Not too long ago I bought my first 4x4 vehicle. The original owner proudly spoke of the truck's ability to handle the toughest terrain, the muddiest marshes, and the sandiest beaches. I was sold! After all, TV commercials showed off road trucks handling any situation. What I did not know, however, was that a once smooth driving vehicle needs a heavy duty front-end alignment after just one off road adventure. Without it, there would be a struggle over which direction I wanted to drive, and where the truck wanted to drive.Organizations are very much the same. An organization's strategy, which is the purpose, direction, or "big picture," is like the driver. The structure, which emphasizes how work is divided, and asks who is responsible for what, who has authority, what is centralized or decentralized, is like the truck itself. When an organization's strategy and structure are misaligned, the outcome could be like my struggle with the truck. But when an organization's strategy and structure are aligned, the ride is much smoother.For organizations to compete effectively today, companies must have a clear and concise strategy. The successful firm will ask what its future goals are and determine which direction it is headed in. Furthermore, a good strategy will be highly valued by employees and customers. Jesus demonstrated an example of good strategy in His word. "For which of you, intending to build a tower, does not sit down first and count the cost whether he has enough to finish it,"( Luke 14: 28).Following the strategy, an organization must choose a structure that best fits the strategy and will allow the organization to move forward successfully. The type of structure that best fits an organization depends on the objective and strategy of that organization. Although many firms still use a centralized, hierarchal structure with many rules and regulations, as long as the firm's strategy accommodates a centralized kind of structure, no changes should be made. For example, United Parcel Service, the largest package delivery company in the world, employees 300,000 people worldwide and delivers 13 million packages every business day. The success of UPS is attributed to its efficiency, which is rooted in a very centralized structure of strict rules and regulations.However, other organizations have a decentralized structure to fit their strategy. Nucor Steel is a good example. At a time when mammoth steel companies were too slow to respond to competition and overburdened with layers of management and rules, Nucor Steel found its success in a simple, streamlined structure that allowed employees to be creative and make quick decisions. Nucor's strategy of, "Uncompromising quality,
responsive service, and competitive pricing through continuous innovation, modern equipment, dedication to customers and concentration on productivity from a highly motivated workforce," (2), finds its alignment in an organizational structure that is highly decentralized. Nucor's day-to-day decisions are made by three layers of management, including the general manager, department manager, and supervisor.An organization with a strategy-structure alignment or misalignment can be compared with the parable of the wise and foolish builders. An aligned organization is like building one's house on the rock. When competition becomes fierce and the external environment is rapidly changing, a good strategy-structure alignment allows any organization to adjust when needed and stay focused. However, a misaligned organization makes delayed and sloppy decisions, cannot adapt to change in the business environment quickly, and has employees who are not sure which direction the business is headed.The Bible says, "But everyone who hears these sayings of mine, and does not do them, will be like the foolish man who built his house on the sand. And the rain descended, the floods came, and the winds blew and beat on that house; and it fell," (Matthew 7: 26-27).When there is organizational misalignment, there is an overall feeling of chaos. For employees, strategic direction is vague. "Clarity of direction is lacking, hidden behind a haze of generalizations and grand strategy statements that don't provide meaningful direction,"(Clemmer 1). Alignment of organizational structure is also affected."Employees, teams, departments, and divisions struggle, often at cross purposes to hit a seemingly fleeting strategic target," (Clemmer 1). Further, misalignment also brings a weak knowledge of the target market, multiple, unnecessary layers of employees and management, and too many decision makers and paper trails,In organizations where there is strategy-structure alignment, value is created for employees of the firm and its customers. Clemmer goes on to say, "Organization structure and individual values align and support the strategy, designed intentionally to allow for maximum effectiveness and efficiency in creating a specific and enduring type of value for customers," (1). For the employee there is a clear understanding of organizational strategy with a structure that allows the employee to ultimately serve the needs of the firm's customers. Alignment also keeps the purpose of the organization simple and clear, promotes employee involvement of decision making and strategic direction, keeps the structure flat and to a minimum, and allows a better opportunity for communication.Works Cited
Clemmer, Jim. Practical Leadership.
www.clemmergroup.com/oassess/tr_strategy.
About Nucor. www.nucor.com/aboutus.htm.
Spirit Filled Living Bible. (1996). Nashville: Thomas nelson Publishers.Carmelo Di Salvo is an MBA with over a decade of experience in the business world, including 13 years in the hospitality industry. He is currently pursuing his Doctorate in Strategic Leadership at Regent University. His specialty is business consulting. Find out more at http://leadershipcentury.blogspot.com
Keyword : leadership, business, consulting, strategy, structure, leader, Christian leadership, organization
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