Strategy and Structure: Reconceiving the Relationship

Abstract

Discussions have drawn attention to the relationship between strategy and structure for much of the last quarter century. Yet, no firm basis has emerged to settle the issue of causal direction or to affirm the relationship's effects on organizational performance. By adding a new dimension to the strategy-structure model, this article attempts to conceptually link long-term performance with (a) the presence of subunits having distinctive competence in strategic planning and (b) the coordination of these differentiated subunits into a discernable microstructure embedded within the overall organization. This new dimension is explored and developed by use of a case of the Pacific Coast seaport industry.