Question

In: Economics

For an organization to be successful, all of its pieces cannot depend on other parts of...

For an organization to be successful, all of its pieces cannot depend on other parts of the organization for its success. agree or disagree? why?

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Expert Solution

The strategy of a company is its blueprint for the entire enterprise that sets out how the organization will use its major resources. In other words, the strategy of a company is an action plan that aims to achieve specific goals and stay in good stead with buyers and sellers.
On the other hand, the structure of an organization is the way the organization's pieces fit together internally. The strategy and the structure have to be seamlessly woven together in order for the organization to deliver its plans.

In other words, organizational structure is a term used to highlight how a company thinks about hierarchy, assigns tasks to staff, and ensures collaborative work for its workforce to achieve a common goal. The aim is to avoid overlap of tasks and confusion among the workforce, especially when it comes to laying a strong foundation for long-term productivity. Task overlap, a situation where two or more employees in different departments perform the same task, is costing a company money. This creates confusion, inefficiencies and lack of accountability— because, basically, no individual has a clear obligation for who does what, where and when.

It is important to stress that structure has been seen as separate from strategy for too long. Revising systems are often seen as ways of improving performance, promoting collaboration, building synergies, removing or creating new divisions or reducing costs, including staff. Sure, this can be achieved through consolidation, and more. What was less apparent is that structure and plan are mutually dependent. You can build the most effective, team-oriented, synergistic system possible and still end up in the same or worse position if you don't follow a good strategy.

Structure is not necessarily a map of the organization. Structure is all the individuals, roles, policies, methods, culture, technology and related elements that the organization contains. It defines the workings of all the pieces, parts and processes. To achieve its mission and goals this structure must be fully integrated with the organization's strategy. Structure backs strategy. If an organization changes its strategy, its structure needs to change to support the new strategy. The system behaves like a bungee cord when it doesn't, and forces the company back into its old strategy.


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