Term Paper on "Strategic Management"

Term Paper 4 pages (1278 words) Sources: 5

[EXCERPT] . . . .

One could make the case that either comes first, but the reality is that they both come at the same time. SunHealth, for example, has an idea that it might need to increase alliances, which is both strategy and structural, because it does represent a change in strategy but there is also a change in structure involved as well.

Student 3. The most logical premise, the one believed by most scholars of strategic management, is that structure follows strategy. Kim and Mauborgne (2009) make this case, among many others. They argue that there is a typical pathway by which strategic management occurs. First, executives analyze the environment, then they determine where the opportunities lie. The next step is to set out a strategy that will allow the organization to exploit those opportunities -- or defend against those threats -- and only once they have a strategy will they adjust organizational resources, including structure, to implement the strategy.

To the extent that a counterargument exists, it seems to flow along the lines that there is already a structure in place, and it is difficult to change the strategy too much unless you change the structure. Therefore, in order to execute any sort of new strategy, a change in structure will be the first step, and thus it is structure that helps to frame and define strategy, not the other way around. This view seems to be a minority view, but there is logic to it as well. In many cases, it is probably one or the other, I would think but not always the same one first. It could be different when given different companies and different scenarios, so there is not one universal rule that always applies to this question. For SunHealth, it might need to change structure first, and then worry about the strategic implications, because it needs to act fast on alliances in order to stay ahead of the competition.

Reflection. This assignment was valuable in terms of thinking about the linkages between strategy and structure. The initial question seems well-covered in the literature, which is good, because it allowed me to gather a lot of knowledge on the subject. Ultimately, there seems to be a fairly strong consensus, with some dissenting views. The consensus holds that the pathway of strategic management begins with strategy, from which everything else flows. This does have the assumption that structure is more malleable, whereas the scholars who believe that structure comes before strategy tend to take the view that structure is not all that flexible. I suppose it depends on the organization.

The takeaway from this is that when running an organization, you need to think about strategy and structure as linked. It is sometimes going to be difficult to determine what comes first, but they both constrain each other, because structure supports strategy and constrains it at the same time. As a manager in the field, it is critical to realize that one cannot change the structure without changing the strategy, as is the case at SunHealth, and likewise it is not possible to change strategy without at least analyzing the role that structure plays in that strategy. So there are some significant practical implications to this knowledge, and it was good to take a look at the issue from a few different perspectives.

References

Hall, D. & Saias, M. (1980). Strategy follows structure! Strategic Management Journal. Vol. 1 (2) 149-163.

Ingram, D. (2014). Strategy and structure in an organization. Houston Chronicle. Retrieved November 30, 2014 from http://smallbusiness.chron.com/strategy-structure-organization-2765.html

Kim, W. & Mauborgne, R. (2009). How strategy shapes structure. Harvard Business Review. Retrieved November 30, 2014 from https://hbr.org/2009/09/how-strategy-shapes-structure

Miles, R., Snow, C., Meyer, A., & Coleman, H. (1978) Organizational strategy, structure and process. Academy of Management Review. Vol. 3 (3) 546-562.

Whittington, R. & Mayer, M. (2000).… READ MORE

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