1. Jala
    September 6, 2012 @ 2:49 pm

    When might a firm finds that its aims and objectives are in conflict with stakeholders and critically analyze and evaluate how this might be resolved.Thank you


  2. Don Shapiro
    September 6, 2012 @ 3:12 pm

    You’ve asked a great question. Without over simplifying my answer, the starting point usually involves listening carefully to stakeholders on a regular basis so you know what’s on their mind, how they see things and what they think the firm’s aims and objectives are. If you ask a lot of stakeholders what their firms aims and objectives are and you get back answers which are different then the firm’s real aims and objectives as set by top management and the board, then you have a problem. If listening to stakeholders is a problem, then that needs to be resolved and normally indicates a leadership effectiveness issue.

    That doesn’t tell you what the problem is however. When you say “conflict”, that implies some type of disagreement by stakeholders as to what the aim and objectives should be. That is different than the stakeholders not understanding what the aim and objectives are or misinterpreting them. The later is a communication and education issue for the firm to get everyone on the same page.

    The former where stakeholders actually disagree with what the firm’s aims and objectives should be is a very different matter entirely. This calls for some type of planning and discussion process among everyone to work through the issues and move toward consensus. That requires specialized facilitation by an outside party who does not work for the firm. You need an objective outsider who can guide the discussions and individual efforts, help resolve the conflicts, help everyone look at the deeper issues that underlie the differences and move the group toward a common understanding that will lead to decisions everyone can support.

    I would be remiss if I did not mention the role of leadership in this. Often times when there is a conflict about the aims and objectives of a firm, it indicates that there could be leadership issues as well. If top management is not effective in their leadership roles, these types of conflicts can easily develop. When an evaluation is done of a firm like this by an outside firm (recommended for objectivity and expertise in these areas), leadership effectiveness is always included in the evaluation. It’s not enough just to resolve the conflict. You have to identify what caused the conflict in the first place otherwise it will occur again.

    If you work for such a firm or you head such a firm, you should reach out to me using the contact form from the navigation bar so we can discuss this further. We have processes for addressing all the issues discussed here.


  3. Haresh Kumar
    October 31, 2012 @ 6:35 am

    which comes first strategy/structure,if strategy then why? and if structure then why?


  4. Don Shapiro
    October 31, 2012 @ 10:43 am

    Great question Haresh. Strategy always comes first. What is the purpose of a structure? Why does the structure exist? What result is the structure intended to produce? Creating a structure just to create a structure serves no purpose and requires the expenditure of money without any thought about a return.

    Strategy defines what customers and markets an organization serves, what they are offering those markets, what makes them different and better than their competition, how they will offer this at an attractive price that they can make a profit at and much more. You have to know what you are offering, who you are offering it to and why you are offering it to them before you can create a supporting structure to carry out these strategies.

    Once you have created that structure, you then have to closely monitor both the strategy and the structure over time. If you make any adjustments in the strategy, you need to adjust the structure to support those changes. If you discover that something needs to be improved in the structure, you need to carefully consider whether those improvements will help or hinder the firms ability to execute its strategy.

    Many firms work on improving their people, systems, organization, culture and more. This is a good thing because they want to always be the best at what they do and that means continuous improvement. Too often, this is done without considering its affect on strategy and that’s where some firms get into trouble. Continuous improvement in how well things are done has to go hand in hand with continuous improvement in strategy.


  5. Andy
    December 1, 2012 @ 4:46 pm

    How can they (Strategy & Structure) mismatched when both both depend on each other? Thank you.


    • Don Shapiro
      December 1, 2012 @ 5:17 pm

      Excellent question Andy. While they are connected and dependent on each other, they can be separately and independently controlled. Top management can decide to change strategy and also decide to not make any changes to structure. Or they could revamp structure but not change strategy. I have seen both occur during my experience as a management consultant.

      When you change one, it will change the other because of the dependent relationship. That’s where companies get into trouble. They change one and don’t realize how it will alter the other. Then the other one changes and in a way that hurts them.

      Here’s a simple, classic and all too common example. Suppose a company has a strategy to deliver superior customer service. Every part of their firm has been developed to do this consistently. This strategy has resulted in their having an image of offering great service and support. Then profit margins get squeezed due to competitors actions and the company responds by laying off employees and shrinking some departments. They think they can do this without it affecting their service image. Usually, they are wrong because their service slips (the structure side) due to the change in strategy (making cost reduction a higher priority than service).

      Hope this helps.



      • percy
        July 26, 2013 @ 3:11 am

        what if a strategy implemented does not correspond with the organisational structure?


        • Don Shapiro
          July 26, 2013 @ 9:30 am

          Hi Percy,

          I will be happy to answer your question though I believe it has been answered through all my previous replies. Have you read the entire comment thread and post? If a strategy is not supported by the organizational structure, over time the structure will cause the organization to revert back to a strategy the organization structure does support. There is no way to sustain a strategy without the support of the organization. If a firm decides to initiate a superior service strategy, everything the organization does has to be designed to make that happen. Systems have to be adjusted, people’s roles and responsibilities have to be changed, new co-ordination and teamwork need to be developed, communications across all departments and functions must be upgraded, new training will have to be done, and much more. If you don’t do this, the strategy will fail and the firm will end up with the same service level it had before.


  6. organisational cultural change
    December 6, 2012 @ 7:25 am

    What’s up, its nice article about media print, we all understand media is a fantastic source of facts.


    • Don Shapiro
      March 3, 2013 @ 1:38 pm


      Thanks for commenting on the blog. Not sure how media print relates to an article about strategy and structure. Please clarify.


      Don Shapiro


  7. mado
    March 3, 2013 @ 12:46 am

    what is the contribution of the Organization structure to strategy implementation?


    • Don Shapiro
      March 3, 2013 @ 2:00 pm

      Hi Mado,

      Really good question. Thanks for asking. The structure of the organization will determine if the strategy can even be implemented and under what conditions the organization can deliver the strategy. Structure is everything that makes up the organization including it’s people, leadership, infrastructure, capital, technology and more. It’s all the parts and pieces that make up the organization and what it does.

      If an organization changes its strategy and starts implementing it, the success of this endeavor depends on the structure. You can’t successfully implement a strategy the existing structure doesn’t support. The implementation of strategy starts by reconfiguring the structure so it will support the new strategy. That may involve creating new departments, hiring people with expertise the organization now lacks, upgrading the skills and attitudes of everyone working for the organization, changing the organization chart, accessing more capital, developing new technology and software, changing physical facilities by either increasing or decreasing them, developing new methods of logistics and distribution if appropriate and so much more.

      A classic example of this issue is now confronting Best Buy. You may have read about the problems Best Buy, the electronics retailer, is now facing with large losses and having to address severe competition from Amazon, Walmart and Costco among others. Their recent press releases talk about matching the prices the other retailers charge.

      The challenge for Best Buy is that first it has to decide what it wants to be and what strategies will help it move in that direction. It seems to be toying with implementing a low price strategy. The problem is that it can’t just cut its prices to match these major competitors because it won’t make any money. All it will end up doing is churning dollars but not increasing profits.

      The reason for this has everything to do with Best Buy’s structure as compared to Walmart, Costco and Amazon. These three competitors are completely structured to deliver low prices and make a profit. All three of them succeed very well at doing this. For example, one of the reasons Walmart can consistently offer low prices across the board is because they eliminated an entire distribution channel between the manufacture and their stores. They did this by developing their own logistics and distribution system which is probably the best in the world. Both the efficiency of this system and the elimination of the profit an outside distributor would build into its prices gives Walmart an edge with their landed cost.

      For Best Buy to pursue a low cost strategy, it takes more than just lowering prices. They have to restructure their company and develop a distribution and logistics system like their competitors that can lower their total landed cost of product to their stores. That would require a huge investment on their part. If they don’t do that and lower their prices, they may increase their revenue but won’t make a profit off it.

      Further, they would be making a huge investment just to match competitors who are already world class at delivering low prices. They aren’t going to be able to beat those prices and they are taking a huge risk just to see if they could and get people to buy.

      You can see that for Best Buy to pursue a low price strategy would require a huge investment, restructuring and risk. Whenever an organization changes its strategy, it has to identify all the elements within its structure that must change to support that strategy. Otherwise, the strategy is doomed.


  8. kirsten erika ignacio lopez
    March 6, 2013 @ 6:15 am

    hi! how often does a company or an organization change their strategies?


    • Don Shapiro
      March 12, 2013 @ 5:31 pm

      Every company is different, every market is different, every situation is different so there is no single right answer to this question. Check out 100 companies and you will find 100 different answers to your question.

      Here is the more relevant point. Companies shouldn’t change their strategy just to change it or because they feel they had their current one for too long or because they see other companies changing theirs. There is no right or wrong number of times to change a strategy.

      Some companies have essentially kept the same strategy for decades with only minor adjustments. Others seem to change their strategies every few years. And then there are those that think a new year means a new strategy. Normally the later don’t last.

      Companies should keep their existing strategies when they work. That means they are producing good results satisfying both shareholders and customers and are holding their own against a changing competitive landscape. You change a strategy only when you have to or it makes sense to adjust to what you see happening in the future. Strategy is the primary way that companies adjust to change or fail to adjust to change. It’s how they keep their firms aligned with their marketplace and help them get an edge over their competition.

      If what a firm has works, no need to change it. If it’s not working or it looks like new developments are going to change the playing field, then altering strategy is a good idea. More often than not, the problem is with companies that change their strategies too often. That is because they haven’t done a good job of figuring out who they are in the market and are not willing to commit to a well thought out, long term approach for their firm.


  9. Noel
    March 27, 2013 @ 7:12 am

    Why does the structure of an organization follow the development of the organization
    strategy, rather than the strategy following the development of the structure?


    • Don Shapiro
      March 27, 2013 @ 11:31 am


      You have asked the most important question of all. Thank you for posing this. We all know the age old question, which came first the chicken or the egg. For that question, the argument can go either way. In the case of strategy, there is only one choice.

      For an organization to be successful in achieving its goals, it must have the right strategy. Strategy defines who the organization’s markets and customers are, what they want and need, what types of products and services will be offered to satisfy them, how to make, distribute, market and sell its offerings and how the organization will go about doing all that in a profitable way. The how includes everything from how it is made, who makes it, how it is distributed, what sales channels are used, how the market buys or acquires the product and service, how the firm differentiates itself from competition and alternative solutions and so much more.

      So strategy defines what business you are in, who you serve, how you serve your markets, and how you do this in a way that gets enough customers to buy from you a profitable price. There is no way to know what structure an organization needs until it defines its strategies. The organization structure including capital, people, infrastructure, assets, systems and so on can only be known once the strategy is known.

      For example, if you decide that you are going to be a virtual company using other firms to manufacture, distribute, and provide customer service, then you obviously don’t need to build a manufacturing plant, logistics system, customer service center, call service center and all the administrative support people and systems necessary to run these. You can set up in a small office with a small staff of key people because everything else is outsourced.

      On the other hand, if you go back to the birth of Federal Express which grew out of a college thesis, the company’s strategy was based on the ability to deliver packages “absolutely positively overnight.” That was it’s core strategy and that strategy encompassed it’s understanding of who it’s market was, what they needed and were willing to pay a profitable price to get and how it was going to do all this.

      Since nothing existed already to deliver such an amazing promise (at the time), the entire infrastructure to do this had to be built from scratch. That meant they had to create their own airline, with their own planes and distribution centers and trucks and local facilities to deliver on the promise. I believe the initial funding for Federal Express was over $200 million to make this happen. Their strategy detected the organization structure they needed to achieve it.

      Reflect on all this for a moment. If you don’t have a strategy, how in the world can you know what type of organization structure you are going to need? While strategy and structure are indeed married to each other, it’s always strategy that must lead the charge.


      • shirleen valley
        June 24, 2013 @ 11:47 am

        thanks so much, this answer have answered a question which has been bothering me for weeks now.Thumps up for the good work.


  10. Manisha
    June 13, 2013 @ 9:36 am

    what impact will it have on a company is there isn’t a strategy, structure and system?


    • Don Shapiro
      June 13, 2013 @ 3:07 pm

      The short answer is that the company will go out of business very rapidly. No business can exist without a strategy. Regardless of its structure and systems or the lack thereof, a business must have a strategy that defines what market and customers it is serving, what product or service it is offering that market, how it gets people to buy what it offers and how it does all this in such a way as to make a profit. You have to answer those questions to even have a business. Without it, you’re just sitting at home playing Frisbee with the dog.


  11. Work From Home
    June 13, 2013 @ 2:47 pm

    Hi there! Would you mind if I share your blog with my facebook group?

    There’s a lot of people that I think would really enjoy your content. Please let me know. Cheers


    • Don Shapiro
      June 13, 2013 @ 3:01 pm

      What is the name of this Facebook page and what is it about? Just wondering how you see the concepts of strategy and structure applying to someone working at home. What are the questions and issues where you feel this might apply?


  12. shirleen lilian
    June 24, 2013 @ 12:01 pm

    Hi DON Shapiro,
    you have done a very fantastic work, thanks for making me get quality marks in my strategy management paper, your answers answered all my questions, not forgetting those who asked the questions on clarification.

    Thumps up, love the blog article



    • Don Shapiro
      June 24, 2013 @ 12:04 pm


      I’m glad to hear this information was helpful. Where are you going to school? What program are you taking?


  13. zahnarzt-roemer.de
    July 7, 2013 @ 4:52 am

    Hi there, I want to subscribe for this weblog to get latest
    updates, therefore where can i do it please help.


  14. vijay
    July 18, 2013 @ 12:26 pm

    how strategy affect the organisational structure????


    • Don Shapiro
      July 19, 2013 @ 8:48 pm

      Interesting question. It depends on whether you are talking about modifying the structure based on a new strategy or how strategy might affect the structure over time.

      When we change a strategy, we need to review the entire organization structure to make sure the organization can do what the strategy calls for. If a firm decides to upgrade its service to become a top service provider, it has to look at what changes are needed in all areas that affect customer service. If the firm simply decides to embark on this new strategy and promote it without making structural changes, they will lose their market because they won’t be able to deliver on the promise.

      Whatever a firm does strategically whether its to become a low cost provider, sell through multiple channels, become an innovator, deliver better service, change the markets it serves, or other major changes, it must make major changes in its structure to successfully perform these strategies. They all call for some type of investment, addition or change to what employees do, and much more. The structure must support the strategy for it to succeed. You can’t change a strategy without changing the structure because the strategy won’t be implemented.

      Over time, a strategy can have a major affect on an organization especially if it has set out to be a top service or quality provider or leading innovator. These call for a continual improvement in how the firm performs. You have to keep finding ways to do things better and new ways to improve what you do. So over time, you keep adjusting the structure in order to maintain the strategy. If you don’t, what started out as great quality or service will end up being just okay quality and service a few years later. Successfully running a business today means you have to be continually changing and improving it to stay with the market and customer.


  15. Vesh
    August 26, 2013 @ 12:22 pm

    Very interesting article sir. Thank you. Could you please help me figure this out:
    How does strategy relate to the ‘People, Process, Technology’ triangle?


    • Don Shapiro
      August 26, 2013 @ 6:51 pm

      Hi Vesh,

      You’ve asked one of the most complex questions ever asked on this website though you might not realize it. A book could be written in answer to such a question. I will only offer some perspective.

      The People, Process, Technology triangle was created somewhere around 1990 give or take a few to address the relationship of technology products and development to everything else. Basically, when we looked at the fact that a majority of technology efforts fail, it became clear that more was involved than just the technology itself. We are dealing in a very complex environment.

      The truth is that this triangle is incomplete. People do like things in threes or triangles but that doesn’t mean they always work or at least in the way this triangle has been defined. Recently, some people have suggested that information should be added to this since it is separate from the technology itself as well as the people and process. But does People, Process, Technology and Information really address all the issues.

      Sadly, they do not. We are dealing here in the complex relationship of technology to everything else and how they all work together. Technology cannot exist in a vacuum. It is a means to achieve an end result. So the development of technology must be connected to what it is supposed to do which normally involves people in one form or another. And people must be involved to help develop and implement the technology. Process is the glue that is supposed to hold all this together so everything is integrated. Information is what technology normally produces, holds, analyzes, tracks and so on. So it must be accounted for since that is what people normally use technology for (though not always).

      And yet, all of this still fails to account for the complexity and the reality of how everything fits together from my professional perspective. Whether we say People, Process and Technology or add Information to this, we are still missing the biggest thing of all.

      The purpose is primary.

      What is the purpose of our efforts? What are we trying to accomplish? Who or what will benefit when it is done? How does it makes things better? Who will be better off and why? In all endeavors including technology, the purpose is always primary.

      So even if one accounts for the People, Process, Technology and Information, we are still a ship without a compass and direction. Where are we going with all these people, processes, technology and information? What is the purpose of this voyage?

      As the purpose changes, everything else changes as well. You may need different people, different processes and different technology to produce different information in a different way. So the problem with this triangle is that not only is it woefully incomplete and shortsighted, even expanding it can result in our failing to address the complexity and chaos of the situation.

      Strategy is about what an organization does to achieve it’s primary purposes. It encompasses both the goals, objectives and missions as well as the way they will be achieved. If our firm’s strategy is to grow our market share by selling through more channels, we will need to understand each of those channels so we can create a specific strategy for each one that will produce success. We will need information, metrics, analysis, tracking and more to do that. We will probably need some type of technology solution to improve what we offer and how we offer it to attract customers in each channel. We may even need technology to develop new solutions and develop how we can produce them better.

      Of course, all of that is going to require a mix of people with the right expertise and experience. We need people who understand each of these sales channels and what will be required to successfully sell through them. What these people know must be communicated to the technology people in some way and what technology develops must be communicated back to these people so they can evaluate if the technology can help achieve the strategy. That involves a lot of process to connect all of this and connect it to the information.

      Notice that all the People, Process, Technology and Information are driven by the strategy which includes the purpose and how the purpose will be achieved. Without an effective strategy, the People, Process, Technology and Information are worthless. They have zero value. They mean nothing in themselves unless they are focused on producing a real world result… a result that someone is willing to pay money for because they see a return from doing this.

      If you have read my article, you know that structure includes everything that exist inside of an organization which is necessary for it to achieve a productive result by implementing one or more strategies. So all the people, technology, facilities, tools, systems, communications and more are the structure of the organization. With this world view in mind, I would offer you a much more accurate triangle to replace this earlier, flawed version.

      Remember, the triangle you are asking about was conceived by technology people and people who deal with technology. It was not conceived by strategist and organizational development people with an eye toward the application of systems thinking to how an organization operates to produce results. So let me offer you a CEO’s version of what this triangle should be.

      Strategy, Structure and Process are the three elements of a total organization success triangle that uses technology and even develops technology for sale. The People, Technology and Information are a part of the Structure. The Process is the glue that connects everything together by connecting everything in the structure with everything else in the structure and all of that to the strategy. Process makes sure the right hand, left hand and third eye all know what each other is doing.

      Strategy brings into play the purpose, goals, objectives and missions we are trying to achieve through the use of the structure and process. Strategy tells everyone and everything what to do, when to do it and how to do it. It is the map that guides the ship toward the desired port.

      In other words, what good are People, Process, Technology and Information without a way to tell all of them what to do and why to do it? And what good is all this without being a part of an organized system that makes sure all the parts and pieces help each other to achieve the strategy?

      Every organization on the planet earth is about the successful integration of Strategy, Structure and Process. Everything an organization does is contained within those three elements. There is nothing else except the outside world of customers and constituents. The people, technology and process should be collecting information about those customers and constituents since they are used to create strategy. Strategy grows out of what an organization does for the outside world. So Strategy connects the outside world and the organization together.

      I hope this helps.


      • Vesh
        August 27, 2013 @ 2:45 am

        Thank you sir for taking the time out to reply.
        It really helps.
        As a novice business analyst just starting out in the world of systems analysis and design, it makes a big difference to have an experienced individual like yourself help me understand these complex frameworks.

        I understand that the organisation sits firmly on top of this incomplete triangle of ‘People, Process, Technology’. There is always an overriding business strategy that drives organisational strategy as well as information strategy.

        Current and emerging business strategy is enabled, supported, and unconstrained by the people, processes, technology, and information… I think that this equals alignment.

        I also understand that the whole point of all this is to see an increasing return on investment.


        • Don Shapiro
          August 27, 2013 @ 2:43 pm

          Great summary of the concept. And your last point simply can’t be repeated enough times. There must be an ROI. All that is being done has to produce a return to the stakeholders. If this is a business, then it must produce enough profit to deliver a good return to shareholders. If this is a non-profit, then it must deliver enough benefits to those it serves to justify it’s efforts. If it is a government, it must deliver enough benefit to its citizens for them to see a good return on their tax dollars.

          All the people, technology, processes, structure and more that makes up the organization have to collectively produce an acceptable ROI. That is their one and only job. Most organizations falter when some people and functions forget this. The purpose is always primary.


  16. Vesh
    August 28, 2013 @ 12:31 pm

    I was looking at the value chain of an organisation. I understand that the value chain model addresses the activities that create, deliver, and support a company’s product or service.

    Although the value chain model emphasizes the activities of the individual firm, it can also be extended to include the firm in a larger value system. This value system is a collection of value chains connected through a business relationship and technology.

    That said, sir, I would just like to here from your perspective, how do you think that the value chain fits into ICT?


    • Vesh
      August 28, 2013 @ 12:33 pm

      OR How does it relate to an organisations ICT systems?


      • Don Shapiro
        September 4, 2013 @ 1:24 pm

        Ahh, we’re adding a bit of Michael Porter’s value chain into the discussion.

        In Porter’s original view, he saw technology and information as supporting pieces to the primary functions that drive the value chain. At the time, it made sense. Today we need to modify that thinking.

        ICT in some firms is a supporting function to their primary functions. In other firms, ICT is a part of the firms primary function about what it offers. So ICT can have a substantial effect on value creation. In fact, ICT has resulted in tremendous increases in value because of its ability to do more things in a more efficient way then was possible before.

        Today, a firm must be excellent to outstanding in ICT in order to produce value that is equivalent to their competitors. Innovation in ICT can enable a firm to gain a competitive advantage and deliver even more value for a period of time.

        Even in those firms where ICT is still a support function, it has been shown to substantially increase the value that the firm delivers to customers versus firms that are weaker in ICT.

        So, I would modify Porter’s value chain and include ICT in the primary value chain. When we talk about industries or what goes beyond the borders of a company, ICT is even more important. In manufacturing, just in time inventory to eliminate holding unneeded inventory and only buying inventory that will actually be used requires a co-ordination between a firm and its suppliers through ICT. To me, that is not simply a support function since doing that adds value to the product that is being offered for sale. The more that firms partner with other firms and vendors to produce goods and services, the more important ICT becomes in the value chain.


  17. ignitious
    September 1, 2013 @ 4:49 am

    how does structure define strategy in a fast moving consumer goods industry.
    thank u


    • Don Shapiro
      September 4, 2013 @ 1:00 pm

      Hi Ignitious,

      You’ve asked a good question. The faster the marketplace and innovation moves, the more critical structure is to deliver effective strategy. Speed and change require quick adaptation to a moving target. In consumer goods, today’s hot product can be swept aside by a new entrant that gives people something new and better.

      That clearly happened in 2007 when Apple introduced the iPhone. The rest of the cell phone industry was not expecting something so profound that it would change the entire market. They didn’t even have Apple on their list of potential competitors. They also were not in serious development on a smartphone run by a computer.

      Nokia, Erickson, Samsung and Motorola could have developed such a phone. Steve Jobs mentioned it publicly in 2003. After the iPod became such a success, you would have thought the cell phone industry would see the writing on the wall. But though the signs were clear to some and the idea out there for anyone to grab, none of the cell phone manufacturers were moving down that path in 2007. They were all competing for the best “designer phone.”

      What does this have to do with structure? Everything!!! The very structure made up of culture, people, normal industry practices, systems and more all contributed to how all companies in the cell phone industry viewed the market and innovation. The culture of the industry and each company created a barrier that prevented all their bright, educated, experienced executives and technical experts from recognizing the need to develop such a device quickly. If there were any people in their firms who did see this, their recommendations were dismissed by everyone else. The structure prevented them from seeing where they needed to go and how quickly they needed to get there.

      Structures can blind entire companies and industries to market direction, what consumers really want (that they can’t express in a survey because it hasn’t been invented yet), competitive threats and innovation. The same thing happened and is continuing to happen in the retail industry due to Amazon.

      Walmart, Target and all the other retailers did not see Amazon as a potential threat when it first expanded beyond books. They literally didn’t think that many people would ever buy on the internet. Now, Amazon is Walmart’s biggest worry and threat. Yet, even though Walmart now recognizes this fact and is working hard to address it, they have failed to find an effective solution.

      The structure of Walmart comprised of its culture creates a way of thinking that blinds them to what Amazon does. Literally, the difference in the culture of the two organizations produces totally different thought processes and views of how to attract and satisfy consumers. Even though Walmart has created an on-line website and now created a separate division with its own President to run that operation, they still don’t understand what they are really competing against nor how to use what they have to out position themselves against Amazon.

      So structure is not simply about a list of people, positions, resources, systems, facilities and such that make up an organization. Structure is also the culture of the organization which defines the common way people think about things and view the outside world.

      To deal in a rapidly changing consumer environment, organizations need to find ways to break out of their cultural limitations. This isn’t just true for the consumer industry. It’s true for all industries and has been long known going back to Lockheed Aircraft creating it’s famous “Skunk Works” operation completely outside of its corporate structure. General Electric and Bell Telephone (Bell Labs) did the same thing. They realized that the culture of their organizations which worked great to deliver what had been created was not effective at innovation. They had to create completely separate entities far removed from corporate operations that could focus on innovation.

      That innovation had to be coupled with leadership at the top that knew how to integrate what these “Skunk Works” created back into the corporation. Walmart has not figured this out yet while the solution is so obvious to me. Of course, I’m not a part of their culture so I can easily see strategies they are blind to.

      Addressing speed and innovation requires a certain type of organization culture. Right now, we are seeing many storied brand names that are about to go out of business because they couldn’t respond to all the changes. In rapidly evolving markets, structure is critical for success.


  18. Cristine
    October 20, 2013 @ 12:09 am

    Why is it important for managers to carefully consider the type of organizational structure that they use to implement their strategies?
    thank you


    • Don Shapiro
      October 20, 2013 @ 12:29 pm

      Good question Cristine. Simply put, if you implement a strategy with the wrong structure, the strategy will fail. The people, human resource programs, assets, facilities, communications, technology, organization culture and values, and methods of leadership can be configured in a variety of ways. How they work together determines what an organization can and cannot do.

      Take the retail industry for example. Amazon, Costco, Walmart and Nordstrom each have different strategies and very different structures to implement those strategies. One of them could not just decide to be like the other. They would have to change their structure dramatically to do so.

      In N’Out Burger, Five Guys Burgers and Fries, McDonalds and Shake Shack all are very different from each other which is reflected in their structures. One could not become the other without changing those structures. It is the structure that enables them to do what they do the way they do it.

      You might want to reread the article and the entire comment thread to learn more about all the issues that affect the successful implementation of a strategy. When I look back over this comment thread, there is a small book worth of information to help you learn more about the whys and hows of this.


  19. Tom
    June 10, 2014 @ 10:26 am

    thank you sir but What comes first, organization structure or Management control system,


    • Don Shapiro
      September 27, 2014 @ 10:54 pm

      Management control systems are one part of structure the way I define it. If you read my article then you know that structure refers to all aspects of how an organization operates, it people, systems, technology and everything else necessary for it to do what it does. So control systems would be a a part of that, not separate from it.

      The actual organization of a business or what would be called the formal structure must come before control systems. Otherwise, what is there to control if there is no organization to begin with?


  20. rajesh
    June 21, 2014 @ 3:18 am

    Does Strategy creates complexity in determining organizational structure?


    • Don Shapiro
      September 27, 2014 @ 10:52 pm

      Yes, of course it does. Every single element of an organization’s structure must be evaluated in terms of how it supports strategy. That doesn’t mean the structure has to be complex except if the strategy is complex. Where an organization is going to market through multiple channels with multiple offerings, the structure can get very complex.


  21. Eshetu
    September 23, 2014 @ 11:52 pm

    my questions is in short what are basic questions asked the client organization to consult about structure, staffing, salary scale construction and other HRM


    • Don Shapiro
      September 27, 2014 @ 11:01 pm

      Hi Eshetu,

      Thank you for asking this question. While I would love to talk about the questions I ask clients, our methods which includes the questions we ask are proprietary. We do not publicly tell people what questions they should be asking. If an organization needs our help, then we use our own questions many of which are unique among consultants. Our questions are definitely not taught in any schools.

      Let me go a bit further. Even if I was to divulge the questions we ask, it would not help you or anyone else because you would not know how to interpret the answers or what follow up questions to ask. Consulting is both an art and a science. You cannot be effective as a consultant only through the science of learning information, questions and processes. You also must have talent at the art of how you do this. To be an excellent consultant, you must be able to create your own questions and not use someone else’s.

      We are known as the firm that ask the questions no one else ever asked. It is in the unique way we ask questions and how we interpret the answers that we are able to help organizations find better results.


  22. solomon
    October 12, 2014 @ 1:51 am

    The Anderson Corporation was started in 1962 as a small consumer products company. During the first 20 years the company’s R&D staff developed a series of new products that proved to be very popular in the marketplace. Things went so well that the company had to add a second production shift just to keep up with the demand. During this time period the firm expanded its plant on three separate occasions. During an interview with a national magazine, the firm’s founder, Paul Anderson, said, “We don’t sell our products. We allocate them.” This comment was in reference to the fact that the firm had only 24 salespeople and was able to garner annual revenues in excess of $62 million. Three years ago Anderson suffered its first financial setback. The company had a net operating loss of $1.2 million.
    Two years ago the loss was $2.8 million, and last year it was $4.7 million. The accountant estimates that this year the firm will lose approximately $10 million. Alarmed by this information, Citizen’s Bank, the company’s largest creditor, insisted that the firm make some changes and start turning things around. In response to this request, Paul Anderson agreed to step aside. The board of directors replaced him with Mary Hartmann, head of the marketing division of one of the country’s largest consumer products firms. After making an analysis of the situation, Mary has come to the conclusion that there are a number of changes that must be made if the firm is to be turned around. The three most important are as follows:
    1. More attention must be given to the marketing side of the business. The most vital factor for success in the sale of the consumer goods produced by Anderson is an effective sales force.
    2. There must be an improvement in product quality. Currently, 2 percent of Anderson’s output is defective, as against 0.5 percent for the average firm in the industry. In the past the demand for Anderson’s output was so great that quality control was not an important factor. Now it is proving to be a very costly area.
    3. There must be a reduction in the number of people in the operation. Anderson can get by with two-thirds of its current production personnel and only half of its administrative staff.
    Mary has not shared these ideas with the board of directors, but she intends to do so. For the moment she is considering the steps that will have to be taken in making these changes and the effect that all of this might have on the employees and the overall operation.
    1.What is wrong with the old organizational culture? What needs to be done to change it?
    2. Why might it be difficult for Mary to change the existing culture?
    3. What specific steps does Mary need to take in changing the culture? Identify and describe at least two.

    please can you share me some possible answers ?


    • Don Shapiro
      October 12, 2014 @ 1:30 pm

      Hi Soloman,

      As a matter of policy, we do not answer questions or analyze case studies that are for a classroom exercise. You will need to figure these answers out for yourself so you are the creator and author of the analysis. It is not ethical to ask professionals to do this and use their analysis in what you submit.

      Don Shapiro
      President and Founder
      First Concepts Consultants, Inc.
      Co-author, The Character-Based Leader


  23. Shivam Agarwal
    October 13, 2014 @ 11:06 pm

    Sir…i was wondering on all this from the society’s perspective.I believe that the ultimate aim of maximising ROI needs to be consistent with the idea of maximising societal welfare. Is it not feasible and desirable that a firm shares the ROI in forms so as to maximise welfare?


    • Don Shapiro
      October 15, 2014 @ 10:15 pm

      You have raised a good question Shivam. In an ideal world, what a firm does would benefit all. That is not quite how it works in the real world. Most business executives and owners see their ultimate goal as maximizing shareholder value through satisfying customers at a profitable price.

      It’s all about how the company’s actions return money to those who invested in it. More enlightened executives and owners will also consider how their business benefits the greater good and attempt to weave this into how the company does things. But this is still often limited by the need to pay back the investors who put up the money so the company can exist. Most of those shareholders don’t care about societal welfare and they are the ones who control what management ultimately does since they can have top executives fired who fail to deliver enough return.

      There are a few firms that do strive to do both and it can be feasible for certain periods of time. The trouble is that in the long term, there are going to be down cycles where profits are squeezed and the firm even has to run a loss. During those times, shareholders normally will not let a firm do anything other than conserve financial capital and reduce cost to protect their investment. For the ideal you describe to become a reality, it would have to be supported by the investor themselves. If you can convince investors to do that, then you can create and operate such a firm.


  24. Shivam Agarwal
    October 16, 2014 @ 11:09 am

    Sir what i observe and believe is that though this “Welfare Strategy” will create conpetitive advantage and sustained returns in the long run, strategists dont believe that this idea can prove to be fruitful in the short term…. And moreover, the enhanced ROI must not be a result of encroachment of stakeholders’ claims. I believe that even in the short run, the welfare strategy will turn out to be productive as it would increase confidence and trust on the organisation, hence adding value to the firm , to the shareholders…


    • Don Shapiro
      October 16, 2014 @ 1:44 pm

      You make some good points. I don’t disagree that this is possible. I know it can be done. The issue is the about “belief.” You are not going to convince anyone just with your belief. This is what I’ve learned from my experience in business. You need hard evidence to show the financial people this actually works. When you do that, then things will change. My focus is not on theoretical discussions of what may be possible or might be better. I focus on what we can prove to the business community will improve things because nothing short of this is convincing. To me, it’s about taking actions that make things better, not just talking philosophically about things.


  25. Shivam Agarwal
    October 16, 2014 @ 8:16 pm

    Sir are there ways to quantify the potential benefits which could be uaed to convince the owners?? Please suggest something.


    • Don Shapiro
      October 16, 2014 @ 8:26 pm

      Yes, it’s called a research study. It requires funds and experts to do. Normally they are done by university professors though there are private initiatives if you can get companies to pay for the research. You have to look at companies who are doing the type of Welfare Strategy you talk about and compare them against companies who are not doing it. Then you have to compare all their main financial results over time such as sales, profits, return on invested capital, return on assets, stock prices, etc. to see if the ones using the Welfare Strategy produced better financial results than the ones who didn’t. This is a classic research design. It can’t simply be an example of a company who did this because the other companies will say that company is an exception and not the rule. It has to be a formal research study of many companies. Nothing short of this level of research will be convincing. This level of research could get published in the Harvard Business Review and be very compelling. You might want to search through Google for existing research about this and see what you can find. Hope this helps.


  26. Rowland
    March 11, 2015 @ 1:04 pm

    Hi Don

    There are a number of strategies for example, competitive strategy, Blue Ocean strategy, emergent/incremental that a company may want to adopt. I know that company that strategies that develop on a incremental basis of historical and cultural influences and do not keep pace with what is happening to the environment end up with what is called strategic drift. My question – Is there a correlation between strategy selected and level of influence of history and culture of the organisation?


  27. anton
    March 16, 2015 @ 12:52 am

    I have a question “VISION DOES NOT SERVE ANYTHING IN PROFIT-ORIENTED COMPANY AS IT IS TOO LONG TERM FOR EFFECTIVE EXECUTION” It is mean that without good business plan , a company cant survive because if company have not aim for future it will lose all money very fast


    • Don Shapiro
      June 3, 2015 @ 12:26 pm

      Thank you for commenting on my blog. I don’t find a question in your comment. Can you phrase your issue as a question instead of a statement or clarify what you want to know more about?


  28. LISEMA
    April 28, 2015 @ 3:43 am

    How do i give an in-depth description of strategic management as a process? And an in-depth assessment of the concepts of strategy, strategic planning and strategic development?
    Lastly, how does the structure of the organization affect strategic formulation as well as decision making process?


  29. LISEMA
    April 28, 2015 @ 4:17 am

    Hi! How do i give an in-depth description of strategic management as a process? And an in-depth assessment of the concepts of strategy, strategic planning and strategic development? Lastly, how does the organizational structure affect the formulation of strategy as well as the decision making process?


    • Don Shapiro
      June 3, 2015 @ 12:24 pm

      Thank you for asking these questions. It appears to me you are asking questions that are academic in nature. Are you asking this because you are writing a paper? Or are you a professor looking for additional insights to structure your lesson plan?

      The purpose of this blog and all the replies to comments I have written is to educate management and future managers about the nature of strategy and structure. I do not want to be providing specific in-depth answers that end up being copied for a school assignment. I prefer that students read what I have written, read many other articles and books that address strategy and structure and derive their own conclusions. I would be happy to respond to questions about how my point of view relates to another expert in the field but not answer generic questions that appear to be from a classroom assignment.

      If a professor would like my insights to assist them, then I would ask that they communicate with me privately using the contact section so that those insights are not seen by students.


  30. m88
    May 5, 2015 @ 7:09 am

    Have you ever thought about creating an e-book or guest authoring on other blogs?
    I have a blog centered on the same ideas you discuss and
    would really like to have you share some stories/information. I
    know my readers would enjoy your work. If you’re even remotely interested,
    feel free to send me an email.


  31. Nijaz Nizar
    May 8, 2015 @ 9:30 pm

    If any change occurs in structure , strategy will change, so, how the strategy (Role of CMD and directors removed like auto-piloting) can be adopted in a software organization.

    If adopted, what will be the structure of the organization and how will it affect the strategy and what will be the new strategy?


    • Don Shapiro
      June 3, 2015 @ 12:10 pm

      Thank you for asking this question. There is no way for me to tell you what the strategy or structure of a specific company or a firm in a specific industry like software should be. Generic answers to such questions are worthless.

      Even within the same industry, each firm will have its own distinct strategy and structure. No two will be alike. There are no preferred or ideal strategies and structures for any industry including software. This is all about the art of strategy and structure and how well they align.

      The only way I could answer such a question would be to do an assessment of a specific company and then work with top management to develop the best strategies and identify how the structure and operations of the company need to be changed or improved in order to successfully implement those strategies. This all must be customized for each firm in each industry.

      There is no such thing as a correct strategy and structure in all situations. Never was. Never will be. Each firm in each industry and market must create their own unique strategy and unique structure to effectively support that strategy. If a firm duplicated what caused another firm in the same industry to succeed, they would most likely fail miserably.


  32. Zahra
    June 3, 2015 @ 11:55 am

    How does an organisation structure influence/affects strategy implementation


    • Don Shapiro
      June 3, 2015 @ 12:02 pm

      Thank you for asking this. This question is thoroughly and completely answered by simply reading my blog and then reading all the replies I have written in the comment thread. It’s all there.


  33. Don Shapiro
    June 3, 2015 @ 12:38 pm

    To all graduate students whether in a master’s or Ph. D program…

    I am now offering my professional advice and support to assist you with the research and writing of your thesis. After over 45 years in business management and 30 years as a consultant on strategy, structure, vision and leadership, I have found helping you with your thesis a very rewarding way for me to prepare the managers and executives of the future. With my background in research, business management and writing, I have discovered I can assist those of you writing a thesis in all aspects of your research study, analysis and how the thesis is written.

    I have a special fee structure for students that is affordable for those of you who truly want to be the best…to excel above the rest of your class and excel in the business world. If you are interested, please contact me using the contact page on this website.


  34. Zahra
    June 4, 2015 @ 7:39 am

    Thank you for the reply don sharpio. I’ve gone through the comment thread and still cant point out the “how” exactly. I swear it will be life saving if you just point out on how the structure influences the strategy implementation and then maybe going over the thread will enhance my understanding. PLEASE HELP SIR


  35. Zahra
    June 4, 2015 @ 8:03 am

    **Don Shapiro


    • Don Shapiro
      June 4, 2015 @ 1:23 pm

      I replied in the main comment thread.


  36. Don Shapiro
    June 4, 2015 @ 1:22 pm

    Hi Zahra,

    Okay, I will help you out here. I am going to be a little tough on you here because the answer is actually in everything that has already been written. If you are not able to discern it, you have to ask yourself why and learn something from that.

    The answer to what you asked for is actually in the blog and my response to a question asked of me in 2013. You may be so focused on the exact and specific terminology you are using, “strategy implementation”, that you are not seeing what is flashing right in front of your eyes.

    Before I give you the answer, I’m going to ask you a question so you can begin to figure this out for yourself. The purpose of everything I write is not to give people answers. That is never helpful. The purpose here is to teach people how to think things out for themselves so they figure out their own answers.

    The answers are here if you really think this out instead of looking for answers that are handed to you on a plate. In the world of business, we never get answers handed to us that way. You have to hear something, figure out what it really means, and then figure out the answer.

    What affects how well or poorly a firm implements anything they do? What is implementation?

    Think about these questions very carefully and don’t read anymore until you have a good answer to this question.

    If you understand what affects how well or poorly a firm implements anything, then you clearly understand what affects how a firm implements a strategy. Think about what strategies are. Maybe a firm wants to make a top quality product, offer the best service, offer the lowest prices, serve a specific group of specialized customers, keep its operating cost low, offer more customization in what customers can buy, create an image of prestige, be the fastest in going from idea to finished product, and a long list of other possible strategies.

    How well or poorly a firm implements or executes those strategies depends on how well the firm operates. How well the firm carries out what it’s supposed to be doing. The best strategy in the world doesn’t mean a thing if you can’t implement it, if you can’t get your organization to make it happen.

    How well a firm operates, does what it does, is its structure. Look back to how I defined structure in my blog. Structure is everything that occurs inside the organization including its organization chart, positions, culture, hiring and training practices, communication between employees and between departments, information flow, how decisions are made, the values and philosophy that permeate the organization, employee attitudes, leadership effectiveness, job structures, availability of the right tools and systems, work environment and more. It is literally the totality of everything that affects how well the organization performs.

    You can’t implement any strategy, change, improvement or anything at all unless you can get the employees, systems, processes and the rest to do their job in a way that supports that strategy. Strategy implementation means that an organization has the right structure to turn the strategy into an everyday reality. The structure is capable of making it happen. Delivering on the promise. Doing what the strategy says it’s supposed to do.

    If you don’t have an effective organization structure, you can’t implement anything. You can’t even get the water cooler or microwave in the employee rest area fixed let alone improve customer service or lower operating cost.

    Structure supports strategy. That’s right in the title of this article. What does support mean? It means implementation. It means the structure can carry out what the strategy wants it to do. Structures by definition are the ones that implement strategy. Structure IS implementation. This entire article is all about implementation. This article is about why having great strategies isn’t enough because you must have a structure that can implement the strategy effectively.

    In the section of my article “A Science Fiction and Real World Example”, I give three examples of what could cause a strategy to not be implemented effectively. Those examples are about strategy implementation. Then I followed with the section, “Strategy Is Structure” where I specifically say “That is the only way to implement lasting improvements.” I’m talking about implementation right there.

    And then title of the next section says “Implementing Change As Important As Strategy Itself” and there is the word right in the sub title. Finally, on March 3, 2013, Mado asked this question of me, “what is the contribution of the Organization structure to strategy implementation?” That’s essentially your question and I gave a long answer to that question.

    So, the truth is my article and replies clearly answered this question. You have to look more deeply as to why you couldn’t see the answer you were looking for in all that was already here. There is something in that reflection which will help you to learn something important which will greatly benefit you in the future.


  37. Abadi
    July 13, 2015 @ 4:35 am

    Organizational structure and job analysis and design. which should come first? why?


  38. Kelvin
    August 7, 2015 @ 10:35 am

    How does strategy implementation relates to strategy deployment


  39. Mohammed
    August 14, 2015 @ 5:03 am

    How vision relates to strategy or how do they complement each other?


  40. Furkan Yavuz
    December 12, 2015 @ 4:24 am

    Dear Mr. Shapiro,

    Read the article and all the posts. Excellent explanation. You have eased my work for my Managerial Economics assignment. Thank you very much.

    Kind Regards,
    Furkan Yavuz


  41. khawla
    August 7, 2016 @ 5:45 am

    Why is it so important to consider the effect of changes in structure on firms’ strategy?


    • Don Shapiro
      August 8, 2016 @ 2:47 pm

      Hi Khawla,

      Thanks for asking this question. Have you read the entire article and all my comments in this thread? I have answered this question thoroughly in many different ways.

      The short answer is that its the structure that implements the strategy. If the structure made up of all the people, functions, leadership, systems, policies, procedures, culture and more does not support the strategy, the strategy will fail. Strategy and structure must be in alignment to implement strategies that produce the desired results. When a new strategy is selected, the structure must be changed to support it.

      Please read everything I’ve written about this post as well as my other articles on strategic alignment and teamwork to better understand how this all works.



  42. Don Shapiro
    August 8, 2016 @ 2:51 pm

    If you want to better understand the connection between strategy and structure, please read all 4 of my articles that address “alignment.” Alignment is about how the structure aligns with the strategy and how you improve that alignment. Another term used to talk about this is execution. To execute a strategy, the organization must be aligned with that strategy. Full alignment has been shown in research of actual organizations to produce superior results.

    The problem with most organizations is not coming up with the best strategies. It’s how to implement those strategies so they actually produce the desired results.




  43. Structuring a Sales Team of Any Size
    August 9, 2016 @ 7:30 am

    […] structure does not simply imply the outside framework or hierarchy; structure is how the whole sales team fits together and works together to avail the best possible results for […]


    • Don Shapiro
      August 9, 2016 @ 9:36 am

      Excellent article about applying the concepts of alignment and structure to a sales force and how to build a sales team that supports your organization’s strategy. The sales team doesn’t simply need to be well structured internally in how it operates. The structure of that sales team must support the organizations strategy and go to market approach. You can have the best group of sales professional on earth but they won’t deliver the goods if they are not structured in a way that supports the markets you are going after, what you sell and how you are positioned relative to your competitors.


  44. Align Strategy, Structure and People for Breakthrough Results
    October 19, 2017 @ 9:34 pm

    […] led to one of Don’s best known discoveries on “Strategy follows structure, structure supports strategy.” You have to align your strategy, structure and people together so they are all on one page […]


  45. mihret
    November 1, 2017 @ 11:31 pm

    dear Don Shapiro,
    how structure would affect the implementation process of the marketing strategy?



    • Don Shapiro
      November 17, 2017 @ 3:08 pm

      Hi Mihret,

      What don’t you tell me your thoughts about how structure affects implementation of marketing strategy. Then I will share my perspective based on what you’ve written. I’m interested in what you may have learned from reading this article and the comments. Let’s see how sharp you are!


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  47. olaoluwa
    November 15, 2018 @ 3:44 am

    I love strategy!


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