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Organization Design and Competitive Strategy: An Application to the Case of Divisionalization

Organization Design

ISBN: 978-1-78756-330-8, eISBN: 978-1-78756-329-2

Publication date: 10 December 2018


In this chapter, the author outlines the link between organization design and competitive strategy, focusing on rivalry. A firm’s organization design choices can affect its competitive advantage as well as the strategic decisions of its rivals. Therefore, organization design can influence the nature and intensity of competitive interactions between firms. To illustrate this effect, the author focuses on the literature on divisionalization and offers a set of propositions as examples. Taken together, the author makes three main observations: (1) a firm’s competitive position and objectives are reflected in its organizational choices; (2) heterogeneity in competitive position and objectives lead to heterogeneity in organization design choices across firms; and (3) organization design and competitive strategy are interdependent processes. The author concludes by discussing the implications for strategy and management research and pointing out some opportunities for future research.




This chapter draws heavily on my joint work and many discussions with Javier Gimeno over the years, starting in the early days of my academic life as a doctoral candidate. I am grateful to him, Onur Boyabatli, Bert Cannella, Charles Galunic, Mats Lingblad, Quy Huy, Tomasz Obloj, Peter Ring, Richard Woodman, Tieying Yu, the editor John Joseph, and two anonymous reviewers for helpful comments and suggestions on different versions of this study.


Sengul, M. (2018), "Organization Design and Competitive Strategy: An Application to the Case of Divisionalization", Organization Design (Advances in Strategic Management, Vol. 40), Emerald Publishing Limited, Bingley, pp. 207-228.



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