The Value of Strategy - Structure Alignment: Comparison of Organizational Alignment and Misalignment

Not too long ago I bought my first 4x4 vehicle.innovation, modern equipment, dedication to
The original owner proudly spoke of thecustomers and concentration on productivity from
truck’s ability to handle the toughesta highly motivated workforce,” (2), finds its
terrain, the muddiest marshes, and the sandiestalignment in an organizational structure that is
beaches. I was sold! After all, TV commercialshighly decentralized. Nucor’s day-to-day
showed off road trucks handling any situation.decisions are made by three layers of
What I did not know, however, was that a oncemanagement, including the general manager,
smooth driving vehicle needs a heavy dutydepartment manager, and supervisor.
front-end alignment after just one off roadAn organization with a strategy-structure
adventure. Without it, there would be a strugglealignment or misalignment can be compared with
over which direction I wanted to drive, and wherethe parable of the wise and foolish builders. An
the truck wanted to drive.aligned organization is like building one’s
Organizations are very much the same. Anhouse on the rock. When competition becomes
organization’s strategy, which is thefierce and the external environment is rapidly
purpose, direction, or “big picture,” ischanging, a good strategy-structure alignment
like the driver. The structure, which emphasizesallows any organization to adjust when needed
how work is divided, and asks who is responsibleand stay focused. However, a misaligned
for what, who has authority, what is centralizedorganization makes delayed and sloppy decisions,
or decentralized, is like the truck itself. When ancannot adapt to change in the business
organization’s strategy and structure areenvironment quickly, and has employees who are
misaligned, the outcome could be like my strugglenot sure which direction the business is headed.
with the truck. But when an organization’sThe Bible says, “But everyone who hears
strategy and structure are aligned, the ride isthese sayings of mine, and does not do them, will
much smoother.be like the foolish man who built his house on the
For organizations to compete effectively today,sand. And the rain descended, the floods came,
companies must have a clear and conciseand the winds blew and beat on that house; and it
strategy. The successful firm will ask what itsfell,” (Matthew 7: 26-27).
future goals are and determine which direction it isWhen there is organizational misalignment, there is
headed in. Furthermore, a good strategy will bean overall feeling of chaos. For employees,
highly valued by employees and customers. Jesusstrategic direction is vague. “Clarity of
demonstrated an example of good strategy in Hisdirection is lacking, hidden behind a haze of
word. “For which of you, intending to build ageneralizations and grand strategy statements
tower, does not sit down first and count the costthat don’t provide meaningful
whether he has enough to finish it,”( Lukedirection,”(Clemmer 1). Alignment of
14: 28).organizational structure is also affected.
Following the strategy, an organization must“Employees, teams, departments, and
choose a structure that best fits the strategydivisions struggle, often at cross purposes to hit a
and will allow the organization to move forwardseemingly fleeting strategic target,”
successfully. The type of structure that best fits(Clemmer 1). Further, misalignment also brings a
an organization depends on the objective andweak knowledge of the target market, multiple,
strategy of that organization. Although manyunnecessary layers of employees and
firms still use a centralized, hierarchal structuremanagement, and too many decision makers and
with many rules and regulations, as long as thepaper trails,
firm’s strategy accommodates aIn organizations where there is strategy-structure
centralized kind of structure, no changes should bealignment, value is created for employees of the
made. For example, United Parcel Service, thefirm and its customers. Clemmer goes on to say,
largest package delivery company in the world,“Organization structure and individual values
employees 300,000 people worldwide and deliversalign and support the strategy, designed
13 million packages every business day. Theintentionally to allow for maximum effectiveness
success of UPS is attributed to its efficiency,and efficiency in creating a specific and enduring
which is rooted in a very centralized structure oftype of value for customers,” (1). For the
strict rules and regulations.employee there is a clear understanding of
However, other organizations have a decentralizedorganizational strategy with a structure that allows
structure to fit their strategy. Nucor Steel is athe employee to ultimately serve the needs of
good example. At a time when mammoth steelthe firm’s customers. Alignment also keeps
companies were too slow to respond tothe purpose of the organization simple and clear,
competition and overburdened with layers ofpromotes employee involvement of decision
management and rules, Nucor Steel found itsmaking and strategic direction, keeps the
success in a simple, streamlined structure thatstructure flat and to a minimum, and allows a
allowed employees to be creative and make quickbetter opportunity for communication.
decisions. Nucor’s strategy of,Works Cited
“Uncompromising quality,responsive service,Clemmer, Jim. Practical Leadership.
and competitive pricing through continuous