Structure Follows Strategy Concept: A Brief Introduction To Chandler’s Assertions
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21st Aug 2020
A business historian named "Alfred D. Chandler." wrote a guide book called Strategy and Structure which investigates the origins of the largest United States firms. He confirmed his 'Structure follows Strategy' research by using four case studies of American amalgamation that were dominating their industry from the 1920s and beyond. Based on his studies, Chandler presumed that the majority of companies usually follow alike patterns for the development of development. The students can use Chandler’s Assertion That Strategy Should Determine Organizational Structure Assignment Help offered by the expert to know about this. However, in this blog, we are going to give you brief introduction about this.
Here are the Major Conclusion That Came out from His Research
The observation highlights that the strategy of the company in time circumscribes its structure. The standard denominator of strategy and structure has been the application of resources of the enterprise to market demand. The structure is intended for integrating the existing resources of the company to prevailing demand: strategy is considered as the plan for the resource allocation to expected demand.
According to Chandler's 'Structure follows Strategy' research, the strategy defines the structure and environmental modifications result in decisive options. This sometimes requires modifications in the structure of the organization. More precisely, he explained that the structure of the organization tends to support the growth strategy of any organization. Chandler asserted that the majority of the companies have similar evolutionary patterns. Here are the stages followed under those patterns:
- A new strategy is designed.
- New organizational problems arise.
- Economic performance diminishes.
- A new relevant structure is created.
- Performance responds to preceding levels.
Except for new or improved strategies highlight similar areas as early strategies, structural re-adjustment usually becomes a portion for implementing strategy. The students can use the academic assignment help online from the experts.
How Chandler's 'Structure follows Strategy' Research is Being Challenged?
Lately, many new researchers have challenged Chandler's 'Structure follows Strategy' research on the assumption that it is too naive. They debate that selective structures can also affect strategy. Strategies formed should be functional, so if a particular new strategy needs extensive structural modifications, this matter would make the strategy less effective. In this way, the structure can form the selection of strategies. Therefore, the researchers emphasize that both strategy and structure are consistently evolving.
Through "structure follows strategy" assertion, Chandler also explained that the restructuring need is followed after a decisive shift accelerated by market changes or by the use of new technologies. The essential part of the organizational structure is the method that you use to organize your company for the optimization of the chase of strategic intentions. Other structural factors like decision-making and communication, hiring and faculty development exercises, systems, recognition, reward, and restoration systems, everything should be aligned throughout the determined structure. However, it is important to decide upon the optimal formation for achieving your strategic goals. When considering a shift in the structure of the organization, certain criteria should be followed for the creation of good structure.
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