Principles of Organizational Behavior, 3rd Edition

29Strategy and Structure for Effectiveness

JOHN JOSEPH¹ AND METIN SENGUL^2,*

¹ The Paul Merage School of Business, University of California

² Carroll School of Management, Boston College

A fundamental aspect of strategy work concerns how a firm's organization affects how strategic choices are implemented and hence how it should be designed. A long tradition of research has examined this question, focusing initially on the relationship between strategy and overall organizational structure. Starting with Alfred Chandler's (1962) eponymous book Strategy and Structure, early research focused on the efficiency of various structures (Child, 1972; Donaldson, 1976; Miles and Snow, 1978; Williamson, 1975). Building on this early research, following studies have examined a variety of antecedents and outcomes associated with alternative ways of organizing (Burton and Obel, 1984; Joseph and Gaba, 2020; Puranam, 2018). These advances in research have come together in the contemporary field of organization design: the study of design choices and how they influence the decisions, behavior, and performance of an organization, its constituent units, and members (Joseph and Sengul, 2022). Design choices reflect the formal and informal structures, systems, and processes of the organization and include a variety of design levers and mechanisms.

Organization design research is united in common observation that managers face two design problems: (i) how to best divide the organization into subunits ...