Structure Strategy And Impact On Business Performance Business Essay

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A widely known theory suggests that a proper strategy-structure mix enhances the performance of an organization. (Tobias Wiegl, 2008). Generally, when executives come up with a strategy for their organizations, they invariably take into account the environmental and industrial conditions pertaining to their arena of operation. They then get into assessment of the strengths and weaknesses of the competitors they are up against(W.Chan Kim,2005). Most companies generally choose to differentiate their products from the competition for a premium price or persue lower costs. The organization designs its own value chain accordingly(marketing, human resources,manufacturing). The bottomline is that the company's strategy is based on the environment and other factors surrounding it. In other words, this clearly illustrates the fact that “strategy shapes structure”.

2. Problem discussion and purpose

“Structure and Strategy have a reciprocal relationship” (Micheal.A.Hitt, 2006). It is widely believed that a company's profitability depends on the strategies its management adopts.If we take Wal Mart as our example, its strategy of realization on cost savings from effective information systems and supply chain and giving it back to its customers through lower prices enables it to gain a bigger market share than any other player(Charles Hill, 2008) .In general, this relationship denotes that the structure follows or implies from a strategy (Micheal.A.Hitt, 2006). The general nature of this means that the structure/strategy relationship means that changes to a company's strategy (which includes long term and short term goals) will mean a change in structure as well. It also means that a company can be vigilant in its processes to ensure consistency with respect to quality of the deliverables and changes strategies according to the structure. The later case,that is “Structure drives strategy” usually happens in cases of monopoly where there is a need to deliver good and quality products, irrespective of the time and amount spent on them.It is also important that organizations match each strategy with each structure changed to ensure consistency in performance. We will also focus on the changes cmpanies have brought about taking into consideration the ever changiing consumer needs.

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The dissertation will focus and critically examine both the mechanisms and will try to arrive at a conclusion as to which of them is best suited for different cisumstances.

3. Theoretical framework.

We will look at both the mechanisms described in the section above and will take the cases of five companies listed in fortune 500 list and will examine the most crucial decisions involving changes in the strategy/structure and will present them. The dissertation will also involve SWOT and PEST analyses of companies chosen and try to analyse the the impace on the business performance based on the decisions taken by the managements, involving changes in structure and strategy. We will focus on cases where competitors have led managements to make decisions on changes pertaining to structure/strategy.The dissertation will also try and investigate into some of the decisions taken by the organization on a structural front with respect to automation of processes and their impact. The following five organizations will be taken up as case studies

  1. Wal- Mart Stores
  2. Apple
  3. Gold Man Sachs
  4. Pepsico
  5. Coca Cola

The dissertation will majorly revolve around the following questions

  • What is the role of competitors in the decision making process of the company pertaining to structural changes?
  • How can an organization continously adapt its structure to the ever changing consumer needs?
  • In the process, what impact can it have on the strategy to ensure sustained organizational growth and performance?

4. Data collection and analysis method

We will be using secondary data most of the times to analyse the changes in structure and strategy. The data will be analysed in both qualitative and quantitaive ways. Quantitative data will mostly be used to figure out the impact created on businesses after the decisions and will try to gauge the impact on the organizations.We will paralelly draw the comparison with some of the competitors to the companies chosen and list out their figures.

5. Expected conclusions

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The objective of the dissertation is to understand the structure-strategy relationship and understand the mechanisms of “structure shapes strategy” and “strategy shapes structure” models and try figuring out which fits in what circumstance using a few set of case studies.

References

1) Strategic Management : Competitiveness and Globalization : concepts and cases

Micheal.A.Hitt, Duane Ireland,Robert. E. Hoskisso

2) Harvard Business Review 2009

W.CHan Kim,Mauborgne

3) Strategy, Structure and Performance in a Transtion Economy

Tobias Weigl

4) Essentials of Stratrgic Management

Charles Hill, Gareth jones