The first article chosen is by Hamilton & Shergill (1992) and describes a longitudinal study of corporations with a non-financial business set up that are listed on the New Zealand stock exchange. The premise of the article is that there exists a fit in regards to business strategy and also in organizational structure that is vital and determines performance. The article examines corporations in New Zealand, where major companies are less diversified and smaller in size. It further offers an empirical test of the generality of the ideology of strategy structure fit and corresponding performance. I chose the article because it offers information in regards to whether the strategy structure fit applies to corporations outside the USA.
The second article chosen is authored by Bradford (1990), and the author proposes two strategies applicable to international business. One of the strategy talks about a global strategy focusing on global efficiencies. The second one discussed in the article focuses on country or nation centered strategy that emphasizes on responsiveness to the particular local markets an organization operates under or the government in the jurisdiction that the organization operates. The article is applicable in understanding the strategy structure fit because the research conducted focused on multinational companies operating in the USA that was surveyed in order to understand their international strategies, performance, and structure. Their competitive positions in their respective industry segments were also analyzed. The results of the research indicate that fit existing between the organizational structure and the strategies employed do not have a significant correlation to perform.
The third article under discussion is authored by Xu, Cavusgil & White (2006), and in this article, the study introduces multiple perspectives in regards to strategic fit in examining the effect and impact of internal fit among structure, strategy, together with the processes employed by multinational firms. It further explores the effects on the firm's performance. The study conducted in the article attempted to employ different perspectives in generating understanding of the intricacies of how globally standardization strategy, organizational structure, and management processes tend to interact and influence the performance of such multinationals. The article is chosen because the results generated by the article indicated that relationship existing between the standardization of global marketing and the performance is entirely mediated by the structure and corresponding processes. The article further proposes that organizations must seek to achieve an internal fit.
The strategy employed by a firm defines its plan of action in its business processes and how it intends to utilize the available resources. The structure of the organization, on the other hand, refers to how the different pieces of the company fit together in the internal setup. Furthermore, the linkage between the company and external organizations is covered by such a strategy and structure. The structure of the corporation can be based upon the function of the firm or department, the product it generates and the different processes involved in the organization. Bradford (1990) asserts that the organizational structure must always be designed in a manner that meets the aims or objectives of the organization. The structure must allow for flexible decision making that further enables sharing of novel ideas and practices within the different management levels.
Xu et.al (2006) asserts that global structure and processes that a multinational employs must be established with a view of accruing the benefits emanating from the implementation of the standardized global strategy. This is a very important requirement for corporations seeking to be internally fit. Furthermore, according to Xu et.al (2006), whenever the top management of the organization comes up with a particular strategy that is meant to be a blueprint for action, it is vital to ensure adequate infrastructure is available to enable the implementation of the strategy. It is of most importance to have a follow-through on every strategy that is set up in order to ensure the successful performance of the organization. The study conducted by Xu et.al (2006) concluded that internally consistent model in regards to strategic decision is most likely to bring about superior performance on the part of the organization.
The top management needs to understand the co-alignment existing between the three main dimensions in the corporation; structure, strategy, and processes (Xu et.al, 2006). Hamilton & Shergill (1992) deduced that strategy and the organization structure in regards to the financial performance of the firm. The article further came to the conclusion that there is causal relationship existing between organization fit and its corresponding growth measures. Furthermore, Hamilton & Shergill (1992) state that there is significant cost in regards to the dismal financial performance of the organization that is associated with the particular failure to settle into a robust structure of strategy for the corporation. However, it is a complex task to change the formal structure of the organization and is likely to require increased time dedication by the top management of the organization.
Bradford (1990), on the other hand, asserts that multinationals must allow for a country centered type of strategy. This requires the local a management team being allowed to come up with a strategy and structure that fits the local needs and resources. This form of strategy is more likely to guarantee success for the corporation in regards to the performance of the local subsidiaries. A decentralized form of decision-making is vital for multinational as compared to having a form of integrated operations.
Coca-Cola is an example of a corporation that has robust strategy and structure alignment. The main strategies employed by Coca-cola include growth of the systems profitability together with the different bottlers globally, investing prudently to desired market growth and employing technology in increasing efficiency and improving cost effectiveness. The company has also sought to broaden the products available in each country it operates. This can only be achieved if the multinational allows top management of each bottler to drive the strategy that fits the organization.
References
Bradford, B.R. (1990). Strategy, Structure, and Fit: Determinants of Performance for International Businesses. Journal of International Business Studies, 21(4), 706.
Hamilton, R. T., & Shergill, G. S. (1992). The Relationship Between Strategy-Structure Fit And Financal Performance In New Zealand: Evidence Of Generality And Validity With Enhanced Controls. Journal Of Management Studies, 29(1), 95-113.
Xu, S., Cavusgil, T., & White, J. C. (2006). The Impact of Strategic Fit among Strategy, Structure, and Proceses on Multinational Corporation Performance: A Multimethod Assessment. Journal of International Marketing, 14(2), 1-31.
