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Mintzberg (source) and other early theorist build business upon competition in the market place. As theorists evolve, they began to move to theories that are more revolutionary, such as Blue Ocean. According to Marcus and Kim (source) innovation drives firms to new markets were competition is no longer relevant. As technology increases, what a firm can achieve one could draw a correlation of innovation to technology. This paper will outline the interconnections and roles of strategy, structure and technology as it pertains to a business's organization, how structure directly correlates to strategy and how technology is being used as a strategy for long-term organizational sustainability.
Early psychologists provided an insight into individual behavior within organizations particularly on aspects of motivation and leadership. The Hawthorne studies of 1927 led to a realization of the importance of social phenomena, such as the informal groups, group norms and conformity (Hawthrone Studies, 2008). Valuable as these micro-level studies were, they suffered from the problem of reductionism, making it difficult understand the link between the behavior of individuals and the structure of the organization in which they worked. Organizational sociologists took a wider perspective, setting the organization within its environmental framework, specifically in relation to society and its institutions. Some sociologists have examined formal organizational structures. Morgan (1986) provides a classical interpretation of organizations. Dating from Weber's (1947) early work on bureaucracy, sociologists have taken a particular interest in non-profit making organizations. Organizations are not merely physical; they are also social and technological systems: they are multi-dimensional, with aspects, which are immeasurable (Shafritz et. al 2005). Drawn from physical and engineering models, systems theory considers organizations as systems with boundaries which make exchanges with the environment and must adapt to environmental changes in order to survive.
Thompson & McHugh (2002) point out that most of the literature about organizations is about work organizations. They argue that the distinctive nature of management, control and other social relations in such organizations is due to their profit-seeking nature. But they also concede that all large organizations share some characteristics noting that, as Weber (1947) recognized, there are continuities of structure and practice deriving from the bureaucratic form present within all large-scale organizations. They also acknowledge that many organizations within the public sector have been operating within a market environment.
According to Gortner (1997) "An organization, by its most basic definition, is an assembly of people working together to achieve common objectives through a division of labor" (p. 297). A business offers a way of using personal attributes within a group to complete more than can be accomplished by the collective efforts of group members working individually. Business organizations are formed to deliver goods or services to consumers in such a manner that they can realize a profit at the conclusion of the transaction. Over the years, business analysts, economists, and academic researchers have pondered several theories that attempt to explain the dynamics of business organizations, including the ways in which they make decisions, distribute power and control, resolve conflict, and promote or resist organizational change.
Interconnections and Roles of Strategy, Structure and Technology
There is a direct connection between the formal and informal framework of policies and rules, within which an organization arranges its lines of authority and communications, and allocates rights and duties (Galbraith, 1994).Organizational structure determines the manner and extent to which roles, power, and responsibilities are delegated, controlled, and coordinated, and how information flows between levels of management. This structure depends entirely on the organization's objectives and the strategy chosen to achieve them. In a centralized structure, the decision making power is concentrated in the top layer of the management and tight control is exercised over departments and divisions. In a decentralized structure, the decision making power is distributed and the departments and divisions have varying degrees of autonomy.
Strategy vs. Structure
In the summer of 1965 Dr. Peter Buck, decided to invest $1000.00 in a submarine sandwich shop. One could submit he did not begin with thoughts of strategy, structure or technology but instead with an idea. We could speculate that when he handed Fred DeLuca the money that he more than likely said; we make a good submarine sandwich and I bet we could make a lot of money selling them. Fred looked at Dr Buck and simple asked how it works. Little did he know more than 43 years, 30,000 stores, in 87 countries later he would be starting the ultra successful franchise now know as Subway(Subway Web Team, 2009). One could also suggest that according to Weber's Theory of organization that divisions were established, where by Fred Deluca were the Division of Labor and Dr. Buck was the Administrative Division. Businesses are created because a need is identified in a certain market. Once a business understands, what it is trying to supply to the consumer the business can better determine how to provide their product. The need has to first be identified and then we can go about the business of developing the strategy of meeting that need, the structure best created to support that strategy, and the technology best used to sustain the growth of that need. One cannot help but to ask is strategy based upon structure or vice versa. It is the preverbal which question which came first the chicken or the egg or in this case, what came first the structure or the strategy. In our example of the subway company, the organization clearly came before strategy. The organization may have fallen into place through the natural selection but nonetheless it was established from the very beginning. T.W. Malone (1987) technology can be used as strategy. Organizational sociologists took a wider perspective, setting the organization within its environmental framework, specifically in relation to society and its institutions. Some sociologists have examined formal organizational structures, particularly in relation to technology
Classical economics viewed the organization as a single decision-unit engaged in maximizing profits. It ignored the possibility of conflict between owners, managers and employees. The obsession with competition failed to take into account the other goals, which may take precedence in organizations. Organization theory partly owes its existence to a reaction against such simplistic ideas. It became necessary to understand behavior, which seemed to be irrational.
In conclusion, this paper discussed the role of strategy, structure and technology and how they interconnect. Structure and strategy may be different dependent upon the type of organization but a business must be properly organized to implement the company's strategy. Technology must be adaptive to the economic changes in the market place to be viable to long term organizational sustainability.