organization structure should be such which help organization strategy to be successful and achieve strategic goals of the organization.

Strategy is the actionable aspect of running a business. It includes pricing models, marketing and branding tactics and competitor assessment. Formulating a strategy is done to determine how the business will fit within the market – and more importantly – how the business will compete.

Structure involves the nuts and bolts of the business, and it varies widely, based on the niche and business model. The structure begins with the job roles for executives, management and departmental needs.

Common universal departments include accounting, human resources, sales, operations and product development. A specific business model such as manufacturing will add departments such as floor production, shipping, supply chain logistics and so on.

for example-

Amazon started with e-commerce business selling books so it has small level organization structure with few departments but as the business grows, company started to take over other business and introduce new services like prime, web cloud computing a diversification strategy of business so organization structure of the Amazon started from small level to divisional organization structure.

in this example-

Amazon had flat organization structure at first where all the decisions were made by Jeff bezon who is founder and CEO of the company.

Now company grows so now some authorities and powers are decentralized to lower level employees. like Marketing manager has the authority to make decision regarding marketing and promotion. HR department had authority related to compensation and training of employees.

Amazon company had code of business in which all the standard policies and rules are followed by all divisions of business in all parts of the world where amazon operates.this refers to formalization of Amazon's organization structure.

If we talk about its chain of Command then all the strategic decisions like acquisition strategy or divesting or investment strategy of Amazon is at hand of CEO so chain of command is top to bottom. we see in example of Acquisition of Wholefoods where CEO took the strategic decision to acquire this company to compete with Walmart.

Amazon's organizational structure also shows the elements of departmentalization where each department has its own strategy and compliment overall organizational strategy like Marketing department is focused on increasing promotion and sale of its products, HR department is focused on improving performance of its employees, R&D department is focused on making its website more user friendly.

Amazon organization structure also shows span of control where Each department manager control the actions and activities of its employees and report to Top management means CEO.

Organization structure helps to create a platform of organization strategy to be performed and achieve the desired results.If an organization changes its strategy.This structure must be totally aligned with strategy for the organization to achieve its mission and goals set by CEO and founder of the company.