by Ronald Claiborne

Created on: August 18, 2011   Last Updated: August 22, 2011

Organizational structure contributes to business strategy by increasing flexibility, providing supporting technology, and providing access to resources.  Structure influences strategy in many ways but none as important as the ability to change to meet the demands of a fast-paced global society.  Technology, globalization, political instability, and economic shifts create situations that require organizations to change swiftly or cease to exist.  Organizational structures that follow the pattern of organizations of the 19th and 20th century face the possibility of extinction unless leadership initiate structural changes to facilitate new strategies to develop a sustainable competitive advantage.

Increase Flexibility

Making changes to an organization’s structure can facilitate business strategy by streamlining the decision-making process.  The growth of knowledge management and knowledge workers as key resources in organizations allow organizations to restructure organizations in a manner to reduce the levels of management.  This move, along with the introduction of technology, can drive the decision-making process down to the grass root level of an organization making decision-making a quicker process.  Creating a leaner organization allows an organization to become pro-active rather than reactive to change.

Provide Supporting technology

The proliferation of information makes it necessary for organizations to hire more knowledge workers and employ knowledge management in the organization.  Managing the vast amount of information in a responsible manner supports the knowledge creation process in an organization.  Knowledge workers take this information and turn it into knowledge the organization can use to develop strategies to create competitive advantage for the organization. The more expert knowledge workers an organization has, the more apt the organization will become a learning organization and become innovative in generating new strategies for the organization to pursue.  Therefore, the introduction of technology as a key process in an organization provides an organization’s strategist with the ability to develop quicker, more accurate strategies.

Provide Access to More Resources

Restructuring an organization to include more knowledge workers, a knowledge management system, and the latest and best in technological support opens up avenues to a plethora of methods to improve business strategy.  Every knowledge worker the organization hires come with a network of friends who are professionals in their respective fields.  When organizations use knowledge management and tap into those networks the possibility of developing effective business strategy improves exponentially.  Considering that each of these highly professional individuals in this network has access to information in various professions, organizations can develop strategies that are global in scope.  Therefore, how an organization aligns its processes and resources will ultimately influence the quality of business strategy.

Learn more about this author, Ronald Claiborne.
Click here to send this author comments or questions.