Strategic renewal: how an organization realigned structure with strategy

Abstract

Purpose

This disguised case of a unit of a Fortune 500 firm aims to consider two core questions when considering the decision of whether it's time to renew a corporate strategy. They are: Does the strategy truly fit the current business environment? and Is a change in the organizational structure required to fit the intended strategy?

Design/methodology/approach

The paper uses “Wyler Company,” a business that was lulled into complacency by prospects of seemingly steady growth, to examine whether the firm's current structure is aligned with leadership's intended strategy.

Findings

A self‐directed study process revealed that the intended strategy had been gradually subverted as the organization grew in complexity and specialization. Management quickly developed a consensus that favored a dramatic change in the organization's structure.

Research limitations/implications

The author was a consultant to an oil exploration and production unit of a Fortune 500 company during a period when many of the critical decisions studied by this disguised case were made.

Practical implications

Management needs to continually monitor the gap between implemented and intended strategy, which often increases as the organization evolves a specialized structure to primarily pursue near‐term gains.

Originality/value

Top management's need to analyze whether the operating structure is aligned with its intended strategy for a dynamic business environment is not an unusual problem. When competition increases, many firms change their structure to concentrate on a few profitable activities. This response, though, can inadvertently subvert their intended strategy.

Citation

Zand, D.E. (2009), "Strategic renewal: how an organization realigned structure with strategy", Strategy & Leadership, Vol. 37 No. 3, pp. 23-28. https://doi.org/10.1108/10878570910954619