Ronald Reagan T.

Alonzo
PhD BA

Organizational Theory
Dr. Richard Simangan

Structure follows Strategy or Strategy follows Structure

Strategy is a pattern or plan that integrates an organization's major goals, policies and
action sequences into a cohesive whole. It is a practical plan for achieving an
organization's mission and objectives. Organizational structure is the formal layout of a
company's hierarchy. Both strategy and structure are crucial elements of doing
business, and even companies that do not have formal strategies and structures likely
still have both in one form or another.
Strategy-Structure Relationship
Strategy and structure are two different concepts that are interdependent of each other.
Strategy must go hand in hand with the organizational strategy. When a company
changes its structure it also need to change its strategy or the existing strategy will
change itself to fit to the new structure. Likewise, when the strategy is changed the
structure must be changed to support the new strategy.
Whether a strategy follows structure or structure follows strategy is dependent on the
situation the organization is in. When one wants to establish a new organization he
considers the environmental condition where they will operate i.e. competitive situation.
The strategic alternative available to the organization then can be shaped by the
structure (environment). If there are more players in the industry the strategy of the
organization in penetrating the market would be different as that of when there are only
few players in the market.
When an established organization changes its strategies the existing structure must be
change to fit the new strategy. The structure must be aligned to the strategy formulated
by the organization if they are to realize long term success.
Strategy and Structure Alignment
Strategy and structure are intertwined with each other. When a company makes
strategic changes, a structure that must support the strategy must be well thought out.
Every individual in the organization must work in consonance with the established
strategy to ensure that it will be successful. A change in strategy means that everything
in the organization changes. Structure, on the other hand, is the framework that permits
for the successful implementation of the strategies. The kind of strategy to be employed
is best based on the kind of structure the organization is in. Thus, the decision to make
changes in one must be supported by the change in the other.