Well thought question, good. Let me say that structure of an organization affect strategy. But I would like to add: strategy implementation.

Alfred Chandler first examined this relationship in 1962. Structural dimensions (complexity,formalisation,and centralisation/decentralisation) must fit the requirements of strategy otherwise strategy will not be effective

Every organization is an entity defined by its membership ( employees ), Structure ( organization structure ) and system ( management system ). The strategic responses to the changes in the business environment are formulated based on the strength & weaknesses, which are internal to the organization ,as well as, on the opportunities & threats, which are external to the organization. The organization must gear up its efforts through mobilization of resources ,as well as ,effecting necessary structural changes for optimum utilization of the same for responding adequately to the business environmental changes. Therefore strategy and structure cannot be isolated and will certainly influence each other.

There is a great intercorrelation between both but once organizational structure determined then strategy fits with it.

Strategy, and strategy implementation, are products of where the firm is in the life-cycle and the market they compete in; looking from a high tech sector perspective, the younger and smaller the firm, the more flexibility it will have in choosing and implementing a strategy. As the firm moves through the lifecycle, they will grow, become more formalized, and move from outward looking and customer focused to large, formalized, hierarchical, and more inward looking. The more levels of management, the slower the response can be to recognizing the need for change, selecting the right change, and then implementing it. The "bandwidth" of available strategies also decreases over the lifecycle - so as firms become more complex, markets become less complex - and there are ramifications for the firm as they move from start-up to maturity.

I've attached two papers I presented at the IIE global conference earlier this month - it may help!

You may use different approaches to deal with the question. Theorists on population ecology of firms will emphasize the impacts of structure on strategy, with the notions of niches and competition. This links up with institutional theory on the role of processes of legitimation and isomorphism within specific industries and sectors. However, you may also look at the other end of the spectrum, with theorists on dynamic capabilities, who highlight the importance of management in designing the trajectories of firms. The latter stresses strategy over structure. Possibly, none of these theories provide a balanced view, but you can find empirical studies in all of them that might help you fit theory to the organizations you have in mind.

From the perspective of contingency theory, there is an interpplay between strategy, organisational structure and the environment.

Strategy is a plan for interacting with the competitve environment to achieve organisational goals. To achieve excellence, organisations need to build internal characteristics that contribute to their sought after success. Successful organisations must be flexible in order to react quickly to environmental changes.

Outstanding organisations are characterised by three design attributes: simple structure and lean staff, decentralisation to encourage enterpreneurship, and a balance between financialand non-financial measures of performance.

Need to design or born with...I will go with Donald Ibama Hamilton

The number of vice presidents in each field effect strategy and vice versa

It all depends on how you view organizations and what you deem strategy. At the broadest interpretation, the organizational structure affects 1) which strategies that can be perceived as structures shape local understandings; 2) which strategies that can be pursued as structures work as enabling constraints; and, 3) how strategies will be enacted as recipients draw on existing structures as part of their sense-making and practice. Conversely, strategies affect organizational structures by working to enable particular practices in both emergent and planned ways. Structures are in this way attempted organizational responses to enable particular strategic goals. Beyond these very basics, the answer is highly dependent on theoretical lens through which the phenomena is delineated and observed.

Strategy and Structure function interchangeably - process view. A concern though that I would raise is that this works well where there is a critical mass within an organisation (number of employees) , where we have firms that are micro in size (less than 10 employees) the theories of strategy / structure I believe have to be challenged. Most of the work todate within this area has examined large multinational companies as case studies but very little is in the area of the small organisation which tend to make up more than 80 % of most developed economies

@ Paul Davis -

That is a good point!! I wonder how this plays out with micro enterprises? When conceiving of a business, how does the creator's personality, for example, affect strategy and structure. Young enterprises are generally extremely agile and responsive to changes in the environment; however, I wonder how much does the personality of the main actor (the creator) affect responsiveness? It is generally accepted that small firms and start-ups tend to be highly autocratic in their management, which seems to be a contradiction to the notion of small firms being more flexible and responsive to environmental changes. What do you think?

@ Ariane

You said of the various theories "Possibly, none of these theories provide a balanced view,". That is a very astute point. I am wondering if perhaps there is a symbiotic relationship between strategy and structure and, perhaps, they might actually be inseparable.

@Bran Mitchell:

You said "the younger and smaller the firm, the more flexibility it will have in choosing and implementing a strategy.". That is true (theortically). However, there is evidence that in young and firms management tends to be autocratic - would this not affect responsiveness and flexibility?

@ Ra'ed (Moh'd Taisir) Masa'deh:

You said "... but once organizational structure determined then strategy fits with it."

I am wondering about the determination of structure. For example, in terms of new or very young firms, does structure emerge naturally, or is it formally determined. Or does formalization occur as the firm matures. In these types of firms, perhaps strategy might actually precede structure as necessary to survival?

@Ruth Maria Tappin

Thank you - great question - In fact, I think the more autocratic the leader in a young start-up is then the more agile they can be - the decision-making process is either one person or a very small group of owners or stakeholders (VC firms, etc.) and can exercise extreme agility in either implementing strategy or reacting to market shifts/competitor behaviour. "A camel is a horse designed by committee". So, decision outcome efficacy questions aside, the speed at which decisions can be made are faster than floating it up and down many levels of mature corporate hierarchy. [remembering, of course, that markets are very complex at the beginning and become simple as they go through the life-cycle to maturity and the opposite is true for the firm - the larger and more mature they get, the more complex the firm becomes internally).

@ Brian Mitchell -

Gosh, I never thought of autocracy in such terms! I really had to view your point of view from a perspective that I had not considered before. I have always equated autocracy with rigidity and inflexibility. However, I do understand your point that for a new start-up, the entrepreneur must (necessarily, I suppose) be autocratic since (s)he might be the only one in the organization performing wearing the hats of many department heads. I wonder if such entrepreneurs find it challenging to release and share authority as the business grows - or if there is a carry-over that affects structure... I am thinking of Ben & Jerry's (the ice cream guys) who started selling ice cream of a truck and ran a very democratic organization, with what seemed to be a very flat structure. Then I compare that to my aunt and uncle who started a spice producing company in Canada. It achieved some measure of success; however, they were not able to relinquish authority and theirs was a very top-down structure. Although they eventually sold it for a nice profit, I don't think that it achieved the growth level that it could have, due to their autocratic management style. They alone were responsible for strategy, and were slow to adopt new ways of doing things. Thanks for challenging me, Brian - I am going to chew on this some more.

Strategy often affects the structure; particularly major strategic changes at corporate level does affect. When an organization sees a particular capacity to be important, it either develops itself through enhancing its R&D ability, or acquires the capacity through takeover or some other means. In both cases the structure is affected. However incremental changes in strategy hardly affects structure.

What I found in my research on the first years of business start-ups is that entrepreneurs form the initial basic structures of the firm based on a combination of factors. Structure, using the terms of my study, are represented by organizational routines, which are not as fixed as they may seem. I would be careful to put too much weight on the personality of the entrepreneur. I found social learning very important, with the strong influence of role models, such as other entrepreneurs, support institutions, and buyers for their feedback on products. Entrepreneurial experience is another key factor, since previous learning helps the selection of what might work - or not. Last, institutional and market factors also play a role. For instance, environmental regulations are normative drives to the establishment of certain structures. Competitors often times set the tone for marketing strategies and for the pace of innovations. Entrepreneurs experiment a lot, since the routines of their start-ups are under test. Being more or less autocratic, however, is likely to affect HR policies, such as the degree of participation of interns and employees in decision making. I found, a wide range of ownership and leadership styles in my research. Ranging from the traditional autocratic model of voiceless employees to democratic start-ups in which employees would become associates of innovative products to which they contributed directly.

Dear Madam

As a faculty member of Business Adminstration, I think each of the organizatio of the world should prepare its strategy or strategies according to its organizational structure. There are some orgnizational structures like line, functional and divisional organizational structure. So, each of these organizational structure must have different strategies. Sometimes organizational structure affects its strategy positively and negetively.

@RuthMariaTappin- You are right - at some point the Entrepreneur has to back away and allow a more professional management team to run the organization - usually during the growth stage, but this is something even we haven't been able to come up with a "magic" point at which it should happen - although we think about it a lot with the high-tech lifecycle research.  The reality is that once the start-up hits a certain point it can't be led by only one person or a very small group of people - as was the case with your aunt and uncle - it has to be "day to day" managed by people who know how to manage growing or larger firms - the Entrepreneur can still steer the ship, but not be a micro-manager anymore.  The design of the organization - flat versus hierarchical or somewhere inbetween - will depend on the people, the market, the customers, the competitors, etc. in choosing the "right fit".   I don't think there is a perfect answer to the question - one size does not fit all - but in general terms I think you are correct that some Entrepreneurs have trouble relinquishing any power or responsibility.  And I also think that it has potentially negative impacts upon success of the firm. 

@ Brian Mitchell -

Thank you for a very thoughtful response, Brian. You said "The design of the organization - flat versus hierarchical or somewhere in-between - will depend on the people, the market, the customers, the competitors, etc. in choosing the "right fit". I don't think there is a perfect answer to the question - one size does not fit all..." Yes, I have to agree with this very pragmatic response. It would seem logical, no? Yet I have often wondered at companies that post vision statements that seem to imply both structure and strategy (if you read between the lines), but in actual operations and functioning so many seem to run in contradiction to these statements...

I believe strategy should precede structure because globalization and uncertainties in the market have moved companies from being mechanistic to organic in order to adapt.  So strategy helps a company to adapt to its new environment. I believe structure should be fluid enough to allow the strategy to work.